Swastika Infra

Swastika Infra

By Geetanjali Kedia
about 2 days ago

IPO Size: Rs. 161 cr

  • Fresh Issue of Rs. 129 cr (20% dilution) to fund Rs.90 cr working capital
  • Offer for Sale (OFS) of Rs. 32 cr – 2/3rd by promoter (77% stake to drop to 57%) and balance by two individual shareholders (14.6% combined stake to drop to 10%)

Price band: Rs. 175-185 per share

M cap: Rs. 632 cr (IPO is 26% of m cap)

IPO Date: Wed 23rd Sep to Fri 25th Sep 2026, Listing Wed 30th Sep 2026

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

 

Engineering Procurement Construction (EPC) for Power Sector

Swastika Infra is a 55-year-old Jaipur based EPC player specializing in execution of power transmission and distribution projects. As of 31.7.26, its order book stood at Rs. 917 cr, representing a book-to-bill of 1.9x, based on FY26 revenue of Rs. 504 cr.

While order book has increased from Rs. 343 cr as of 31.3.22 to Rs. 687 cr as of 31.3.26 and further to Rs. 917 cr as of 31.7.26, book-to-bill ratio of 1.9x has not increased over the years. Thus, order win is not growing as fast as the orders are being executed, which can slow down future growth.

 

Growing Financials

Company’s revenue has increased from Rs. 210 cr in FY24 to Rs. 504 cr in FY26, with EBITDA margin expanding from 11% to 14% during this period. FY26 PAT stood at Rs. 41 cr, leading to a healthy 8% net margin and an EPS of Rs. 15.7.

 

But Stretched Working Capital

While business is asset-light, due to negligible fixed assets, need for working capital is very large. As of 31.3.26, net working capital stood at Rs. 256 cr implying over 6 months of revenue. This will keep fund requirement elevated, as turnover grows, which also explains the need for 20% dilution for working capital funding alone.  

 

Leveraged Balance Sheet

Post IPO, with Rs. 98 cr net debt, the net debt to EBITDA ratio of 1.1x is quite high, as no debt is being retired from fresh issue proceeds.

 

Fully Priced Micro-Cap Stock

M cap of Rs. 632 cr and Enterprise Value of Rs. 729 cr implies a current year estimated PE multipe of 10.5x, on FY27E expected EPS of Rs. 17.5-18, and an EV/EBITDA multiple of close to 8.4x, on estimated EBITDA of Rs. 85 cr for FY27E, which makes the IPO fully priced.

  • Similar sized Om Power Transmission with Rs. 450 cr topline in FY26, 13% EBITDA margin, and Rs. 40 cr PAT (same as Swastika), and lower leverage with 0.6x net debt to EBITDA ratio, has a m cap of Rs. 582 cr and EV of Rs. 623 cr.
  • Larger peer Transrail with Rs. 7,000 cr topline, same EBITDA margin of 14%, net debt free balance sheet and a higher book-to-bill of 2.3x is trading at a PE of 15x, and EV/EBITDA of 6.8x.

Thus, not much is left on the table for prospective investors of Swastika Infra IPO.

In July 2025, company had raised Rs. 40 cr primary capital at Rs.165 per share. 12% premium over 14 months is not unjustified.