Smarten Power Systems, a prominent player in the power backup and solar energy sector, is set to launch its Initial Public Offering (IPO) from July 7 to July 9, 2025. The company, headquartered in Gurgaon, Haryana, is offering shares priced at INR 100 each, with a total issue size of INR 50 crore. This includes a fresh issue of INR 40 crore and an Offer for Sale (OFS) of INR 10 crore. The IPO will be listed on the NSE Emerge platform.
Smarten Power’s strategic pricing, set at a P/E ratio of 11.75x, is approximately 70% cheaper than its sector peers, making it an attractive proposition for investors. The company’s comprehensive product range and significant export reach are key factors contributing to its investment appeal.
Business Overview and Market Position
Founded in 2014, Smarten Power Systems specializes in the design and manufacture of advanced power backup solutions and solar power products. Its offerings include Home UPS systems, solar inverters, solar power conditioning units (PCUs), solar charge controllers, and battery storage systems. The company also trades in solar panels and batteries, leveraging a robust pan-India distributor network and exporting to over 17 countries, including regions in the Middle East, Africa, and South Asia.
As of FY25, Smarten Power reported that 66.51% of its revenue was generated from domestic sales, while exports accounted for 33.49%. The company is operational in 23 Indian states and two union territories, with a current manufacturing capacity of approximately 600 units per day. This capacity is expected to double following the commissioning of a new plant in Jhajjar, Haryana.
Industry Outlook and Growth Potential
India’s power backup and solar energy industry is experiencing rapid transformation, driven by strong policy support and increasing demand. According to the Ministry of New and Renewable Energy (MNRE), India had installed over 81 GW of solar capacity by March 2025, with off-grid and rooftop segments contributing more than 12 GW. The government’s National Solar Mission aims to achieve over 280 GW of solar capacity by 2030.
Key industry growth indicators include:
- Solar Rooftop Growth: A CAGR of 18% is expected from FY24 to FY28, according to ICRA estimates.
- Power Backup Market Expansion: Projected to grow at a CAGR of 10–12% over the next five years, driven by erratic grid power in Tier II/III cities and MSME demand.
- Local Manufacturing Boost: PLI Schemes and import duties on Chinese products are encouraging domestic manufacturing of solar equipment.
- MSME Solar Adoption: Expected to rise due to increasing power tariffs and cost parity in rooftop systems.
Smarten Power is well-positioned to capitalize on these trends with its solar hybrid products and expansion plans at the Jhajjar facility, enhancing its cost competitiveness and market reach.
Business Model and Strategic Insights
Smarten Power employs a hybrid B2B2C model, integrating in-house manufacturing with a multi-tier distribution network. This approach spans various product categories in power electronics and solar energy, offering comprehensive solutions from DC to AC conversion, storage, and energy efficiency.
Key Components of Smarten’s Business Model
- Value Chain Integration: From design to delivery, Smarten manages product conceptualization, design, manufacturing, testing, and packaging in-house, ensuring quality control and customization capabilities.
- Product-Market Fit: The company targets power-deficient regions and backup requirements in Tier II-IV cities, offering mid-premium priced products focused on value engineering and durability.
- Distribution Channels: Smarten utilizes a wholesale B2B network with over 1,000 channel partners, a distributor-led model for exports, and direct-to-consumer sales via e-commerce platforms.
- Customer Profile: Includes retail consumers, SMEs, MSMEs, project installers, NGOs, and government schemes.
- After-Sales Support: Franchise-operated service centers and centralized spare supply ensure customer satisfaction and product longevity.
- Strategic Levers: The new Jhajjar plant is expected to double output, reduce lead times, and improve margins. Branding investments and potential technology tie-ups are also on the horizon.
While Smarten’s business model is designed for scalability and geographic reach, challenges such as working capital management, dependency on Chinese components, and the need for institutional contracts remain.
Financial Performance and Valuation
Smarten Power’s financials indicate robust growth and improving profitability. Between FY23 and FY25, net income more than tripled, reflecting the company’s strong operational performance. Key financial metrics include:
Revenue (FY25): INR 201.75 crore
Net Income (FY25): INR 12.77 crore
EPS (FY25): INR 8.51
PE Ratio: 11.75
RONW (FY25): 33.14%
Debt/Equity: 0.43
The IPO proceeds will primarily address working capital requirements and partial debt repayment, enhancing liquidity for expanded operations post-Jhajjar facility commissioning.
Risks and Challenges
Despite its promising growth trajectory, Smarten Power faces several risks. The company derives a significant portion of its revenue from Haryana and Uttar Pradesh, making it vulnerable to regional disruptions. Additionally, the top 10 customers contribute a substantial share of revenue, posing a risk if any orders are lost or reduced.
Working capital needs have increased, and the company plans to allocate INR 22 crore from IPO proceeds to address these requirements. Moreover, the underutilization of current manufacturing capacity and reliance on exports, particularly to Nigeria, present potential challenges.
Conclusion and Investor Considerations
Smarten Power emerges as a high-growth entity within the power electronics sector, backed by a solid export portfolio and diversified product range. Its strategic expansion, sound profitability, and attractive valuation make it a compelling investment opportunity. However, successful scale-up execution, working capital discipline, and export cycle stabilization will be critical post-listing.
For more updates on the IPO, including GMP, SEBI approval, and live subscription details, stay tuned to IPO Central.
