When investors come across IPOs in the power or infrastructure space, the first reaction is often mixed. On one side, there is familiarity — electricity, generators, renewable energy. On the other, there is confusion — multiple business segments, technical terms, and financial complexity.

Many investors assume that power-related businesses are straightforward because demand seems constant. However, in reality, such companies often operate across multiple revenue streams, each with its own risks and dynamics.

The Powerica IPO is one such example.

What Does Powerica Do?

Powerica operates across multiple stages of power solutions value chain with over 40 years of operating history.

The company operates across two main segments:

• Generator Set Business (core segment)
• Wind Power Business (growth segment)

This dual structure creates a mix of:

• Stable, demand-driven revenue
• Asset-based renewable energy income

Generator Set Business: The Core Revenue Driver

Powerica’s generator business has been active since 1984 and contributes 80–87% of total revenue.

Key Characteristics

• Authorized OEM partner for Cummins India
• Collaboration with HD Hyundai Heavy Industries
• Product range from 7.5 kVA to 10,000 kVA

These generators serve:

• Industrial facilities
• Commercial establishments
• Backup power needs
• Continuous power applications

The long-standing relationship with Cummins is a significant part of the business model.

However, this also creates a supplier concentration dynamic, where:

• Around 57–71% of revenue depends on Cummins-powered products

In practical terms, strong partnerships may provide stability, but dependence on a single supplier introduces exposure to pricing, supply disruptions, or contractual changes

Wind Power Business: The Growth Segment

The company entered the wind energy space in 2008 and operates through multiple roles:

• Independent Power Producer (IPP)
• EPC contractor
• O&M service provider

Revenue Streams

• Power generation income
• Project execution fees
• Maintenance contracts

This creates diversified income within the renewable segment.

Powerica IPO Details

• IPO Opening Date: 24 March
• IPO Closing Date: 27 March
• Allotment Date: 30 March
• Listing Date: 2 April
• Price Band: ₹375 – ₹394
• Lot Size: 37 shares
• Total Issue Size: ₹1,100 crore

Break-up:

• Fresh Issue: ₹700 crore
• Offer for Sale (OFS): ₹400 crore

Financial Snapshot: Stability with Variations

Reported Financials

The company shows:

• Stable revenue trajectory
• Variability in profit trends

H1 FY26 profit appears relatively high compared to FY25 full-year profit, which may indicate:

• Seasonal trends
• Margin variations

Cash flows, however, remain relatively stable.

Balance Sheet Trends: What Stands Out

Declining PPE (Property, Plant & Equipment)

₹1,076.60 Cr (FY23) → ₹800.64 Cr (Sep 2025)

This may indicate:

• Asset depreciation
• Disposal of assets

Rising CWIP (Capital Work-in-Progress)

₹23.45 Cr → ₹429.30 Cr

This suggests ongoing capital expenditure where assets are under development.

Increase in Inventory

₹206.85 Cr → ₹315.11 Cr

This could indicate:

• Preparation for demand cycles
• Expansion-related stocking

Receivables Movement

Trade receivables remain elevated, which may reflect:

• Delayed collections
• Working capital intensity

Key Risks Investors Should Understand

Supplier Concentration Risk

Heavy reliance on Cummins creates:

• Dependency on a single OEM
• Exposure to supply and pricing changes

Legal Overhang

A civil suit filed in February 2026 challenges:

• Past family arrangements
• Shareholding structure

This may impact:

• Capital structure decisions
• Post-listing flexibility

Operational Risks in Wind Energy

O&M costs form 18–23% of wind revenue.

Land and Lease Risks

Some land leases are shorter than the duration of PPAs, which may create long-term uncertainty.

What Investors Usually Assume vs What Actually Happens

How inXits Helps Bring Clarity to Complex IPOs

IPO evaluation becomes challenging when multiple business segments are involved.

inXits supports investors by:

• Simplifying business structures
• Interpreting financial trends
• Aligning investments with portfolio strategy

Connect with inXits for a 24×7 consultation focused on financial planning and portfolio review processes.

Conclusion

The Powerica IPO reflects a combination of:

• A long-standing generator business
• A renewable energy segment

While the company benefits from:

• Established OEM relationships
• Multiple revenue streams

It also operates within a structure involving:

• Supplier concentration
• Legal uncertainties
• Operational risks

Understanding these factors helps investors build a clearer perspective beyond initial assumptions.

📘 Disclaimer

Investment in securities market are subject to market risks. Read all related documents carefully before investing.
Registration granted by SEBI, membership of BSE and certification from NISM do not guarantee performance or returns.
The securities quoted are for illustration only and are not recommendatory.

Written by Megha Joshi

Megha Joshi is a Research Analyst at inXits with 2.5 years of focused experience in equity markets. She conducts in-depth stock research and market analysis to support data-backed investment decision-making for clients.

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