Associated Power Structures Limited IPO

01At a glance

What the company does: designs and makes lattice structures for power transmission and distribution, wind energy and telecom, and solar module mounting structures; it also executes turnkey projects to supply, erect and commission transmission towers, lines and substation structures, including specialised pile and well foundations (DRHP p.21). Its manufacturing facilities are concentrated in Gujarat (DRHP p.25).

Who pays it: power-sector and renewable-energy customers; the top ten customers, including Suzlon Energy, Gujarat Industries Power Company and LS Cable & System, were 95.97% of FY25 revenue, and the largest one 34.04% (DRHP p.37). Government bodies were 48.41% of FY25 revenue (DRHP p.25).

Why it is raising money: ₹3,200.00 million to repay borrowings, and the rest for general purposes (DRHP p.22).

How fast it has grown: revenue from ₹4,168 million in FY23 to ₹6,198 million in FY24 and ₹12,169 million in FY25 (DRHP p.117).

The one thing to understand: a thin-margin contractor that has scaled up fast on a few large customers. EBITDA margin was 9.69% in FY25, the order book rose from ₹4,970 million in FY23 to ₹36,680 million, and operating cash flow was negative ₹35.67 million as working capital absorbed the profit (DRHP p.117, DRHP p.327).

02The business, in plain words

A tower maker fabricates lattice towers in its factories and, for turnkey jobs, also builds the foundations and supplies, erects and commissions the towers and lines.

A power utility tenders a new transmission line → Associated Power Structures wins the EPC contract → it makes the towers in Gujarat, builds foundations and erects the towers and line on site → the utility pays as the work is completed.

Earnings equation: Profit ≈ tonnes of towers and project work billed × (price − material and site cost) − interest. Finance costs were ₹326.20 million in FY25 against EBITDA of ₹1,179.69 million (DRHP p.117, DRHP p.327).

03Where the money comes from

Source: DRHP p.24, DRHP p.25, DRHP p.37.

04The growth record

Source: DRHP p.117, DRHP p.327, DRHP p.328.

Our arithmetic: revenue compounded about 70.9% a year from FY23 to FY25 and profit after tax about 246.5% (DRHP p.117).

05What the growth is made of

New orders. New orders were ₹4,074 million in FY23, ₹19,441 million in FY24 and ₹30,635 million in FY25, and the order book reached ₹36,680 million at March 2025 and ₹37,901 million at July 2025 (DRHP p.38, DRHP p.105). Renewable energy rose to 28.98% of the order book from none in FY23 (DRHP p.38).

06Earnings quality

Operating cash flow over FY23 to FY25 was ₹397.55 million against profit of ₹830.32 million (our arithmetic, DRHP p.117, DRHP p.327, DRHP p.328). Net working capital days fell from 221 in FY23 to 114 in FY25 (DRHP p.117). Interest cover rose from 1.26 times to 3.66 times (DRHP p.117).

07The balance sheet

Source: DRHP p.23, DRHP p.117.

Our arithmetic: net debt of ₹1,345.25 million at March 2025 was 1.1 times the FY25 EBITDA of ₹1,179.69 million (DRHP p.23, DRHP p.117).

08What the money is for

Source: DRHP p.22.

09Who is selling

Source: DRHP p.22, DRHP p.71. The shares offered are 14.29% of the company's equity (our arithmetic).

10Promoters

The promoters are Ajay Mukund Patel, Parag Kothari and Satish Desai, who hold 93.00% between them (DRHP p.21). No proceedings are listed against the promoters (DRHP p.24).

11Who already owns it

Source: DRHP p.22.

12What changed just before the IPO

• Share split and bonus: ₹10 shares split into ₹2 shares and a 3-for-1 bonus in August 2025 (DRHP p.23).

• Order book: doubled in FY25 (DRHP p.117).

• Cash: operating cash flow turned negative in FY25 (DRHP p.327).

• Public company: converted from a private limited company in December 2024 (DRHP p.3).

• Share split: 2,500,000 shares of ₹10 each were sub-divided into 12,500,000 shares of ₹2 each on 28 August 2025 (DRHP p.88).

• Bonus issue: three shares for each share held, 37,500,000 shares in all, on 4 September 2025 (DRHP p.89).

• Promoter remuneration: ₹51.50 million in each of FY23, FY24 and FY25 across the three promoters (our arithmetic, DRHP p.26).

• Auditors: CNK & Associates LLP left on the expiry of its term in September 2023 and Shah Mehta & Bakshi was appointed for five years (DRHP p.78).

13Capacity and expansion

Capacity is tower-fabrication plants in Gujarat and project teams (DRHP p.25). The proceeds repay debt; no capacity expansion is funded (DRHP p.22). Installed capacity figures were not read for this study.

14Market size and industry structure

The CRISIL report cited in the offer document projects India's peak power demand to rise from 250 GW in FY2025 to 335 GW in FY2030, the transmission tower and line supply-and-installation market from ₹57 to 61 billion to ₹98 to 102 billion, and the wind tower market from ₹9 to 10 billion to ₹18 to 20 billion (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:

• Specialised foundations: one of few companies able to do pile and well foundations, citing CRISIL (DRHP p.21).
• Voltage range: transmission projects up to 800 kV and substations up to 400 kV (DRHP p.21).

Against that: dependence on ten customers, on competitive bids, on government contracts, and on plants in one state (DRHP p.24, DRHP p.25).

16Peers the company named

Source: DRHP p.116, DRHP p.119. The table also lists Bajel Projects (P/E 160.46) and Vikran Engineering (P/E 24.26); the peers' average P/E is 54.94 (DRHP p.115, DRHP p.116).

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

17Risks, in plain words

• Two verticals. Power lines and renewables are 99% of revenue (DRHP p.24).
• Customers. Ten customers were 96% of FY25 revenue (DRHP p.24).
• Factories. A shutdown would halt output (DRHP p.24).
• Bidding. 63% of FY25 revenue from competitive bids (DRHP p.25).
• Order book. May not turn into revenue (DRHP p.25).

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:

• Who the largest customer is, beyond naming three of the top ten (DRHP p.37).
• What the 16 tax cases concern, in the pages read.
• Why operating cash flow turned negative despite lower working capital days, in the pages read.
• What the criminal case against the company alleges, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. Who is the largest customer, and how much of the order book does it hold?
2. How much of the renewable order book depends on one wind-turbine maker?
3. What are the 16 tax proceedings worth ₹209 million?
4. How much debt remains after the ₹3,200 million repayment?
5. How are raw-material price changes passed on in fixed-price contracts?

1Sources and cited facts

This study was read from 1 document the company filed. The 51 figures it cites are listed under the document each came from, with the page and the sentence as printed.