Sedemac
IPO Size: Rs. 1,087 cr, Entirely Offer for sale (OFS)
- Mainly by 6 financial investors like A91, 360 One, Nandan Nilekani family office, HDFC Life (51% combined stake to 35% post IPO)
- Rs 15 cr OFS by the promoters (26% stake post IPO)
Price band: Rs. 1,287-1,352 per share
M cap: Rs. 5,971 cr, implying 18% dilution
IPO Date: Wed 4th Mar to Fri 6th Mar 2026, Listing Wed 11th Mar 2026
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Pune-based Tier-1 Component Maker
Sedemac Mechatronics is a 19 year old, IIT-B-professor co-promoted manufacturer of control-intensive, critical-to-application Electronic Control Units (ECUs) to OEMs in India and US. It has two planst in Pune, with 93% capacity utilisation for 9MFY26 and is expanding capacity by over 150%.
Revenue Concentration Risk
85% of Rs. 1,000 cr revenue is generated from mobility segment (mainly India) and balance from genset controller for industrial use, from India and US.
Within mobility, 80% is 2W and 20% from 3W, whereas largest customer TVS Motor accounts for 75% of company’s revenue. Top 3 customers comprise 91% of revenue, implying huge risk. This also implies future growth to be dependant on the 2W OEM, and not merely capacity expansion.
Another big concern is heavilty dependant on engines / ICE segment. Despite investing ~7% revenue in R&D, barely 6% of reveneue comes from electric 2W/3W, a fast growing segment and the future of mobility.
Growing Financials
FY25 revenue stood at Rs. 658 cr, with PAT of Rs. 47 cr. In line with increased capacity, 9MFY26 revenue rose to Rs. 771 cr, with operating leverage raising PAT to Rs. 71 cr, leading to a net margin of 9.2% and an EPS of Rs. 16. On a net worth of Rs. 410 cr, debt is meagre at Rs. 47 cr, with RoE healthy at 23%.
Expensively Priced
Annualising 9MFY26 EPS of Rs. 16 leads to a current year PE multiple of 68x, which is seen very expensive. Even if capacity expansion is factored in, PE of about 35x for 1-2 years forward basis is unattractive, given dependence on legacy technology and single client.
4th Mar 2026 at 09:20 pm