Raksan Transformers IPO

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Chanakya View

Raksan Transformers Limited is an established transformer manufacturer with three decades of operating history, two production facilities and relationships with government utilities, public sector undertakings, EPC contractors and industrial customers. Its strong order book, in-house manufacturing capabilities and backward integration through a group company provide visibility.

Total income increased from Rs. 162.52 crore in FY 2024 to Rs. 363.63 crore in FY 2026, while profit after tax rose from Rs. 7.59 crore to Rs. 33.60 crore. FY 2026 PAT grew 65%, ROCE stood at 46.72%, and debt-to-equity improved to 0.27. The post-issue P/E of 16.98 times appears reasonable.

The fresh issue will finance a new manufacturing facility, working capital and debt repayment, which should support expansion. However, Rs. 30.03 crore represents an offer for sale and will not benefit the company. Dependence on government orders, raw-material price volatility and SME liquidity remain risks.

The IPO has fundamentals, but investors should assess GMP and subscription quality before applying.

Chanakya Recommendation: 🟡 Selective Apply

About the Company

Incorporated in 1995, Raksan Transformers Limited manufactures distribution transformers, power transformers, solar-application transformers and special-purpose transformers. It began with transformer repair and servicing before entering manufacturing during 2005–06.

The company operates two facilities at Rai, Sonepat, Haryana, with installed capacity of 15,00,000 KVA for distribution transformers and 1,350 MVA for power transformers. Its operations include core cutting, coil winding, tank fabrication, assembly, oil filtration, welding and testing. In-house facilities and a testing laboratory help maintain product quality and execution control.

Raksan Transformers is an approved vendor for more than 20 entities. Its products comply with BIS requirements, while products carry ISI and BEE STAR certifications. As of 30 June 2026, the company employed 143 people, including 113 production employees.

Why This IPO Stands Out

✅ More than 30 years of experience in the transformer industry.

✅ Revenue more than doubled between FY 2024 and FY 2026.

✅ FY 2026 profit after tax increased 65% to Rs. 33.60 crore.

✅ Strong ROCE of 46.72% and RoNW of 43.41%.

✅ Debt-to-equity declined from 0.53 to 0.27.

✅ Fresh capital will create manufacturing capacity and support working capital.

Key Risks

⚠ Government and utility orders may involve tender delays, execution risks and payment cycles.

⚠ Copper, aluminium, CRGO steel and transformer oil prices can affect margins.

⚠ The Rs. 30.03 crore offer for sale provides no funds to the company.

⚠ Capacity expansion may face construction, commissioning or utilisation delays.

⚠ SME shares can experience limited liquidity and post-listing volatility.