SEDEMAC Mechatronics IPO is hitting the primary markets with a book-built issue size of ₹1,087 Crores. The company operates in the fast-growing control electronics and powertrain solutions segment catering to automotive and industrial applications. With strong revenue growth and sharp improvement in profitability, investors are keen to evaluate whether this IPO is worth subscribing. In this article, we will analyze SEDEMAC Mechatronics IPO details, company background, financial performance, valuation, risk factors and provide our view on whether investors should subscribe or avoid.
About SEDEMAC Mechatronics Ltd
SEDEMAC Mechatronics Limited was incorporated in 2007 and is headquartered in Pune, Maharashtra. The company specializes in designing and manufacturing:
- Powertrain controllers
- Motor control products
- Integrated starter-generator solutions
- Advanced control electronics
The company serves automotive OEMs and industrial customers, especially in the two-wheeler, three-wheeler and power equipment segments.
One of the key differentiators is its patented sensor-less motor control technology, which enables efficient and precise control without external sensors. This technology gives SEDEMAC a competitive advantage in electrification-focused markets.
With increasing EV penetration and electrification trends, SEDEMAC is well positioned to benefit from rising demand for intelligent control systems.
SEDEMAC Mechatronics IPO Issue Details
| Particulars | Details |
|---|---|
| IPO Type | Book Building Issue |
| IPO Start Date | 4-March-2026 |
| IPO End Date | 6-March-2026 |
| Issue Size | ₹1,087.45 Crores |
| Fresh Issue | Nil |
| Offer For Sale | 80,43,300 shares |
| Face Value | ₹10 per share |
| Price Band | ₹1,287 to ₹1,352 |
| Lot Size | 11 Shares |
| Listing | BSE & NSE |
| IPO Opens | March 4, 2026 |
| IPO Closes | March 6, 2026 |
| Tentative Listing Date | March 11, 2026 |
| Employee Discount | ₹128 per share |
Minimum Investment (Retail): ₹14,872 (at upper band)
sNII Minimum Investment: ₹2.08 Lakhs
bNII Minimum Investment: ₹10.11 Lakhs
Book Running Lead Managers: ICICI Securities, Avendus Capital, Axis Capital
Registrar: MUFG Intime India Pvt Ltd
IPO Reservation Structure
- QIBs – Not more than 50%
- Retail Investors – Not less than 35%
- NIIs – Not less than 15%
- Employee Reservation – Applicable
Retail investors can apply at cut-off price.
Company Financials (Restated)
Revenue & Profit Growth
SEDEMAC has shown impressive financial performance in recent years.
| Period | Total Income (₹ Cr) | PAT (₹ Cr) | EBITDA (₹ Cr) |
|---|---|---|---|
| FY23 | 429.87 | 8.57 | 54.24 |
| FY24 | 535.90 | 5.88 | 83.12 |
| FY25 | 662.54 | 47.05 | 125.07 |
| Jun 2025 | 219.96 | 17.07 | 45.69 |
Key Observations
- Revenue increased by ~24% from FY24 to FY25
- PAT jumped significantly from ₹5.88 Cr to ₹47.05 Cr
- EBITDA margin improved to 19%
- Debt reduced substantially (Debt/Equity at 0.21)
This sharp profitability improvement is a positive indicator, though investors should assess sustainability.
Key Performance Indicators (FY25)
- ROE: 22.01%
- ROCE: 33.79%
- PAT Margin: 7.15%
- EBITDA Margin: 19.00%
- Debt/Equity: 0.21
Return ratios are healthy, indicating efficient capital utilization.
Valuation Analysis
At the upper price band of ₹1,352:
- EPS (Post IPO): ₹15.61
- P/E Ratio: ~86.6x
- Market Cap: ₹5,913 Crores
- Price to Book Value: 18.89x
P/E comparison with Listed Peers (as per RHP)
- Schaeffler India Limited – Highest P/E – 64.7X
- Bosch Limited – Lowest P/E – 51.5X
- Industry Average P/E – 58.1x
Valuation Verdict
The IPO is priced at aggressive valuations compared to traditional auto ancillary companies. However, given:
- Technology focus
- High growth
- Strong return ratios
- EV exposure
The premium pricing reflects growth expectations.
Competitive Strengths
- First-to-market advantages in certain control technologies
- Strong OEM relationships
- Patented sensor-less technology
- Agility in product development
- Multi-market presence
Risk Factors
- Entire issue is Offer For Sale (no fresh funds to company)
- High valuation multiples
- Revenue concentration risk with major OEM clients
- Dependence on automotive cycle
- Margin sustainability risk
Grey Market Premium (GMP)
Latest GMP of Sedemac Mechatronics IPO indicates volatile and mixed among leading websites.
While IPOWatch indicates GMP as ₹ 130, other prominent websites like InvsestorGain indicate GMP as ₹ 70 and IPOGuru indicate the GMP as 60.
However GMP is just an nidication and should NOT be considered as sole reason to invest or avoid.
Should You Invest in SEDEMAC Mechatronics IPO?
Positive Factors
✔ Strong revenue growth
✔ Significant jump in profitability
✔ Low debt
✔ High ROCE & ROE
✔ Positioned in electrification theme
Concerns
✖ High valuation (P/E above 85x)
✖ 100% Offer For Sale
✖ Auto sector cyclicality
Should you subscribe or avoid?
SEDEMAC Mechatronics operates in a niche and high-growth technology segment within the auto electronics space. The company has delivered strong financial improvement in FY25 and maintains healthy return ratios.
However, valuations are aggressive and the IPO is entirely OFS.
My Personal View – Moderate risk investors may wait for listing or better valuations. Long-term investors with very high risk appetite can consider subscribing in moderation for potential growth story exposure.
Source: Sedemac Mechatronics Ltd DRHP.
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