INDO SMC IPO: Should You Skip or Buy?

As India’s shift toward advanced composite materials, INDO SMC positions itself as a focused composite solutions provider catering to automotive, electrical, and industrial applications.

Let’s explore this upcoming IPO further:

INDO SMC’s share price will be finalised post-allotment, while grey market cues through the INDO SMC’s IPO GMP will likely reflect market sentiment closer to listing.

The Industry Backdrop: Sheet Moulding Compound (SMC) Market

The Sheet Moulding Compound (SMC) marketplace comprises composite materials crafted from a blend of resin, filler, and chopped fibres, commonly used in automotive, construction, and electrical applications. 

SMC offers blessings inclusive of lightweight properties, excessive energy, corrosion resistance, and great design flexibility, making it a preferred alternative to metals in many commercial sectors. The growing demand for long-lasting and cost-effective materials in transportation, energy, and consumer goods is fueling SMC adoption globally.

The global Sheet Moulding Compound (SMC) Market was $ 1.72 B in 2025 and is expected to reach $ 2.22 B in 2031, growing at a CAGR of 4.36%.

Apart from that, INDO SMC is also involved in Fibre-Reinforced Polymer Composites, the market size of which is currently estimated at $79.1B in 2025, and is expected to grow at a CAGR of 5.23%. Growth drivers involve the rising demand for lightweight, corrosion-resistant parts in transportation, wind energy, and infrastructure, which continues to widen the application envelope.

Incorporated in the year 2021, in Ahmedabad, INDO SMC Limited was founded in 2021 in Gujarat, and has quickly developed into a specialised industrial solutions provider. 

The company is involved in manufacturing company operates across three key divisions: SMC (Sheet Moulding Compound) products, FRP (Fibreglass Reinforced Plastic) products, and electrical components. It manufactures energy meter enclosure boxes, SMC sheets, chequered plates, FRP gratings, pultruded products, and rods, all used in industrial and infrastructure applications. 

In addition, the company produces a wide range of electrical equipment such as HT/LT current transformers, potential transformers, CT-PT units, feeder pillars, and circuit-protection switchgear.

Let’s understand the different product categories

1. SMC Products: These are used in electrical distribution and structural applications where strength and insulation are key requirements. These products are corrosion-resistant, lightweight, and suitable for long-term use in demanding environments. Products involve:

• Distribution Box 

• Meter Box 

• Junction Box 

• Sheet 

• Chequered Plates

2. FRP Products: These are widely used across industrial and infrastructural sectors, offering a superior alternative to conventional materials. Their high strength, corrosion resistance, and dimensional stability make them suitable for heavy-duty applications. The products here involve:

• Grating 

• Pultrusion

• Current & Potential Transformers (CT/PTs

(Product-wise Revenue %)

The table shows a clear shift in the company’s revenue mix over time. Earlier, the business was dominated by SMC Boxes, contributing 78–88% in FY23–FY24. As new product lines were added and capacity expanded, revenue diversified significantly in FY25.

By 6MFY25, Bus Duct became the largest contributor at 65.12%, while SMC Box reduced to 21.86%. FRP Gratings, Pultrusion, and HTCT also grew meaningfully, reflecting the company’s transition from a single-product reliance to a more balanced, multi-segment portfolio.

The company operate through four manufacturing facilities, located in Gujarat, Maharashtra and Rajasthan. Our manufacturing facility at Ahmedabad, where we manufacture SMC and FRP products, comes equipped with a variety of machinery and other handling tools to guarantee appropriate product handling and efficient production.

Ahmedabad Unit: SMC & FRP Division

The capacity utilisation for Ahmedabad units has declined from 65–73% in FY23–FY24 to 53.67% in FY25 and 34.70% in 6MFY26, mainly due to rapid capacity expansion. Although utilisation fell, actual production volumes continued to rise, indicating that new capacity has outpaced near-term absorption but positions the unit for higher future output.

Nashik Unit: CT/PT Division

The Nashik facility shows a similar trend, with utilisation dropping from 92.86% in FY25 to 33.59% in 6MFY26 due to added capacity and new product lines like LTCT, Distribution Boxes, and Metering Cubicals. While this expansion temporarily reduced utilisation, strong HTCT performance signals rising demand, and the lower overall utilisation provides ample room for future volume growth.

Financial Performance 

The top line has given a very high growth of 19x from FY23 to FY25. While the growth in FY25 has been almost 400%. High tender value, along with capacity expansion, are the major reasons behind this massive growth. 

It is worth noting that while the 6M sales of FY26 have already crossed 80%+ of last year’s sales, the current order book value stands at ₹ 111.66 Cr, indicating potential for high sales growth in the coming time.

Margins have improved sharply, with EBITDA margins expanding from 15.8% in FY23 to 16.5% in FY25. The PAT margins have risen significantly from 6.2% in Fy23 to 11.1% in Fy25. That’s a big shift toward higher-value formulations and better cost control.

The CFO, however, has consecutively been on the negative side over the years. As per the management, the primary reason for the CFO being negative is due to increasing working capital on account of very high sales growth.

Coming to the cash conversion cycle, being at 62 days in FY25, has been on a downward trend over the years. The reason is slower growth in debtor & inventory as compared to the sales growth. 

INDO SMC has significantly reduced its debt level. D/E ratio has dropped from 8.9 in FY23 to currently at 1.05. 

ROE and ROCE stand at 74.5% and 31.4%, placing INDO SMC above the listed peers. The company has also maintained its current ratio well over the years, currently at 1.18.

INDO SMC’s promoters—Mr. Nitin Patel, Mr Neel Shah and Mr Chaitanya Patel collectively bring over 4 decades of industrial experience.

The promoters collectively lead the company by combining decades of financial management and strategic vision with specialised expertise in marketing, government tendering, and manufacturing operations.

While 2 out of 6 board members are independent directors, the governance ensures quality as the audit and remuneration committees are led by independent directors. 

From a control standpoint, the promoters hold a dominant 82.3% stake pre-issue. Post-IPO, this stake will dilute to 60.1%, but promoter influence will remain firmly intact, given their high base ownership and board control.

Peer Analysis (FY25)

(*Majority of the SMC & FPR players in India are private; the companies here are referred from the DRHP provided by INDO SMC.)

While doing peer analysis, the following observations were made:

While EBITDA margins lie in the industrial range, INDO SMC has slightly better PAT margins being at 10.6% in FY25. The debt level, being moderate at 1.0, is higher than that of the peer companies, causing ROCE to be in the peer range. The ROE, which is currently high, will decline with the addition of equity from the IPO.

Coming to the valuation part, INDO SMC has a slightly higher P/E of 14.9x, while EV/EBITDA stands at a high of 40x. However, it must be noted that the peers provided are not in the core SMC and FRP business, making relative valuation unreliable.

The company will be using the proceeds for:

• Capital expenditure (₹2,570.67 lakhs): Purchase of new plant, machinery, moulds, and lab equipment to expand capacity across Ahmedabad, Ghiloth, and Nashik units.

• Working capital needs (₹5,200 lakhs): Supporting higher operational scale, raw material procurement, and receivables across SMC, FRP, and electrical product lines.

• General corporate purposes (balance): For overall strategic and administrative requirements within SEBI’s permissible limits.

Overall, the issue aims to strengthen INDO SMC’s manufacturing capacity & day-to-day business activities.

Final Words

At Alpha Venture X Fund, we assess opportunities through our LMVT framework — Leadership, Moat, Valuation, and Tailwinds — enabling us to identify scalable businesses with durable fundamentals.

Leadership: Founder-led with strong industrial experience and equity retention, ensuring aligned execution and focus on scaling the brass components business.

Moat: Integrated manufacturing footprint backed by a high order book value. The company has also diversified its product base, giving it an edge. 

Tailwinds: Rise in use of SMC in electric components. Growth in automotive and hardware manufacturing is backed by a high number of government tenders and initiatives.

Valuation: The company is valued at a higher range, with P/E being at 14.9x; the EV/EBITDA ratio is also on the higher side, currently around 40x. 

Bottom Line: INDO SMC has a high revenue growth backed by a large order book value. The use of SMC in meters and electric components is increasing rapidly due to its high material utility.  The company is currently in its expansion phase and is expected to create value for the shareholders in the coming time. INDO SMC is a BUY for investment purposes.