Om Power Transmission IPO Review: Strong Growth Story, One Big Risk You Cannot Ignore

Om Power Transmission is going public, and its IPO opens April 9 and closes April 13, 2026. Shares are priced between ₹166 and ₹175 each. The total issue size is ₹150.06 crore. The Grey Market Premium (GMP), an unofficial indicator of market sentiment, currently stands at ₹7 per share, suggesting a 4% gain over the issue price.

By the end of this article, you will understand what the company does, how it makes money, where the IPO money goes, what the numbers say, and what risks to think about before investing.

Key IPO Details

Disclaimer: GMP is an unofficial indicator and is subject to market volatility.

How Om Power Transmission Makes Money

In simple words: the government needs a new power line, it announces a public tender (an open competition), Om Power submits a price, and if it wins, it gets paid in stages as the work progresses. Here is the full picture.

Project-Based Revenue (EPC Contracts): EPC stands for Engineering, Procurement, and Construction. The company designs the layout, buys all the materials (towers, cables, safety hardware), builds the infrastructure, and hands it over. Revenue comes in milestone-linked payments throughout a project. Most clients are government electricity utilities.

Operations & Maintenance Contracts: Once a project is built, Om Power often signs long-term maintenance deals. This is like a service subscription - they regularly inspect and repair power lines and substations. Currently, it manages 124 substations under O&M contracts, giving it a recurring, steadier stream of income alongside the bigger project work.

A Tender-Driven Growth Model: The company actively hunts for government and private sector tenders. It wins roughly 1 in every 3 bids, a project win rate of 35.71%, which is quite solid in a competitive industry.

Objectives of the IPO: Where Will the IPO Money Go?

The company is raising ₹131.69 crore through a fresh issue, which is planned to use for the following purposes:

• Buy Machinery & Equipment - ₹11.21 Crore: With 58 ongoing projects worth ₹744.60 crore to execute, new equipment is essential. Think of it as buying better tools before taking on more work.
• Repay Bank Loans - ₹25 Crore: Current debt stands at ₹38.47 crore. Paying down a chunk reduces interest costs, improves the debt-to-equity ratio (how much debt vs. its own money), and frees up cash for future growth.
• Fund Working Capital - ₹55 Crore: Working capital is the day-to-day cash needed to buy materials, pay workers, and keep projects running. This requirement has already jumped from ₹56.41 crore in FY23 to ₹149.85 crore by December 2025, driven by bigger projects and expansion into new states.
• General Corporate Purposes: The remaining amount will be used for routine operations and any strategic moves that come up.

Note: The OFS portion of ₹18.38 crore goes directly to the three selling shareholders, Kalpesh Dhanjibhai Patel, Kanubhai Patel, and Vasantkumar Narayanbhai Patel.

Strengths:

• Strong Order Book with Clear Revenue Visibility: The ₹744.60 crore order book is nearly 2.7 times FY25 revenue. This is like having your project calendar booked nearly three years ahead. With most of this contracted and confirmed, revenue visibility is strong, and execution risk is manageable.
• Government Trust and a Proven Track Record: The company holds an 'AA Class' certification from Gujarat's state utility, a mark of credibility reserved for companies that can handle large, complex projects. It has completed over 440 circuit kilometres of power lines and built 11 substations. Consistent delivery builds the kind of trust that wins the next contract.
• Geographic Expansion Into High-Growth Zones: Om Power started in Gujarat, but has already secured ₹88.45 crore worth of projects in Punjab and ₹33.61 crore in Rajasthan, both states with aggressive renewable energy build-outs. This reduces dependence on one region and opens up growth in the clean energy corridor, which is exactly where India's infrastructure spending is headed.

Risks:

• Heavy Client Concentration: GETCO (Gujarat Energy Transmission Corporation) alone contributed 71.55% of revenue in the nine months ending December 2025. The top 10 clients together account for 97.65% of total revenue. If GETCO slows spending, delays a project, or changes vendors, it can materially hit the company's earnings.
• Cash Flow Pressure Despite Reported Profits: The company showed a negative operating cash flow of ₹37.39 crore in 9M FY26, even while reporting strong profits. Operating cash flow is the real cash coming in from business activities. When profits don't convert into cash, it creates pressure on daily operations. As of December 2025, ₹144.07 crore in unpaid customer bills were outstanding, with ₹11.26 crore overdue for more than six months.
• Fixed-Price Contracts in a World of Rising Material Costs: About 36.08% of its projects are fixed-price, meaning if steel or aluminium prices rise after the contract is signed, the company absorbs the extra cost. Material expenses already eat up over 51% of total income. A sudden price spike in raw materials can quickly erode profits.

For detailed information, visit Om Power Transmission’s official IPO page at INDmoney.

Peer Comparison

Source: RHP, internal calculation

Revenue: Growing, But Not the Biggest Yet: At ₹279.4 crore, Om Power is ahead of Viviana Power Tech (₹219 crore) but still a fraction of the size of Rajesh Power Services (₹1,107 crore). It's a mid-sized player, which also means there is meaningful room to scale.

Gross Margins: Better Than Most: Its gross margin of 24.92% beats Rajesh Power Services (19.11%) and Advait Energy Transitions (21.90%). Only Viviana Power Tech runs higher at 38.13%. Good cost discipline for a company at this stage of growth.

Valuation: Reasonably Priced: At 19.23x P/E, it is cheaper than both Advait Energy Transitions (57.52x) and Viviana Power Tech (25.15x), and only slightly above Rajesh Power Services (16.38x). Given its 88% profit growth last year and a strong order book, the valuation looks balanced, not cheap, not stretched.

Return on Equity: Room to Improve: Its RoE of 35.83% is solid, but Rajesh Power Services (53.69%) and Viviana Power Tech (49.14%) are more efficient. As Om Power scales geographically and operating leverage kicks in (earning more without proportionally increasing costs), this gap could narrow over time.

IPO Valuation

At ₹175 per share, the company is valued at a post-IPO P/E of 19.23x. So, you're paying ₹19.23 for every ₹1 of profit the company earned.

The broader sector average sits at roughly 33x P/E. Rajesh Power Services trades at 16.38x, while Advait Energy Transitions commands 57.52x. Om Power sits well below the sector average, suggesting pricing that is reasonable, neither deeply discounted nor aggressively stretched.

What you get at this price:

• A business that grew profits by ~88% in one year (to ₹22.08 crore in FY25).
• A confirmed order book of ₹744.60 crore - 2.7x last year's revenue.
• A post-IPO balance sheet that will be meaningfully cleaner after ₹25 crore of debt repayment.

Insight: This "debt paydown dividend" is often underappreciated in small-cap IPOs. Lower debt means lower interest costs, which directly boosts future profitability, even if revenue doesn't grow at all. The company's interest bill should shrink noticeably after the IPO, quietly adding to the bottom line.

The one number that tempers this optimism: GETCO accounts for over 71% of revenue. At 19.23x, the valuation feels like a fair entry, but it is not without its caveats.

Disclaimer: The P/E ratio here is calculated using the company’s post-IPO equity and its most recent (9M FY26) net profits at the upper end of the price band.

Analyst View

Om Power Transmission operates in a sector with a genuine, long-term tailwind. India is investing heavily in renewable energy, and every solar farm or wind park needs transmission infrastructure to connect to the grid. That infrastructure is exactly what this company builds.

The financials are compelling on the surface, 52% revenue CAGR, 88% profit growth, and strong return ratios. But the negative operating cash flow of ₹37.39 crore in 9M FY26 is worth taking seriously. In infrastructure businesses, the gap between book profits and actual cash can be wide. Sustained negative operating cash flows eventually create funding pressure, and this will be a key metric to watch in post-listing quarters.

The order book-to-revenue ratio of 2.7x is a genuine positive. It provides visibility. But 71.5% dependence on a single government client means that visibility is also fragile. Any policy change, budget freeze, or procurement delay by GETCO could disproportionately impact quarterly results.

At 19.23x P/E, the valuation looks fair relative to peers. For investors comfortable with small-cap exposure and a 2–3 year investment horizon, this could be a reasonable entry as the company diversifies geographically and scales. For those seeking near-term certainty or minimal risk, the client concentration and cash flow concerns warrant caution.

For a seamless application process, visit the INDmoney IPO page.

Disclaimer

Source: Om Power Transmission's RHP. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Please be informed that merely opening a trading and demat account will not guarantee investment in securities in the IPO. Investors are requested to do their own independent research and due diligence before investing in an IPO. Please read the SEBI-prescribed Combined Risk Disclosure Document prior to investing. This post is for general information and awareness purposes only and is nowhere to be considered as advice, recommendation, or solicitation of an offer to buy or sell, or subscribe for securities. INDstocks is acting as a distributor for non-broking products/services such as IPO, Mutual Fund, and Mutual Fund SIP. These are not exchange-traded products. All disputes with respect to the distribution activity would not have access to the Exchange investor redressal forum or the Arbitration mechanism. INDstocks Private Limited (formerly known as INDmoney Private Limited) does not provide any portfolio management services, nor is it an investment adviser. Logos above are the property of respective trademark owners, and by displaying them, INDstocks has no right, title, or interest in them. SEBI Stock Broking Registration No: INZ000305337, Trading and Clearing Member of NSE (90267, M70042) and BSE, BSE StarMF (6779), SEBI Depository Participant Reg. No. IN-DP-690-2022, Depository Participant ID: CDSL 12095500, Research Analyst Registration No. INH000018948 BSE RA Enlistment No. 6428.