MV Electronics
MV Electronics
IPO Size: Rs. 290 cr, Entirely Fresh Issue
- Rs. 180 cr for working capital
- Rs. 21 cr for R&D
Price band: Rs. 400-425 per share
M cap: Rs. 1,160 cr, implying 25% dilution
- Only 10% retail, as company reported loss for FY26
IPO Date: Thu 30th Jul to Mon 3rd Aug 2026, Listing Thu 6th Aug 2026
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Propulsion Systems for Railway Rolling Stock
MV Electronics is a 16 year old Faridabad, Haryana based propulsion equipment manufacturer for railways. It has Rs. 922 cr order book, as of 30.6.26, comprising 564 propulsion equipment, guided to be executed in 1-1.5 years. But Q1FY27 execution needs to be monitored, as FY26 revenue of Rs. 50 cr comprises hardly Rs. 4.7 cr from propulsion business, despite approval for prototype received on 15 Sep 2025.
Similarity with Group Company Quadrant Future Tek
2 promoters and non-executive directors of MV Electronics, Mr. Mohit Vora and his cousin Mr. Amit Dhawan, owning 29% and 5% stake in the company respectively, are common with group company Quadrant Future Tek.
Quadrant having undertaken an IPO in Jan 2025, has quite a few similarities with MV – raised Rs. 290 cr via fresh issue, key object was working capital, same BRLM (Sundae Capital), catering to railway sector with clearance obtained before the IPO, a promising order book built prior to IPO. While Quadrant IPO was subscribed 187x, its execution could not keep up the promise of IPO. The guided 12 month order book execution has since elapsed but revenue has remained stagnant, bottomline turning into net loss. As the hype settled, share price halved from a high of Rs. 697 post listing, to Rs. 346 now, yet it above the IPO price of Rs. 290, after 18 months.
Due to the uncanny similarity between IPO stories of MV Electronics and Quadrant Future, and Quadrant’s post listing track record, we’d like to be cautious on MV’s execution capability.
Very Low R&D Expenses
Company likes to call itself a railway technology company.
But total R&D expenses was Rs. 9 cr, Rs.7 cr, Rs. 7.4 cr and Rs. 6.7 cr in FY26, FY25, FY24 and FY23 respectively. Thus, just Rs. 30 cr was spent on R&D in 4 years – which appears very low for developing a critical engineering product. Railway propulsion supplies comprising the likes of Alstom India, Siemens India, BHEL, Hitachi, ABB probably spend that much annually on R&D. Something does not add up!
In addition to this, fresh issue proceeds of Rs. 21 cr are earmarked for R&D over next 4 fiscals. If company’s huge order book is executed as guided, then R&D can be funded internally. Thus, the object of IPO looks structured.
Losses in FY26
Company’s revenue has declined from Rs. 68 cr in FY23 to Rs. 49 cr in FY26 while net profit of Rs. 1.2 cr in FY23 is quite petty (1.8% net margin). FY26 bottomline was in the red, with a massive Rs. 13 cr net loss, or negative 25% net margin.
Based on future working capital needs, FY27E revenue is estimated over Rs. 400 cr. This remains a monitorable, whether company can clock Rs. 100 cr or even Rs. 50 cr revenue in Q2FY27E, to provide comfort and visibility.
Unjustified 55% Premium in 9 Months
In Aug-Oct 2025, company raised Rs. 60 cr via private placement at split-adjusted price (of Nov 2025) of Rs. 273.50 per share, onboarding investor Madhu Kela with 6% holding among others. After 9 months, it is seeking a 55% higher price without any improvement in financials, while the propulsion prototype approval was already received on 15 Sep 2025, making the IPO pricing unjustified.
Promoter stake of 77% currently will dilute to 58% post IPO. Why would promoters not want to participate in the company’s immediate growth story?
Do not get lured by the order book alone, as execution remains the key. Let company first show some performance. Better to be safe late than sorry.
Anyways MV Electronics’ micro-cap status, without much comfort on R&D, make it a risky bet. We do not rule out a play beyond fundamentals, post listing, as was seen in Quadrant Future Tek.