INDO SMC IPO

INDO SMC claims to have a diversified product range spanning SMC-based electricity metre boxes, FRP products, and high- and low-tension electrical components. This range enables the company to serve multiple sectors, including power distribution, construction, industrial, and infrastructure, thereby reducing its dependence on a single product segment.

The company claims to operate advanced manufacturing facilities equipped for the production of SMC, FRP, and electrical components. These facilities are stated to support large-scale manufacturing, consistent quality output, and the ability to scale production for bulk or new orders.

INDO SMC claims to have secured an order book of Rs 283.19 crore as of November 30, 2025, reflecting ongoing demand across sectors. The company states that it independently executes contracts and serves a diversified customer base, which supports revenue visibility and operational continuity.

The company is ISO 9001:2015 certified for its quality management systems and ISO 14001:2015 certified for its environmental management systems.

The company has witnessed a consistent increase in its revenue from operations and profit after tax (PAT). Revenue from operations increased from Rs 7.29 crore in FY23 to Rs 28.03 crore in FY24 and Rs 138.69 crore in FY25. PAT increased from Rs 0.45 crore in FY23 to Rs 3.00 crore in FY24 and Rs 15.44 crore in FY25.

Raw material consumption accounted for 82.12 percent, 71.32 percent, 88.56 percent, and 106.36 percent of revenue from operations for the period ended September 30, 2025 and FY25, FY24, and FY23, respectively. Any increase in raw material prices, supply disruptions, import restrictions, or inability to pass on higher input costs, given the absence of long-term supply contracts, can negatively impact the company’s margins, cash flows, and results of operations.

A significant portion of the company’s orders is received through competitive bidding, where awards depend on meeting qualification criteria and, after pre-qualification, often on quoted prices. The company incurs time and costs to prepare bids, and tender processes, especially government tenders, can face delays or changes in criteria. Failure to qualify, win bids, or delays in tendering and contract awards can hurt revenue visibility, cash flows, and results of operations.

The top 10 suppliers accounted for Rs 85.31 crore (92.31 percent) of the company’s total raw material consumed for the period ended September 30, 2025; Rs 31.78 crore (32.14 percent) in FY25; Rs 16.21 crore (65.29 percent) in FY24 and Rs 5.73 crore (73.80 percent) in FY23. Since there are no long-term supply contracts, any disruption, delay, or quality issues from these suppliers, or difficulty in sourcing alternatives on time, can hurt production schedules, deliveries, margins, and results of operations.

The company and its promoter are involved in certain ongoing legal proceedings. The company’s business prospects could be hit in case of adverse judgments in any of these cases.

The company reported negative cash flow from operating activities amounting to Rs 7.04 crore for the period ended September 30, 2025; Rs 13.70 crore in FY25; Rs 5.78 crore in FY24 and Rs 2.90 crore in FY23. The negative cash flows from operating activities in September 2025, FY25 and FY24 indicate that its core operations are not consistently generating cash. Only FY23 shows a positive operating cash flow, pointing to deterioration in operational cash efficiency over time. Additionally, negative cash flow from investing activities amounted to Rs 4.25 crore for the period ended September 30, 2025; Rs 17 crore in FY25; Rs 2.44 crore in FY24 and Rs 3.40 crore in FY23. Strong positive cash flows from financing activities across all periods indicate that the company is funding its cash requirements largely through borrowings and other financing sources rather than internal accruals. Furthermore, the company reported a net decrease in cash and cash equivalents amounting to Rs 0.54 crore in FY23. The overall cash flow pattern reflects pressure on operating cash generation and a dependence on financing activities to support operations and investments.

For the period ended September 30, 2025, about 90.20 percent of total revenue was generated from customers located in Gujarat and Maharashtra. This concentration makes the company’s performance closely linked to economic and industrial conditions in these two states. Any adverse political, social, economic, or regulatory developments, natural calamities, labour unrest, or industrial slowdown in Gujarat and/or Maharashtra could hurt the company’s revenue and profits.

The top 10 customers accounted for Rs 93.34 crore (82.94 percent) of the company’s revenue for the period ended September 30, 2025; Rs 91.18 crore (65.75 percent) in FY25; Rs 21.28 crore (75.92 percent) in FY24 and Rs 6.42 crore (87.97 percent) in FY23. Any loss of key customers, changes in purchasing terms, payment delays, or order cancellations could negatively impact the company’s revenue, working capital, and operating performance.

The company was incorporated on September 27, 2021 and therefore has a relatively limited operating history compared to more established peers. This short track record may limit its ability to accurately forecast long-term performance, manage business cycles, or withstand prolonged adverse market conditions. Any adverse inability to scale operations sustainably or respond effectively to industry downturns could negatively impact the company’s business and financial condition.

As of September 30, 2025, the company had outstanding financial indebtedness of Rs 49.35 crore. Failure to service or repay these loans could harm the company’s operations and financial position.