Allied Engineering Works Limited IPO

01At a glance

What the company does — manufactures and supplies smart meters — consumer smart meters and distribution-transformer, feeder and boundary smart meters — and automation and IoT solutions, and plans smart gas and water meters (DRHP p.21). It had supplied 2.92 million smart energy meters across six states, including Haryana, Punjab and Uttar Pradesh, by March 2025 (DRHP p.21).

Who pays it — electricity utilities and advanced metering infrastructure service providers (AMISPs); the top ten customers, including Punjab State Power Corporation, three GMR smart-meter companies, Dakshin Gujarat Smart Metering, Intellismart Infrastructure, Paschimanchal Infrastructure and Madhyanchal One Infrastructure, were 93.49% of FY25 revenue (DRHP p.36). The largest was 23.91% (DRHP p.36).

Why it is raising money — ₹1,167.47 million for a plant at Kundli to make smart gas meters, smart water meters and IoT solutions, ₹997.14 million for a smart electricity meter plant at Rai, ₹1,200.00 million for working capital, and the rest for general purposes (DRHP p.22).

How fast it has grown — revenue from ₹1,630 million in FY23 to ₹3,485 million in FY24 and ₹7,171 million in FY25 (DRHP p.24).

The one thing to understand — a company transformed by one government programme, whose profits are held in receivables. Smart meters went from 25.00% of revenue in FY23 to 93.17% in FY25, but operating cash flow totalled ₹230.11 million over three years against profit of ₹1,886.89 million, as receivables rose by ₹1,349.68 million in FY25 alone (our arithmetic, DRHP p.24, DRHP p.25, DRHP p.82).

02The business, in plain words

A smart-meter maker designs meters that record electricity use and communicate readings remotely, assembles them, and supplies them in large lots to utilities or to the service providers that install and run metering systems for utilities.

A state distribution company engages a metering service provider to replace consumer meters → the provider orders single-phase smart meters from Allied → Allied makes and delivers them → the provider pays on agreed terms.

Its metering order book was ₹18,535.98 million at March 2025 (DRHP p.132).

Earnings equation: Profit ≈ meters sold × (price − components and assembly) − warranty, overheads and interest. Gross margin was 44.78% and EBITDA margin 28.87% in FY25 (DRHP p.132).

03Where the money comes from

Source: DRHP p.25, DRHP p.36, DRHP p.132.

04The growth record

Source: DRHP p.24, DRHP p.82, DRHP p.132.

05What the growth is made of

Smart-meter volume. Meters sold rose from 0.12 million to 2.04 million in two years, with single-phase smart meters at 66.06% of FY25 revenue and distribution-transformer meters at 17.70% (DRHP p.37, DRHP p.132). Gross margin rose from 31.33% to 44.78% (DRHP p.132).

06Earnings quality

Weak cash conversion. In FY25, receivables rose ₹1,349.68 million, inventories ₹436.77 million and other financial assets ₹485.04 million, while payables rose ₹440.51 million (DRHP p.82). Warranty provisions charged were ₹227.79 million in FY25 (DRHP p.82). Income tax paid was ₹332.29 million (DRHP p.82).

07The balance sheet

Source: DRHP p.24.

08What the money is for

Source: DRHP p.22.

09Who is selling

Source: DRHP p.21, DRHP p.22. The shares offered are 6.82% of the company (our arithmetic). The weighted average cost of shares acquired in the last three years was ₹0.00, in a range of nil to ₹5.00 (DRHP p.28).

10Promoters

The promoters are Ashutosh Goel, Nidhi Goel, AEW Infratech Private Limited and RP Goel Family Trust, who hold 93.18% (DRHP p.22). One criminal proceeding is pending against the directors; the summary notes that the proceedings listed include ones against the chairman and managing director, who is also a promoter (DRHP p.24, DRHP p.25).

11Who already owns it

Source: DRHP p.22, DRHP p.23. The company has ten shareholders (DRHP p.23).

12What changed just before the IPO

• Smart meters — from a quarter of revenue to 93% in two years (DRHP p.25).
• Order book — from ₹1,038 million to ₹18,536 million after FY23 (DRHP p.132).
• Share capital — up from ₹55.00 million to ₹550.00 million in FY25 (DRHP p.24).

13Capacity and expansion

The proceeds fund two new plants: one at Kundli for smart gas and water meters and IoT products, and one at Rai for smart electricity meters (DRHP p.22). Capital spending was ₹129.04 million in FY25 (DRHP p.82).

14Market size and industry structure

The Crisil report cited in the offer document values India's smart energy meter market at ₹75 billion in FY2025 and projects ₹295 billion to ₹300 billion by FY2030 (DRHP p.21). Those projections are Crisil's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• Supply record — 2.92 million smart meters supplied (DRHP p.21).
• Order book — ₹18,536 million, about 2.6 years of FY25 revenue (our arithmetic, DRHP p.132).
• Customers — state utilities and large metering service providers (DRHP p.36).

Against that: dependence on one product and one government programme, customer concentration, few suppliers and slow collections (DRHP p.25, DRHP p.82).

16Peers the company named

Source: DRHP p.131. The peers' average P/E is 36.10 (DRHP p.130).

No P/E is possible for the company until a price band is set.

17Risks, in plain words

• One programme. Smart meters were 93% of FY25 revenue (DRHP p.25).
• Customers. Ten customers were 93% of revenue (DRHP p.25).
• Cash. Receivables absorbed most of FY25 profit (DRHP p.82).
• Suppliers. Ten suppliers provided 62.72% of FY25 raw materials (DRHP p.25).
• Warranty. Warranty provisions of ₹227.79 million were charged in FY25 (DRHP p.82).

18Litigation and regulatory matters

Source: DRHP p.24.

19Related-party transactions

Not read in detail for this study.

20What the offer document does not say

In the sections read for this study, the document does not give:

• When the FY25 receivables will be collected, in the pages read.
• What capacity the Rai and Kundli plants will add, in the pages read.
• What the criminal proceeding against a director concerns, in the pages read.
• Who owns AEW Infratech Private Limited, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. How much of the ₹18,536 million order book will be delivered in FY26?
2. How quickly do metering service providers pay, and what is overdue?
3. What happens to revenue when the smart-meter rollout ends?
4. What revenue do smart gas and water meters bring today, ahead of a ₹1,167 million plant for them?
5. What is the criminal case against a director about?

1Sources and cited facts

This study was read from 1 document the company filed. The 29 figures it cites are listed under the document each came from, with the page and the sentence as printed.