Danish Power Takes Cautious Approach To IPO Despite Main Market Eligibility, Says MD Shivam Talwar

Danish Power is taking a cautious approach to its entry into the capital market, according to Shivam Talwar. The transformer manufacturer, which has seen steady growth over the past 40 years, opted to start with an small and medium enterprises listing- the biggest in the SME segment, despite being eligible for both routes.

"We believe in a steady, step-by-step approach," Talwar told NDTV Profit's Executive Editor, Sajeet Manghat, expressing hope for gradual progress.

The initial share sale of Danish Power opened for bidding on Tuesday. The IPO is an entirely fresh issue of 52.08 lakh shares worth Rs 197.90 crore. The subscription window for this public offer will remain open till Oct. 24.

The Jaipur based manufacturing company manufactures transformers, along with other divisions like panels and automation. "Both of this product division are catering to the power sector. Largely, since last few years are major focus is renewable energy sector," he said.

"As a company we have moved out of SME now, prior to that we were SME only, since we were under the 250 crore turnover range. With regards to the IPO, we are new to the capital market, as a company we are growing, we wanted to take a cautious approach, that is how we have always been. That is how our journey has always been in last 40 years," Talwar said on SME IPO.

"Most of the funds are going for capex expansion. We are expanding into 2 more manufacturing facilities in our existing areas, the balance is for working working capital," Talwar said on the purpose of the proceeds.

Danish Power operates two facilities in Jaipur—an older one in Sitapur Industrial Area and a newer facility in Mahindra World City, which began operations in November 2022. "We have taken a land parcel in the same industrial areas, for the ease of managing work process," he said on new facilities.

The company largely focuses on manufacturing transformers, especially for renewable energy. "But we do not want to stick to just one line of product range. We are already into other kind of transformers such as distribution transformers, power transformers and few more," Talwar shared. "Our capacity expansion is lined up in multiple places, power transformers is one segment, continuing on our existing transformer base for renewable energy as well as distribution transformer segment," he further said.

In terms of orderbook we are having more than Rs 370 crore orders in hand as on today, that is further planned for execution in the coming months.

With over Rs 370 crore orders in hand as of today, that are to be executed in the coming months, Danish Power is optimistic about the industry's future. "The industry outlook is positive, and we are confident in growth over the next 3-5 years," Talwar said emphasising the company's commitment to expansion and long-term growth.