Shivalic Power Control Ltd || Don’t Get Shocked: Shivalic Power Control IPO’s Hidden Risks

Shivalic Power Control Ltd Introduction

Shivalic Power Control Ltd, a trailblazer in the realm of electrical control systems. Since their inception in 2004, they have been the driving force behind seamless industrial operations and enhanced equipment safety. Here’s what you need to know about them

Brief about Company Shivalic Power Control Ltd

Summary of the business of Shivalic Power Control Ltd

Company was originally incorporated on October 08, 2004 as a Private Limited Company as “Shivalic Power Control Private Limited”. Shivalic Power Control Limited is an ISO-certified LT and HT electric panel manufacturer with an operating history of 20 years. We are a technology-driven company with a strong focus on quality, design and product development, which has allowed us to develop products suited to our customers’ requirements. Our 1,25,000 Sq. Feet of in-house manufacturing unit allowed us to manufacture a diversified range of electric panels such as PCC Panels, IMCC Panels, Smart Panels, MCC Panels, DG synchronisation panels, Outdoor panels, HT Panels up to 33KV, VFD Panels, Power Distribution Boards, Bus Duct and LT & HT APFC Panels. We are authorised by industry leaders such as L&T, Siemens, Schneider Electric and TDK to manufacture fully type-tested panels as per IEC 61439 – 1&2 ,IEC 61641, IS1893 which we serve to more than 15+ industrial Sectors in India as well as in outside India, viz, Nepal, Bangladesh, African countries such as Uganda, Kenya, Nigeria, Algeria.

promoter Mr. Amit Kanwar Jindal started Shivalic in 2004 with Low Voltage Panel assembly with a vision to constantly provide quality products by adapting to the latest technologies. During this journey of two decades, Shivalic has served more than 500+ Clients in different industries such as Sugar, Papers, Cement, Steel, FMCG, Automobile etc. Our clientele in this industry includes Hewlett Packard, DCM Shriram, Rungta Mines, Reliance Cement, Kalpataru Power Transmission, Jindal Steel & Power, JSW, Bikaji Foods, Dabur, Radico, Naini Paper, J K Paper, Orient Papers, J K Cement, Escorts, Yamaha Motors and many more. We do not limit ourselves to traditional application of panels, our sales & marketing team is always keen to identify new opportunities where we can supply our panels.

Company is buying most of the materials directly from industrial giants like L&T, Siemens, ABB, C&S, EPCOS.

So far, company is serving traditional industries like FMCG, Metal, Cement, Automobile etc. From the last year, with a team of expert engineers, designers and other supporting staff, we have diversified our business and started serving to data centre industry also.

History Shivalic Power Control Ltd

Here’s a summary of the history of Shivalic Power Control:

• Founded in 2004: The company began in 2004 as a private limited company under the name “Shivalic Power Control Private Limited”
• Focus on Quality and Innovation: From the start, Shivalic emphasized quality, design and development of new products to meet customer needs
• Product Range Expansion: They started by manufacturing low-tension (LT) and high-tension (HT) electric panels and have grown their product range to include various control panels, power distribution boards, and more
• Clientèle Growth: Shivalic has served over 500 clients across various industries in India and abroad, including Hewlett Packard, Reliance Cement, and JSW
• International Reach: Besides the Indian market, they also export to Nepal, Bangladesh, and African countries
• Recent Developments: They secured a significant order for a data center project in Bhubaneshwar in November 2023
• Public Offering: In November 2023, Shivalic Power Control Limited filed for an initial public offering (IPO)

Promoters & Board of Directors of Shivalic Power Control Ltd

The promoters of Company are Mr. Amit Kanwar Jindal and Mrs. Sapna Jindal

Paramount Forge: A Risky Bet in a Volatile Market

Board of Directors

Share Holding pattern of Shivalic Power Control Ltd

Qualitative Factors of Shivalic Power Control Ltd

• Experienced Promoter and management team with strong industry expertise and successful track record.
• Modern facility set up in Faridabad equipped with advance technology.
• Strong financial position, reducing leverage & increasing returns to scales
• Strategic Partnerships with world leading OEMs for component procurement
• Highly passionate & focused on Quality Assurance, backed by ISO certifications
• Marquee clientele

Strategy of Shivalic Power Control Ltd

• Seizing Opportunities in the Data Center Boom: A Gateway for Electric Panel Manufacturers
• Leverage EPC Projects for Electric Panel Manufacturing:
  • SJAS Super Specialty Hospital
  • Jupiter Laminators Private Limited
  • Bluecraft Agro Private Limited
  • Continental Engines Private Limited
  • Hi-Lex India Private Limited
  • Roquette Riddhi Siddhi Private Limited
  • SMCC Construction (I) Limited
• Intend for Increasing Global presence

Industry Outlook

The India – electrical equipment market size is estimated to grow at a CAGR of 11.68% between 2022 and 2027. The market size is forecast to increase by USD 52,975.77 million. The growth of the market depends on several factors such as an increase in the number of residential and commercial building projects, a rise in power generation from renewable energy sources, and an increase in investments in the power sector.

As per Frost & Sullivan’s report, the LV switchgear market, which was approximately INR 12,000 Crores in CY2022, is expected to grow at a CAGR of more than 5% over the next five years.

“The LV switchgear in India is increasingly turning intelligent or smart, which allows for predictive maintenance. This helps gain process visibility, provides real-time data, and considerably reduces failures and downtime. What has also come to the fore is that innovation in LV switchgear is primarily in terms of aesthetics and enhanced features (e.g., improving serviceability) rather than a drastic technological change in product.”

Challenge- Threat from cyberattacks in power generation industry:
The number of cyber-attacks, such as those by hackers and cybercriminals, is increasing in India. In this market, electrical systems are controlled and monitored by IT systems and infrastructure, such as control and data acquisition (SCADA) systems and automated production controls. In cyber-attacks, hackers can attack computer systems to cause infrastructure damage and power supply breakdown, resulting in power outages. Moreover, false data injection (FDI) is a common type of cyber-attack in power systems. A successful FDI attack on a computer system can cause an imbalance between power consumption and power generation in the network. Such actions can damage equipment, and continued failure can lead to widespread power outages. Hence, the threat posed by cyberattacks on the power industry could impede the growth of the market during the forecast period.

India Switchgear (LV, MV, HV) Market Overview, 2027-28
As per Frost & Sullivan’s report, the LV switchgear market, which was approximately INR 12,000 Crores in CY2022, is expected to grow at a CAGR of more than 5% over the next five years.
“The LV switchgear in India is increasingly turning intelligent or smart, which allows for predictive maintenance. This helps gain process visibility, provides real-time data, and considerably reduces failures and downtime. What has also come to the fore is that innovation in LV switchgear is primarily in terms of aesthetics and enhanced features (e.g., improving serviceability) rather than a drastic technological change in product.”

Some of the notable insights are:

Pelatro IPO: Is the Aggressive Hype Over?

• Capital Expenditure in India:
  • Capital Expenditure substantially augments the economy’s productive capacity and exerts a more profound influence on long-term growth and productivity in contrast to revenue expenditure. Over the past few years, the public capex has remained strong mainly led by the Centre. The government’s steadfast commitment to capex is reflected in its budgetary priorities. Notably, the share of capex within the total expenditure has undergone a substantial increase, rising from 12.1% in FY21 to 22.2% in the budget estimate for FY24. CareEdge Ratings’ does a deep dive into how India’s capex story is unfolding.
• Infrastructure development:
  • The Indian government has invested heavily in infrastructure development, including constructing new or augmenting existing airports, metro stations, and electricity distribution networks. This is expected to drive growth in the LV switchgear market.
• Renewable energy:
  • India makes significant investments in renewable energy, including wind and solar power. This is expected to drive demand for LV switchgear, as renewable energy projects require specialized switchgear.
• Industrial expansion:
  • India is experiencing significant industrial expansion, particularly in manufacturing and construction. This drives demand for LV switchgear, as these industries require reliable electrical systems.
• Implementation of safety mandates:
  • Implementing key safety mandates across multiple key states drives demand for a select type of LV switchgear products.
• Digitalization:
  • Digitalization of LV switchgear is also an important trend with strong business potential. Energy-intensive industries, such as steel, cement, paper, etc., are exploring the implementation of digital switchgears for better visibility of the processes, which can lead to energy conservation measures.

Business Data of Shivalic Power Control Ltd

WHAT IS ELECTRIC PANEL?
Electrical Panel is an electrical distribution board that receives power from generator or transformer and distributes the same to various electronic devices and distribution boards. It gives an operator full access to the whole electric system of a specific location within one large electric board, and with that access, operators can monitor and maintain the entire electric power system. An electrical panel provides the fastest and easiest method of troubleshooting and clearing issues, and multiple protection devices within an electrical panel give safety to the whole power system of a specific power system.
Applications include:
1.Simplifying complex electrical control
2.Enhanced Productivity through Better Machine Tuning
3.Improved security, reducing human induced accidents
4.Reduced Downtime with intelligent PLCs

LT AND HT PANEL:
LT (Low Tension) Panel and HT (High Tension) Panel are both electrical distribution panels used to control and distribute electrical power in different voltage ranges

LT – Low Tension Panel:

• LT Panels are designed to distribute electrical power at low voltage levels, typically up to 1000 volts.
• They are commonly used everywhere in residential, commercial, and industrial applications.
• LT Panels distribute power to various loads such as lighting, motors and other electrical equipment.
• These panels often incorporate circuit breakers, fuses, meters, and other protective devices to ensure safety and efficient power distribution at lower voltages.

HT – High Tension Panel:

• HT Panels are designed to distribute electrical power at high voltage levels, typically above 1000 volts.
• They are primarily used in industrial settings, power plants, substations, and large commercial installations.
• HT Panels receive power from the electrical grid or a transformer and distribute it to various loads at higher voltages.

Products of Shivalic Power Control Ltd

• PCC and Double Busbar PCC Panels
• MCC & IMCC Panels
• Ethernet Ready PCC Panel
• AC Drive Panel:
• Automatic Change Over Panel
• APFC Panel
• DG Synchronizing Panel
• HT Panel

Product wise break-up of Shivalic Power Control Ltd

(Amount in Lakhs)

Revenue contribution from Geography presence of Shivalic Power Control Ltd

(Amount in Lakhs)

Top 5 States Revenue Bifurcation during the last 3 years are as under of Shivalic Power Control Ltd

Deccan Transcon Leasing IPO: Is This IPO a Alienated Dud?

(Amount in Lakhs)

Customer dependency

(Amount in Lakhs)

Supplier dependency

(Amount in Lakhs)

Machinery/Plants/Factory

Manufacturing facility is located at Plot No. 72, Sector 68, IMT Faridabad, Ballabgarh, Haryana – 121004, India, which is only 800 meters away from Delhi – Mumbai Express Way having a production capacity of 10,000 Verticals per annum. Our manufacturing & assembly line is well-equipped with the latest machines procured from renowned brands like Trumpf, Ermaksan, Gasprini, Amada, LV-HD machines and Bosch.

Capacity Utilisation

(Capacity in “Units”)

Exclusive Partners

• Siemens
• L&T Electrical & Automation
• Schneider Electric
• TDK

Peer company comparison

(Rs. In Lakhs)

Business risk factors

• Top ten clients contribute approximately 40.77 %, 53.02%, 56.78% and 82.97% of our revenues from operations for the period ended December 31, 2023 and for the year ended March 31, 2023, March 31, 2022 and March 31, 2021 respectively. Any loss of business from one or more of them may adversely affect our revenues and profitability
• Company had negative cash flows in the past years, details of which are given below. Sustained negative cash flow could impact our growth and business.
• rely on a limited number of suppliers for sourcing our raw materials. Furthermore, we have not entered into any long-term agreement or contract of supply of raw materials and consequently are exposed to price and supply fluctuations for our raw materials
• Majority of state wise revenues from operations for the last 3 years and for the stub period is dependent majorly on Haryana. Any adverse developments affecting our operations in these states could have an adverse impact on our revenue and results of operations.

Financials

Key Financial Ratios

(Figure in Lakhs)

Osel Devices: A Blinded Cautionary Tale for IPO Investors

Balance Sheet

Profit & Loss

(Amount in Lakhs)

Cash Flow

Company had negative cash flows in the past years, details of which are given below. Sustained negative cash flow could impact our growth and business.

(Amount in Lacs)

SWOT

• Strengths:
  • Shivalic Power Control is committed to innovation and quality, setting new standards in power control.
  • Their products, such as wall-mounted distribution boards and automatic power factor correction panels, enhance power system efficiency.
  • They have a strong market presence and expertise in their industry.
• Weaknesses:
  • Specific weaknesses are not readily available in the provided information. However, further research into financial statements, operational challenges, or customer feedback may reveal potential weaknesses.
• Opportunities:
  • The growing demand for power control solutions due to industrial expansion and infrastructure development presents an opportunity for Shivalic.
  • Expanding into new markets or diversifying their product portfolio could be advantageous.
• Threats:
  • Intense competition from other power control companies may pose a threat.
  • Economic fluctuations, regulatory changes, or supply chain disruptions could impact their business.

IPO Details

Shivalic Power Control IPO Details

Why need of funds

(₹ in Lakhs)

Litigation involved

Please refer DRHP page no.s 218-225

Gray Market Premium

Latest posts

• Paramount Forge: A Risky Bet in a Volatile Market
• Pelatro IPO: Is the Aggressive Hype Over?
• Deccan Transcon Leasing IPO: Is This IPO a Alienated Dud?
• Osel Devices: A Blinded Cautionary Tale for IPO Investors
• Northern Arc Capital IPO: A Risky Bet?

Categories

• Blog
• Daily News
• Fundamentals
• Investment Plans
• IPO
• Mutual Funds
• NFO