SEDEMAC Mechatronics IPO: Things to Know from the RHP Before ₹1,087 Crore Offer Opens

1️⃣ IPO Structure

The entire issue is an Offer for Sale (OFS) of 80,43,300 equity shares with a face value of ₹10 each. Since it is a pure OFS, the company will not receive any proceeds from the IPO.

2️⃣ Lead Managers & Registrar

The book-running lead managers to the issue are:

> ICICI Securities Limited

> Avendus Capital Private Limited

> Axis Capital Limited

The registrar to the issue is MUFG Intime India Private Limited.

3️⃣ Selling Shareholders

The OFS includes shares sold by promoter shareholders such as Manish Sharma and Ashwini Amit Dixit. Investor shareholders participating in the sale include Xponentia Opportunities Fund II, NRJN Family Trust, and Mace Private Limited.

4️⃣ Purpose of the Offer

As this is a complete OFS, the company will not receive fresh capital. The primary objective is to:

> Provide liquidity to existing shareholders

> Achieve listing benefits

> Enhance brand visibility and corporate profile

5️⃣ Business Overview

SEDEMAC Mechatronics is engaged in supplying control-intensive electronic control units (ECUs) to original equipment manufacturers (OEMs) in mobility and industrial sectors across India, the US, and Europe.

The company focuses on application-critical electronic systems used in automotive and industrial applications.

6️⃣ Financial Performance

Revenue from operations has shown steady growth:

FY23: ₹4,230.28 million

FY24: ₹5,306.53 million

FY25: ₹6,583.63 million

9M FY26: ₹7,706.65 million

Profit trend:

FY23: ₹85.73 million

FY24: ₹58.78 million

FY25: ₹470.45 million

9M FY26: ₹714.98 million

Profitability improved significantly in FY25 and FY26 compared to earlier years.

7️⃣ Promoter Holding

Promoters include:

Shashikanth Suryanarayanan

Amit Arun Dixit

Manish Sharma

Anaykumar Avinash Joshi

As per the RHP, promoters collectively hold 22.26% of the fully diluted equity share capital.

8️⃣ Board & Management

The company’s board consists of six directors:

> Three executive directors

> Three non-executive directors

> Two independent directors

Poyni Bhatt serves as the Chairperson and is an independent director. Shashikanth Suryanarayanan is the Managing Director.

Some listed peers in the segment include:

> Bosch Limited

> ZF Commercial Vehicle Control Systems India Limited

> Sona BLW Precision Forgings Limited

> Schaeffler India Limited

Peer comparison will be important for valuation assessment.

Key Risk Factors – SEDEMAC Mechatronics IPO

Investors should carefully review the following risks highlighted in the Red Herring Prospectus (RHP) of SEDEMAC Mechatronics Limited before making an investment decision.

1️⃣ High Revenue Dependence on a Single Customer

The company has significant revenue concentration, particularly from TVS Motor Company Limited, which contributed:

79.05% in FY23

83.46% in FY24

80.46% in FY25

75.48% in 9M FY26

Any reduction in demand, pricing pressure, or change in commercial terms from this key customer could materially impact revenue, profitability, and cash flows.

2️⃣ Dependence on Two Manufacturing Facilities

As of the RHP date, the company relies entirely on its two production facilities located in Pune, Maharashtra. Any disruption due to operational issues, regulatory actions, natural events, or regional disturbances could affect production and financial performance.

3️⃣ Exposure to Evolving and Stage-Specific Business Risks

The company operates in technology-intensive and application-critical segments. Changes in customer requirements, product life cycles, or industry transitions may adversely affect operations and growth prospects.

4️⃣ High Dependence on Mobility Segment

A substantial portion of revenue comes from the mobility segment, contributing:

80.37% in FY23

85.64% in FY24

85.69% in FY25

84.63% in 9M FY26

Any slowdown, cyclical downturn, or regulatory changes affecting the automotive industry could materially impact business performance.

5️⃣ Exposure to Industrial (Genset) Demand

The industrial segment, particularly gensets, contributed between 14% and 19% of revenues across recent financial periods. A sustained decline in genset demand or shift toward alternative energy solutions may negatively affect growth.

6️⃣ Counterparty Credit Risk

Trade receivables from top 10 customers have increased significantly:

₹131.19 million (FY23)

₹257.12 million (FY24)

₹412.01 million (FY25)

₹1,384.06 million (9M FY26)

Delays or defaults in payments could impact working capital, liquidity, and cash flows.

7️⃣ Supplier Concentration Risk

The company depends heavily on its top 10 suppliers, who accounted for approximately 63–66% of total purchases across recent periods. Any disruption in supply, pricing volatility, or inability to procure raw materials may affect production and margins

8️⃣ Dependence on Imports from China

Critical components such as semiconductors and printed circuit boards are imported from the People’s Republic of China. This exposes the company to geopolitical tensions, trade restrictions, currency fluctuations, and supply chain disruptions.

9️⃣ Auditor Observations

The statutory auditors’ reports for FY24 and FY25, including examination of restated financial statements, contain certain observations under applicable audit rules. If similar remarks continue in future audit reports, it may adversely impact investor confidence and financial perception.

Investor Note

The above risks highlight key operational and financial exposures. Investors should:

Assess customer concentration risk carefully

Evaluate segment diversification strategy

Consider supply chain and geopolitical exposure

Review financial statement notes in detail

Before applying, it is advisable to read the full Risk Factors section in the RHP.

Disclosure:

This article is based on information available in the Red Herring Prospectus (RHP) of SEDEMAC Mechatronics Limited and other publicly available sources. The summary provided above is for informational and educational purposes only and does not constitute investment advice, recommendation, or an offer to buy or sell securities. Investors are advised to read the full RHP, including the detailed Risk Factors section, and consult their financial advisors before making any investment decision. Investment in equity markets is subject to market risks.