The Yash Highvoltage IPO is opening for subscription from 12th December 2024 to 16th December 2024, offering shares at a price range of ₹138 to ₹146. With an issue size of ₹110.01 crore, this IPO has generated significant interest, particularly in the power sector, which has seen growing demand in recent years. In this blog post, we will provide a detailed review of Yash Highvoltage, discussing its strengths, risks, financial performance, and whether the IPO is worth subscribing to.
Yash Highvoltage IPO Overview
| Bidding Dates | Min. Investment | Lot Size | Price Range | Issue Size |
|---|---|---|---|---|
| 12 Dec ‘24 – 16 Dec ‘24 | ₹1,38,000 | 1,000 | ₹138 – ₹146 | ₹110.01 Cr |
Also Read: Yash Highvoltage IPO: Everything You Need to Know Before Investing
About Yash Highvoltage
Yash Highvoltage Limited is a leading manufacturer and distributor of a wide range of transformer bushings. These include oil impregnated paper (OIP) condenser bushings, resin impregnated paper (RIP) / resin impregnated synthetic (RIS) condenser bushings, and high voltage and high current bushings. The company also provides repairing, retrofitting, and replacement services for old bushings and offers on-site/off-site technical testing for bushings.
Founded in 2002 as Yash Highvoltage Insulators Private Limited and later taken over by Keyur Girishchandra Shah in 2008, Yash Highvoltage has established itself as a prominent player in the transformer bushing market. Its manufacturing unit, located in Vadodara, Gujarat, has an annual installed capacity of producing 7,000 bushings. The company’s products are trusted by major enterprises in the power sector, including government of India-led enterprises.
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Key Highlights of Yash Highvoltage’s Business
- Diverse Product Portfolio: Yash Highvoltage offers a variety of transformer bushings, catering to both high voltage and high current applications. The company also specializes in RIP and RIS bushings, making it a key player in this niche market.
- Proven Track Record: Over the years, the company has gained a reputation for delivering high-quality products, supported by its strong client base, including public sector companies and large private players in the power industry.
- Technology Partnerships: Yash Highvoltage has collaborated with a Switzerland-based company to pioneer the localization of explosion-proof and advanced RIP/RIS bushings, a significant technological advancement in the transformer bushing space.
- Experienced Management: Led by Keyur Girishchandra Shah, the company has a highly experienced management team with a deep understanding of the industry, which has contributed to its steady growth over the years.
Strengths of Yash Highvoltage
- State-of-the-Art Testing Facilities: Yash Highvoltage operates two in-house electromagnetically shielded high-voltage testing laboratories with 300kV AC and 600kV AC & 1500kVp impulse testing capabilities. These facilities allow the company to perform rigorous testing and ensure the reliability and safety of its products.
- Strong Client Base: The company has built a strong customer base, exporting to 24 countries globally. In FY24, it added 98 new clients, which further highlights its growing reach and reputation.
- Sustained Growth: Over the past few years, Yash Highvoltage has exhibited steady growth in revenue and profit after tax (PAT). From FY22 to FY24, its revenue from operations grew from ₹65.06 crore to ₹108.48 crore, while PAT increased from ₹8.71 crore in FY22 to ₹12.06 crore in FY24, marking consistent upward growth.
- Tailwinds for the Industry: The growing demand for power in India, the government’s ‘Make in India’ initiative, and the electrification of railways provide strong tailwinds for the company. The power sector is poised for significant growth, benefiting companies like Yash Highvoltage.
- Market Leadership: The company claims to be a dominant player in manufacturing high-voltage transformer bushings up to 245kV and high-current bushings up to 25,000 amps. Its ability to manufacture specialized products sets it apart from competitors.
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Risks Associated with Yash Highvoltage IPO
While Yash Highvoltage has several strengths, there are some risks that investors should consider before subscribing to the IPO:
- Manufacturing Unit Delays: The company plans to use a portion of the IPO proceeds to set up a new manufacturing unit in Vadodara, Gujarat. However, no orders have been placed for key plant machinery, and necessary government approvals are pending. Any delays in setting up this unit could affect the company’s growth prospects.
- Client Concentration Risk: A significant portion of Yash Highvoltage’s revenue comes from its top 10 clients, accounting for over 80% of its total revenue. Losing any of these key clients or experiencing a slowdown in their business could negatively impact the company’s financials.
- Dependence on Transformer Bushings: The company’s revenue is heavily reliant on a single business segment—transformer bushings. Any adverse impact on the sales of transformer bushings could adversely affect the company’s operations and profitability.
- Geographical Concentration: Yash Highvoltage’s operations are concentrated in Vadodara, Gujarat. Any disruption in this region could negatively impact the company’s business.
- Negative Cash Flow: The company has experienced negative cash flow from its investing and financing activities in the past three financial years. A continuation of this trend could raise concerns about its financial health.
- Legal Risks: Yash Highvoltage is involved in certain ongoing legal proceedings. Any adverse judgment in these cases could harm the company’s reputation and financial stability.
Yash Highvoltage IPO Objectives
The proceeds from the IPO are expected to be used for the following purposes:
- Setting up a new manufacturing facility to produce RIP/RIS transformer bushings.
- General corporate purposes, which may include debt repayment and working capital needs.
Valuation and Pricing
The Yash Highvoltage IPO is priced in the range of ₹138 to ₹146 per share. Based on its FY25 annualized earnings, the IPO appears fully priced. While the company has shown steady growth in revenue and profit, its reliance on a single product segment and the risks associated with the new manufacturing unit make the valuation slightly risky.
Should You Subscribe to Yash Highvoltage IPO?
Yash Highvoltage IPO Review: Dilip Davda: Apply
According to Dilip Davda, an IPO analyst, Yash Highvoltage IPO is worth considering for medium to long-term investors. The company has established itself as a dominant market player with a strong track record and steady growth. However, the company’s reliance on a single product segment, negative cash flow, and client concentration risk are factors to consider. Despite these risks, the company’s leadership in the transformer bushing market and the favorable industry tailwinds make the IPO an attractive investment option for long-term investors.
Investment Recommendations
Yash Highvoltage IPO Review-
| Reviewer | Recommendation |
|---|---|
| Dilip Davda | Apply |
| Stockesta.com | Apply |
Yash Highvoltage IPO Registrar
For inquiries related to the Yash Highvoltage IPO, the registrar is Bigshare Services Pvt Ltd.
- Phone: +91-22-6263 8200
- Email: ipo@bigshareonline.com
- Website: Bigshare IPO Status
Conclusion
The Yash Highvoltage IPO presents a unique opportunity to invest in a growing company with a strong foothold in the transformer bushing industry. While the company enjoys steady growth and strong demand in the power sector, risks like manufacturing delays, client concentration, and negative cash flow should be carefully considered. Investors with a medium to long-term horizon looking for exposure to the power sector may find this IPO attractive, provided they are willing to take on the associated risks.