IPO Review: Should You Invest in Vidya Wires’ ₹300 Cr IPO

Vidya Wires Limited (VWL) makes special copper and aluminium wires that act like “veins and arteries” for power systems, motors, transformers, EVs, and renewable energy projects in India and abroad. Its IPO of ₹300.01 crore is priced at ₹48–₹52 per share, open from 3–5 December 2025, and the latest GMP is around ₹6, which means an unofficial expected gain of about 11-12% over the issue price, but GMP is only a rough, informal sentiment indicator and can change very quickly.

In this blog, you will see what Vidya Wires does, how it makes money, where the IPO money will go, its strengths and risks, how it compares with peers, whether the valuation looks fair, and what all this could mean for a normal investor.​

IPO Overview

• IPO Date: December 3 to December 5, 2025
• Total Issue Size: ₹300.01 crore
• Price Band: ₹48 to ₹52 per share
• Minimum Investment: ₹14,976
• Lot Size: 288 Shares
• Tentative Allotment Date: December 8, 2025
• Listing Date: December 10, 2025 (Tentative)
• GMP: The GMP for the Vidya Wires IPO is ₹6, reflecting a 11.54% gain over the issue price, according to Chittorgarh.com.

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

How Vidya Wires Makes Money

Vidya Wires buys mainly copper and aluminium and turns them into high‑precision wires that go inside motors, transformers, and other electrical equipment. It sells more than 8,000 types of products (SKUs) to other businesses (B2B), such as power and transmission companies, general engineering firms, consumer durables makers, and EV/renewable energy players, with 318 active customers in Q1 FY26 and over 80% of revenue coming from repeat buyers.​

Most of the company’s sales come from Western India (mainly Gujarat and Maharashtra), but it also exports to more than 18 countries. It currently has 2 plants in Gujarat with an installed capacity of 19,680 MT and a very high utilisation of 94.51% in Q1 FY26, which means its factories are already running almost full and need more capacity to grow.​

How the value chain works

First, Vidya Wires sources copper and aluminium from a small set of large suppliers, with the top 5 vendors accounting for nearly 90% of raw material purchases in the June 2025 quarter, and copper alone forming more than 90% of material cost. Since copper prices move daily on global exchanges, the company usually locks in the copper price at the time of customer order so that it is not badly hit if prices move a lot later, though it cannot always pass every change to customers.​

Next, the company uses “backward integration,” which here means it converts copper cathodes (raw copper blocks) into copper rods in‑house for around 35-40% of its needs, giving better control over quality, cost, and supply. It then processes these rods into finished wires like enamelled wires, paper‑insulated copper conductors, copper busbars, and is planning new products such as solar cables and aluminium winding wires.​

Finally, it delivers to customers mostly on an order‑based model, so it produces after receiving confirmed orders, which reduces inventory risk. It also uses its own fleet of trucks for part of the logistics, helping on‑time delivery and service to key customers.

Objectives of the IPO

• New plant and capacity expansion: Around ₹140 crore from the fresh issue will go to a new manufacturing unit in subsidiary ALCU Industries at Narsanda, Gujarat, lifting total capacity by 18,000 MT per year from 19,680 MT to 37,680 MT. This will almost double capacity and support new products like solar cables and enamelled aluminium winding wires, helping Vidya Wires move deeper into fast‑growing segments like renewables and EVs.​
• Debt repayment: The company plans to use ₹100 crore to repay existing loans, which stood at about ₹206.14 crore as of mid‑November 2025. This should lower interest costs, improve the debt‑to‑equity ratio (how much debt it uses versus owners’ equity), and free up future cash flow for working capital and growth rather than paying interest to banks.​
• General corporate purposes: The remaining funds will be used for regular business needs like marketing, new assets, IT, and entering new segments or geographies when opportunities arise.
• Offer for Sale (OFS): The OFS of ₹26.01 crore is purely a sale by promoters Shyamsundar and Shailesh Rathi; the money from this part goes to them, not to the company.

Strengths:

• Strong growth in sales and profit: Revenue grew at a rate of around 21% per year between FY23 to FY25, driven by higher demand from power, infrastructure, auto, and renewables. Profit surged even faster, at nearly 38% per year during the same period.​
• Improving margins and efficient plants: EBITDA margin improved from 3.54% in FY23 to 4.32% in FY25 and 4.53% in Q1 FY26, showing better cost control and operating leverage. Fixed asset turnover (how much revenue the company generates per rupee of plant and machinery) is about 36 times in FY25, the highest among peers, which means its factories earn roughly ₹36 in revenue every year for each ₹1 invested in fixed assets.​
• High return on equity (ROE): ROE is 24.57% in FY25, versus an average of around 12% for peers like Precision Wires, Ram Ratna Wires and Apar Industries. This means, for every ₹100 invested by shareholders, Vidya Wires earned about ₹24-₹25 in profit in FY25.​

Risks:

• Negative cash flows despite profit: The company has reported negative cash flow from operations, investing, and financing in recent years, even though it makes accounting profits. This means cash is getting locked in inventory, receivables, capex, and debt servicing, and if this continues, it could strain funding for growth plans.​
• High dependence on copper and a few suppliers: More than 93% of revenue and over 92% of raw material purchases come from copper‑based products and copper rod/cathode, and the top 5 suppliers account for nearly 90% of raw material buys, with Vedanta and Marubeni alone over 60%. If copper prices spike or if any major supplier reduces support, margins and supply chain stability could suffer, especially since the company also pays suppliers very fast (trade payable days of just 2 days).​
• Aggressive expansion and execution risk: The company is almost doubling capacity by adding 18,000 MT, targeting a jump in market share from 5.7% (4th largest) to 11% (3rd largest). If demand from renewables, EVs, and infrastructure does not grow as fast as expected, or if the new plant faces delays or cost overruns, the extra capacity can drag margins and returns for a few years.​

For detailed information, visit Vidya Wires’s official IPO page at INDmoney.

Peer Comparison

Here is how Vidya Wires stands versus key listed peers, including Precision Wires, Ram Ratna Wires, and Apar Industries.

Source: RHP, internal calculation

Vidya Wires is much smaller than Apar but grows faster, uses its assets harder, and earns a higher ROE than all three peers. However, it does this with more debt and in a narrower product and customer set, whereas Apar and others have wider product baskets and lower leverage.​

IPO Valuation

At the upper price of ₹52, the post‑IPO P/E (price‑to‑earnings ratio) is about 27 times FY25 earnings, which means investors are paying ₹27 for every ₹1 of profit the company made in FY25. This is cheaper than peers trading at roughly 40-50 times earnings, so on current numbers, Vidya Wires is coming at a discount despite faster profit growth and higher ROE.​

The EV/EBITDA (enterprise value to operating profit) is about 18.9 times, again below peer multiples between roughly 20-29 times. The fresh issue will also repay ₹100 crore of debt, which should pull down the debt‑equity ratio from around 0.9 times and improve interest coverage, making the balance sheet a bit safer over time.​

Disclaimer: The P/E ratio here is calculated using the company’s post-IPO equity and its most recent FY25 net profits at the upper end of the price band.

People Behind the Company

Vidya Wires is a family‑led business with over four decades of history, now supported by a more professional management layer.​

• Shyamsundar Rathi (Chairman & Whole‑time Director) has been with the company since 1981 and has over 43 years’ experience in the winding and conductivity space, drawing remuneration of about ₹1.13 crore in FY25. One unusual disclosure is that he cannot produce his old commerce degree certificate, and the company relies on his affidavit for those details, which is a governance footnote investors should be aware of.​
• Shailesh Rathi (Managing Director) is an electrical engineer with around 28 years of experience in the business, also earning around ₹1.13 crore in FY25. He looks after production, purchases, and general operations and also holds a leadership role in the Bombay Metal Exchange (Gujarat chapter), which likely helps in industry networking and raw‑material market insights.​
• Shilpa Rathi (Whole‑time Director) manages HR, administration, purchases, and CSR with about 8 years of experience and received about ₹0.53 crore in FY25. She earlier settled an SEBI case related to illiquid stock options under the Settlement Scheme 2020, which is disclosed and closed, but worth noting from a compliance culture angle.​
• CFO and independent directors: CFO Naveen Pachisia has over 12 years of finance experience, including stints in overseas firms, while the company secretary has multi‑company experience in listed entities, and two independent directors bring 35-38 years of banking background. Overall, this mix of long‑term promoters plus external professionals gives some comfort, though the board is still promoter‑heavy in shareholding terms (promoters hold over 92% pre‑IPO).

Who’s Making Money from the IPO?

The OFS is 50.01 lakh shares, worth about ₹26.01 crore at the upper price band, sold equally by Shyamsundar and Shailesh Rathi. Each promoter encashes roughly ₹13 crore, and since their historical cost is only ₹0.25 per share, their notional return multiple is about 208 times, but this comes after more than four decades of building the business, multiple restructurings and share splits, so this number alone does not say much about current pricing.​

Because this is an OFS, none of this ₹26.01 crore goes into the company’s books; it is simply a shift in ownership from promoters to public investors. For investors, the key point is that most of the issue (₹274 crore) is still fresh capital going into growth and debt reduction, so promoter selling looks like partial profit‑taking rather than a full exit.​

Industry Outlook

Vidya Wires operates in the Indian winding and conductivity products industry, around 3.43 lakh MT in size, which supplies the “inner wiring” needed for motors, transformers, EVs, and power systems. Demand is driven by three big forces: India’s push for 500 GW of renewable energy capacity by 2030, heavy government capital expenditure of around ₹11.21 lakh crore budgeted for FY26, and rapid growth in EV sales, which rose about 42% in FY24.​

On the flip side, this is a competitive market with many organised and unorganised players, so price wars are common and margins are thin. Raw material prices, especially copper and aluminium, are volatile and linked to global exchanges, and players cannot always pass on every price change to customers, which can squeeze profits when prices move sharply.​

Analyst View

Vidya Wires offers a mix of attractive and uncomfortable truths: the business has delivered steady growth, improving margins, high ROE, and best‑in‑class asset productivity, and it is expanding capacity at a time when power, infra, renewables, and EVs are multi‑year themes in India. On valuation, the IPO is coming at a clear discount to peers on P/E and EV/EBITDA, despite faster profit growth, which gives some valuation comfort if execution stays on track.​

On the risk side, investors need to be okay with tight cash flows, high dependence on copper and a handful of suppliers, very fast payments to vendors, concentrated exposure to a couple of regions and sectors, and the execution risk of almost doubling capacity in a competitive industry. In simple terms, this looks less like a quick listing‑gain trade and more like a moderate‑to‑long‑term bet that management will execute the expansion, keep margins intact in a tough market, and convert today’s strong ROE into sustained free cash flow.​

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

Disclaimer

Source: Vidya Wires' 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.