Rotomag Enertec Limited IPO

01At a glance

What the company does: designs and makes industrial drive solutions (DC, brushless DC, AC and permanent-magnet motors, gearboxes, drivetrains and railway products) and solar products (solar pumps, pumping systems, inverters and energy storage), from six manufacturing facilities focused on design, assembly and testing (DRHP p.27). Solar products were 82.40% of FY25 revenue (DRHP p.31).

Who pays it: mainly state nodal agencies in Maharashtra, Rajasthan, Haryana, Uttar Pradesh, Assam and Chhattisgarh that procure solar pumping systems under government contracts, plus equipment makers in India and abroad (DRHP p.43). Government solar-pump contracts were 75.18% of FY25 revenue, and the top ten customers 58.62% (DRHP p.31, DRHP p.43).

Why it is raising money: ₹2,750.00 million for working capital, ₹1,000.00 million to redeem non-convertible debentures, and the rest for general purposes (DRHP p.28).

How fast it has grown: revenue of ₹7,042 million in FY23, ₹6,942 million in FY24 and ₹12,650 million in FY25 (DRHP p.30).

The one thing to understand: profits that have not yet turned into cash. FY25 profit was ₹1,675.19 million but operating cash flow was negative ₹240.23 million, as trade receivables more than doubled to ₹6,776.23 million, or 196 days of revenue (DRHP p.48, DRHP p.56).

02The business, in plain words

A solar-pump maker assembles pumps, motors, controllers and panels into pumping systems, wins state tenders under government schemes, supplies the systems and is paid by the state agency; it also makes electric motors and gearboxes for industrial customers.

A state nodal agency tenders solar pumps for farmers under a central scheme → Rotomag wins a share of the tender → it supplies the pumping systems under the contract → the agency pays on the contract's terms.

Earnings equation: Profit ≈ pumping systems supplied × (tender price − panels, motors and other cost) + motor sales margin − interest. Material margin was 37.00% and EBITDA margin 19.29% in FY25 (DRHP p.136).

03Where the money comes from

Source: DRHP p.43, DRHP p.136.

04The growth record

Source: DRHP p.30, DRHP p.56, DRHP p.136.

05What the growth is made of

Government solar-pump orders in FY25. Revenue was flat in FY24 and rose 82.23% in FY25, and material margin rose from 25.70% to 37.00% over two years (DRHP p.136). Revenue from outside India halved over the same period (DRHP p.136).

06Earnings quality

Operating cash flow over FY23 to FY25 was ₹244.73 million against profit of ₹2,943.44 million (our arithmetic, DRHP p.30, DRHP p.56). Receivable days rose from 128 in FY23 to 196 in FY25, and the company says its provision for doubtful debts rose in the past because of collection delays (DRHP p.48). Net working capital was 194 days in FY25 (DRHP p.136). A subsidiary, Su-Vastika Systems, lost ₹47.76 million before tax in FY25 (DRHP p.56). Other income was ₹129.19 million in FY25 against profit before tax of ₹2,303.22 million, or 5.6% of it (our arithmetic, DRHP p.90).

07The balance sheet

Source: DRHP p.30, DRHP p.48.

Return on capital employed was 28.20% in FY25, and net debt was 0.34 times EBITDA (DRHP p.136). Contingent liabilities at March 2025 were ₹784.71 million: contested income-tax demands of ₹548.37 million, contested indirect-tax demands of ₹9.94 million and bank guarantees of ₹226.40 million (our arithmetic, DRHP p.32).

08What the money is for

Source: DRHP p.28.

09Who is selling

Source: DRHP p.27, DRHP p.29. The last row, covering Anjali Umesh Balani, Pooja Tushar Patel and Siddharth Tushar Patel, is our arithmetic. BanyanTree's holding assumes its 3,200 compulsorily convertible debentures convert into up to 17,754,881 shares before the RHP (DRHP p.28, DRHP p.29).

The fresh issue is of up to ₹5,000.00 million and the offer for sale of up to 24,040,162 shares, of which Anjali Umesh Balani (promoter group) offers up to 801,650 shares, Pooja Tushar Patel up to 689,409 and Siddharth Tushar Patel up to 792,835 (DRHP p.27).

10Promoters

The promoters are Umesh Mohan Balani, Neelam Umesh Balani, Priya Mohan Balani, Umesh Balani Family Private Trust and Neelam Balani Family Private Trust (DRHP p.27). No proceedings are listed against the promoters (DRHP p.31). Director's remuneration paid to Umesh Mohan Balani and Neelam Umesh Balani together was ₹16.81 million in FY23 and ₹17.00 million in FY25 (our arithmetic, DRHP p.33).

11Who already owns it

Source: DRHP p.29. The company had ten shareholders at the DRHP date (DRHP p.29).

12What changed just before the IPO

• Bonus issue: 9 shares for every 4 held, in August 2025 (DRHP p.30).
• Receivables: more than doubled in FY25 (DRHP p.48).
• Borrowings: doubled in FY25 (DRHP p.30).
• Share split: the face value was split from ₹10 to ₹1 a share in December 2024 (DRHP p.105).
• Auditor: Mukund M. Chitale & Co. resigned as statutory auditor in November 2024 at the management's request, and K C Mehta & Co LLP was appointed in December 2024 (DRHP p.97).
• Public company: the company converted from a private to a public limited company, with a certificate dated April 29, 2025 (DRHP p.296).

13Capacity and expansion

Six manufacturing facilities, most of them in Gujarat (DRHP p.27, DRHP p.31). The proceeds fund working capital rather than new capacity (DRHP p.28).

14Market size and industry structure

The F&S report cited in the offer document values India's solar-pump market at ₹53,000 million in FY2025 and projects ₹140,000 million by FY2030, and the industrial electric-motor market at ₹95,000 million rising to ₹127,000 million (DRHP p.27). Those projections are F&S's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• Design focus across motors and solar products (DRHP p.27).
• Rising margins: material margin up from 25.70% to 37.00% (DRHP p.136).

Against that: dependence on solar products and government tenders, plants concentrated in Gujarat, and slow collections (DRHP p.31, DRHP p.48).

16Peers the company named

Source: DRHP p.135. The table also lists WPIL, CG Power & Industrial Solutions, Sona BLW Precision Forgings and Elecon Engineering; the peers' P/E ranges from 25.27 to 123.24, average 49.00 (DRHP p.134, DRHP p.135).

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

17Risks, in plain words

• Solar products. 82% of FY25 revenue (DRHP p.31).
• Government tenders. 75% of revenue from solar-pump contracts (DRHP p.31).
• Collections. Receivables at 196 days (DRHP p.48).
• Gujarat. Most plants in one state (DRHP p.31).
• Customers. Ten customers were 59% of revenue (DRHP p.42).

18Litigation and regulatory matters

Source: DRHP p.31, DRHP p.431. For assessment year 2021-22 the tax officer treated ₹986.79 million as unexplained income, being the difference between turnover in GST and Form 26AS records and turnover in the profit and loss account, and raised a demand of ₹369.23 million (DRHP p.431).

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:

• Which state agencies owe the ₹6,776 million of receivables, in the pages read.
• How the ₹986.79 million turnover difference arose, beyond the tax officer's finding, in the pages read.
• How much of FY25 revenue came from a single scheme, in the pages read.
• Why export revenue halved, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. When will the FY25 receivables be collected, and which agencies are slowest?
2. What explains the ₹986.79 million turnover difference in the tax assessment?
3. How much of the order book depends on the current government scheme?
4. Why was FY24 revenue flat and FY25 revenue up 82%?
5. What return does BanyanTree get on its debentures at conversion?

1Sources and cited facts

This study was read from 1 document the company filed. The 62 figures it cites are listed under the document each came from, with the page and the sentence as printed.