Tmc Transformers India Limited IPO

01At a glance

What the company does: designs and makes oil-filled transformers up to 160 MVA / 220 kV, dry-type transformers up to 20 MVA / 36 kV and compact substations, including traction, cast-resin, furnace, solar inverter-duty and distribution transformers; a subsidiary processes CRGO electrical steel (AP p.3, AP p.4).

Who pays it: railways, metro, renewable-energy, industrial and distribution-utility customers in India, and export customers in markets including the USA, Nigeria, Saudi Arabia, Mexico and the UK (AP p.3). Railways were 42.19% of FY26 revenue, and the top five customers 56.40% (AP p.4, AP p.10).

Why it is raising money: ₹2,317.76 million for a greenfield extra-high-voltage transformer plant at Halol, Gujarat, ₹1,659.52 million for working capital, and the rest for general purposes (AP p.5).

How fast it has grown: revenue from ₹2,475 million in FY24 to ₹4,172 million in FY26, and profit from ₹151 million to ₹957 million (AP p.7).

The one thing to understand: a small transformer maker whose margins have jumped and which now plans a plant many times its current size. EBITDA margin rose from 9.04% in FY24 to 31.89% in FY26 (our arithmetic), and the new plant is meant to add 78,000 MVA of annual capacity against 8,500 MVA today (AP p.4, AP p.7, DRHP p.40).

02The business, in plain words

Transformers step voltage up or down so electricity can be transmitted and used. Railway traction substations, solar plants, metro systems, factories and power distributors each need transformers built to their own specification, usually bought through tenders or project orders.

A railway electrification contractor needs traction transformers for a 2×25 kV substation → it orders from an approved supplier such as TMC → TMC designs and builds them in Vadodara, tests them and ships them → it is paid against the order's milestones.

The company says it is the only Indian manufacturer certified by RDSO, the railways' standards body, for all classes of transformer needed for 2×25 kV traction substations, a claim it attributes to the CRISIL report (AP p.3). Its transformer plant and its subsidiary's CRGO steel-processing plant are both in Vadodara (AP p.4).

Earnings equation: Profit ≈ MVA shipped × (price per MVA − copper, CRGO steel and other material − conversion cost). Purchases from the top ten suppliers were 79.92% of the cost of goods sold in FY26 (AP p.10).

03Where the money comes from

Source: AP p.4, AP p.10, DRHP p.30.

Railway revenue more than doubled in FY26, to ₹1,760.49 million (AP p.10). The order book was ₹6,734.18 million at March 2026, about 1.6 times FY26 revenue (AP p.11, our arithmetic).

04The growth record

Source: AP p.7, AP p.8. Margins are our arithmetic.

Trade receivable days went from 80 in FY24 to 105 in FY26 (DRHP p.42). Other income was ₹24.14 million in FY26 against profit before tax of ₹1,280.87 million, or 1.9% of it (our arithmetic, DRHP p.90).

05What the growth is made of

Revenue grew 9.8% in FY25 and 53.6% in FY26 (our arithmetic, AP p.7). The margin jump came first: EBITDA nearly tripled in FY25 on revenue up less than 10% (AP p.7). The document describes a shift towards higher MVA and kV classes as supporting improved margins (AP p.4). Plant utilisation rose from 28.53% in FY24 to 57.88% in FY26 (DRHP p.27).

06Earnings quality

Operating cash flow turned negative in FY26, at ₹98.19 million, while profit was ₹957.12 million (AP p.7, AP p.8). The statutory auditors included emphasis-of-matter paragraphs in the special-purpose consolidated statements for all three years, and CARO observations in the FY26 audit reports of the company and its subsidiary (AP p.10). The company has had delays in paying statutory dues in each of the three years (AP p.10).

07The balance sheet

Source: AP p.7.

Borrowings rose more than fivefold in FY26, as investment outflows reached ₹851.05 million (AP p.7, AP p.8). The company has issued Series A compulsorily convertible preference shares in the past year, which are to convert into equity before the red herring prospectus (DRHP p.76).

08What the money is for

Source: AP p.5.

The Halol plant is meant to make transformers up to 500 MVA / 765 kV and add 78,000 MVA of annual capacity by FY29, at a total cost of ₹3,057.80 million; the company has already spent ₹451.21 million on it (DRHP p.40). A pre-IPO placement of up to ₹1,100 million may reduce the issue (AP p.5). The issue is made under Regulation 6(2) of the SEBI ICDR Regulations because the company does not meet Regulation 6(1)(a) (AP p.1).

09Who is selling

Nobody. This is a fresh issue only; no existing shareholder is offering shares (AP p.1).

10Promoters

The promoter is Hriday Narayan R Shukla, chairman and managing director, associated with the company since 21 October 2015, with about 24 years in electrical insulation and transformer manufacturing (AP p.5). The promoter cannot trace a senior secondary education certificate (AP p.5). The promoter's average cost of acquisition is ₹3.13 a share (AP p.11). Managerial remuneration to the promoter began in FY25, and the promoter was paid ₹25.00 million in FY26 (DRHP p.394, DRHP p.300).

A share swap agreement dated 16 April 2025 was entered into between the promoter, two promoter-group members, the company and its material subsidiary (DRHP p.9).

11Who already owns it

Source: AP p.6.

Shareholders outside the promoter group in the top ten hold 7.30% in all (AP p.7).

12What changed just before the IPO

• Margins: EBITDA margin rose from 9% to 32% in two years (AP p.7).
• Borrowings: up from ₹207 million to ₹1,174 million in FY26 (AP p.7).
• Preference shares: Series A CCPS issued in the past year (DRHP p.76).
• Share swap: April 2025 agreement involving the subsidiary (DRHP p.9).
• Compliance: adjudication applications filed with the RoC on 27 June 2026 (DRHP p.33).
• Bonus issue: 2,825 equity shares for every one held, allotted on 6 June 2026 (DRHP p.106).
• Last allotment: 833,333 equity shares at ₹600 a share to Motilal Oswal Finvest Limited and Frangipani Capital Advisors LLP on 25 June 2026 (DRHP p.106).
• Auditor change: M/s. B.R. Pancholi & Co. resigned as statutory auditor in March 2025 and M/s. M P P S & Co was appointed in its place in 2025 (DRHP p.98, DRHP p.99).
• Public company: the company became a public limited company with a fresh certificate of incorporation dated 11 June 2025 (DRHP p.96).

13Capacity and expansion

Source: AP p.4, DRHP p.27.

The Halol plant would add 78,000 MVA a year and move the company into 765 kV transformers (DRHP p.40). Its completion depends on outside contractors and approvals (DRHP p.40).

14Market size and industry structure

The CRISIL report cited in the offer document says power transformers make up about 50 to 55% of India's transformer market, followed by distribution and traction transformers (AP p.5).

15Competitive position

What the document claims, and what it rests on:

• RDSO approvals across railway transformer classes (AP p.3).
• A range across insulation types and voltages, with in-house design and testing (AP p.3, AP p.4).
• CRGO processing in-house through the subsidiary (AP p.4).

Against that: growing dependence on railways and a few customers, and larger listed competitors (AP p.10, DRHP p.148).

16Peers the company named

Source: DRHP p.148, DRHP p.149. Peer P/E uses prices on 24 June 2026.

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

17Risks, in plain words

• Railways. 42% of revenue depends on railway tenders and budgets (AP p.10).
• Customer concentration. Ten customers were 74.65% of FY26 revenue (AP p.10).
• Supplier concentration. Ten suppliers were 79.92% of the cost of goods sold, with no long-term contracts (AP p.10).
• A large new plant. Execution, cost and approval risk on Halol (DRHP p.40).
• Order book. Orders can be delayed, modified or cancelled (AP p.11).
• Name. The company's name is not registered as a wordmark, and unrelated "TMC" entities exist (DRHP p.72).

18Litigation and regulatory matters

Source: AP p.13.

On 27 June 2026 the company filed suo moto adjudication applications with the RoC, including one for failing to spend ₹0.74 million of required CSR in FY24 because net profit was computed after tax instead of before tax; the shortfall has since been transferred to a specified fund (DRHP p.33).

19Related-party transactions

The share swap agreement of April 2025 involved the promoter, two promoter-group members and the material subsidiary (DRHP p.9). Other related-party transactions were not read for this study.

20What the offer document does not say

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

• The names and shares of the largest customers.
• What drove the margin jump in FY25, beyond the shift to higher-rated products.
• The terms of the share swap and what the promoter family received.
• The conversion terms of the Series A CCPS, 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 FY25 margin jump came from product mix, and how much from lower material costs?
2. How will a 78,000 MVA plant be filled when the current 8,500 MVA plant ran at 58% in FY26?
3. Who is the largest customer, and what share of the ₹6,734 million order book do railways make up?
4. What did the promoter family receive under the April 2025 share swap?
5. What do the auditors' emphasis-of-matter paragraphs and CARO observations concern?

2Sources and cited facts

This study was read from 2 documents the company filed. The 66 figures it cites are listed under the document each came from, with the page and the sentence as printed.