Swastika Infra Limited IPO

01At a glance

What the company does — builds power distribution and evacuation infrastructure on a turnkey (EPC) basis for government power utilities, leasing the heavy equipment it needs rather than owning it (RHP p.34, RHP p.126).

Who pays it — government utilities provided 96.87% of FY26 revenue, and all of the order book at July 31, 2026 (RHP p.32).

Why it is raising money — ₹9,000 lakh of the net proceeds for working capital in FY27, on top of ₹3,809.08 lakh already raised and spent on working capital in a pre-IPO placement, plus general corporate purposes (RHP p.115).

How fast it has grown — revenue grew at a compound rate of 55.01% a year from FY24 to FY26 and profit at 72.13%, the prospectus says (RHP p.126).

The one thing to understand — the growth has been paid for with borrowed money and credit from suppliers: operating cash flow was negative in FY24, FY25 and FY26, and receivables and other financial assets reached ₹31,690.29 lakh against FY26 revenue of ₹50,357.32 lakh (our arithmetic, RHP p.81, RHP p.78).

02The business, in plain words

State distribution companies tender works such as feeder segregation, smart-grid upgrades and solar-park evacuation lines; Swastika bids, procures the equipment and materials, and builds the works (RHP p.34). It keeps fixed assets low by leasing project equipment from third parties (RHP p.126).

A state power utility tenders a distribution upgrade → Swastika bids and wins → it procures materials and builds the works over the contract term → the utility pays against milestones, holding back part until completion.

Earnings equation: Profit ≈ contract value executed × margin − interest. EBITDA margin was 14.07% and net margin 8.23% in FY26 (RHP p.130).

03Where the money comes from

Source: RHP p.32, RHP p.130. At July 31, 2026 the order book was 18 ongoing projects across six states, with an aggregate order value of ₹2,03,665 lakh, of which ₹91,655 lakh was still to be executed (RHP p.33). The largest ongoing order, a feeder-segregation contract for the Ajmer distribution company in Rajasthan, is ₹22,533.55 lakh (RHP p.34). Revenue depends on a handful of state utilities.

04The growth record

Source: RHP p.80, RHP p.81, RHP p.130. Return on net worth was 32.84%, 43.36% and 35.44% (RHP p.130). Our arithmetic: EBITDA grew about 72.9% a year from FY24 to FY26 and the EBITDA margin rose 276 basis points (RHP p.130).

05What the growth is made of

More and larger contracts. The order book at year end rose from ₹39,139.13 lakh to ₹68,743.52 lakh, and the ratio of order book to revenue fell from 2.08 to 1.41 as execution caught up (RHP p.130). Most of the cost is procurement of goods and services for the contracts: ₹37,945.59 lakh in FY26 (RHP p.80). The prospectus does not give volumes such as kilometres of line built.

06Earnings quality

Profit has not turned into cash. The largest drain in FY25 and FY26 was the rise in other financial assets, ₹7,921.81 lakh and ₹7,809.06 lakh (RHP p.81). The prospectus does not break these assets down in the pages read.

07The balance sheet

At March 2026 short-term borrowings were ₹11,209.25 lakh and long-term ₹254.76 lakh, against equity of ₹15,677.82 lakh (RHP p.78, RHP p.79). Short-term borrowings had risen from ₹4,345.02 lakh at March 2024 (RHP p.79). Cash was ₹166.77 lakh; bank balances other than cash were ₹2,954.85 lakh (RHP p.78). Equity rose in FY26 partly from the pre-IPO placement (RHP p.82).

After the issue: equity would rise to about ₹28,577.82 lakh before expenses (our arithmetic, RHP p.78, RHP p.114).

08What the money is for

Source: RHP p.115. In the pre-IPO placement the company issued 24,24,242 shares at ₹165 each to 78 investors, raising ₹4,000.00 lakh, and cut the fresh issue by that amount (RHP p.114).

Into the business up to ₹12,900.00 lakh (fresh issue) (RHP p.114). To selling shareholders 17,50,000 shares, ₹3,237.50 lakh at the upper band (our arithmetic, RHP p.1).

09Who is selling

Source: RHP p.1.

10Promoters

The promoters are Babulal Gupta, Vinay Gupta, Ruchira Gupta, Biren Parnami, Manoj Modi and Vatsalya Gupta (RHP p.1). The company was formerly Swastika Electricals & Fertilizers (RHP p.353). Four of the promoters are selling in the offer, at average costs between ₹4.30 and ₹14.80 a share (RHP p.1).

11Who already owns it

Source: RHP p.108. The pre-IPO placement at ₹165 added 78 shareholders (RHP p.114). After the offer at ₹185, the promoters would hold about 57.4% (our arithmetic, RHP p.108, RHP p.1).

12What changed just before the IPO

• A pre-IPO placement of 24,24,242 shares at ₹165 raised ₹4,000.00 lakh (RHP p.114).
• Short-term borrowings rose to ₹11,209.25 lakh (RHP p.79).
• Revenue grew 43.6% in FY26 and 67.4% in FY25 (our arithmetic, RHP p.80).

13Capacity and expansion

A contractor's capacity is its bidding and execution capacity; the company leases project equipment rather than owning it, and its fixed assets were ₹712.10 lakh at March 2026 (RHP p.126, RHP p.78). The issue funds working capital, not plant (RHP p.115).

14Market size and industry structure

As claimed — the industry overview describes the government's Revamped Distribution Sector Scheme, including sanctioned outlays by region for loss-reduction and smart-metering works (RHP p.176).

The part that is addressable — distribution and evacuation works tendered by state utilities, particularly under that scheme.

What the company is today — FY26 revenue of ₹50,357.32 lakh (RHP p.80).

15Competitive position

Work is won by tender from state utilities, and the prospectus lists as strengths its financial record, its asset-light model and its promoters' experience (RHP p.126). Its fixed-asset turnover was 70.72 times in FY26 (RHP p.126).

16Peers the company named

Peers named in the offer document: Rajesh Power Services and Vikran Engineering (RHP p.128).

Source: RHP p.128; P/E at closing prices of August 26, 2026. The peer average is 12.35 (RHP p.127).

17Valuation at the issue price

At the upper band of ₹185, ₹12,900 lakh is about 69,72,972 new shares, taking the total from 2,71,74,242 to about 3,41,47,214 (our arithmetic, RHP p.76, RHP p.114):

Source: RHP p.80, RHP p.127, RHP p.130. At ₹175 the market capitalisation is about ₹60,454.92 lakh (our arithmetic, RHP p.76). Enterprise value uses the shares before the offer, borrowings of ₹11,464.01 lakh and cash of ₹166.77 lakh: ₹61,569.59 lakh (our arithmetic, RHP p.78, RHP p.79). The pre-IPO placement was at ₹165 (RHP p.114).

The two named peers traded at 10.1 and 14.6 times earnings on August 26, 2026 (RHP p.128). At the upper band the issue is priced at 11.8 times FY26 EPS and 15.2 times FY26 profit on the enlarged share count.

18Subscription

Bidding opens on September 23, 2026 and closes on September 25, 2026, per the NSE issue page. This study was written before bidding opened. The lot is 81 shares, ₹14,985 at the upper band.

19Risks, in plain words

Cash — operating cash flow was negative in each of the last three years (RHP p.81) → growth depends on borrowing and on the utilities paying on time → short-term borrowings were ₹11,209.25 lakh (RHP p.79).

Customers — government utilities were 96.87% of FY26 revenue (RHP p.32) → delays in their payments or budgets hit the company directly, as the prospectus says (RHP p.32).

Order concentration — one Rajasthan order is ₹22,533.55 lakh (RHP p.34), against unexecuted work of ₹91,655 lakh (RHP p.33).

Issue-specific — four promoters are selling 12,03,000 shares in the offer (our arithmetic, RHP p.1).

20Litigation and regulatory matters

Source: RHP p.353. The tax cases include TDS demands from 2007-08 and 2008-09 of the predecessor firm and GST demands in West Bengal (RHP p.353).

21Related-party transactions

The summary of related-party transactions runs from RHP p.84; this study did not reproduce it.

22What the offer document does not say

A breakdown of the ₹20,192.67 lakh of other current financial assets is not given in the pages read. Customer-by-customer revenue is not given in the pages read. The general corporate purposes amount and offer expenses are left blank.

23Five questions for management

1. What are the ₹20,192.67 lakh of other current financial assets — unbilled work, retentions or deposits — and how old are they?
2. When does the company expect operating cash flow to turn positive?
3. How much of the ₹91,655 lakh of unexecuted orders falls due in FY27?
4. What interest rate does the company pay on its ₹11,209.25 lakh of short-term borrowings?
5. Why are four promoters selling shares in the offer while the company raises money for working capital?

1Sources and cited facts

This study was read from 1 document the company filed. The 49 figures it cites are listed under the document each came from, with the page and the sentence as printed.