Accord Transformer IPO opens with strong GMP buzz and ₹25.59 crore issue

The initial public offering of Accord Transformer & Switchgear Limited is set to open for subscription on February 23, 2026. The company is launching a Book Built Issue worth ₹25.59 crore, entirely comprising a fresh issue of shares. The IPO will close on February 25, 2026, and the shares are expected to list on the NSE SME platform on or about March 2, 2026.

The IPO has generated early interest in the market, largely due to a strong Grey Market Premium (GMP) indication. However, as with all SME IPOs, investors are advised to carefully evaluate the fundamentals before making an investment decision.

This article explains the company profile, IPO structure, financial performance, valuation metrics, GMP outlook, risks, and what investors should consider before applying.

About Accord Transformer & Switchgear Limited

Accord Transformer & Switchgear Limited is engaged in the manufacturing and supply of electrical equipment used in power transmission and distribution systems. The company produces:

• Power transformers

• Switchgear panels

• Compact substations

• Other related distribution equipment

These products are widely used in:

• Industrial plants

• Infrastructure projects

• Power utilities

• Commercial establishments

The company operates in the power transmission and distribution segment, which plays a crucial role in India’s infrastructure growth story. With rising demand for electricity, renewable energy integration, and government push for electrification, the sector is witnessing steady expansion.

Accord Transformer earns revenue from manufacturing, engineering, and supplying electrical equipment for various projects. Its business depends significantly on infrastructure development, power sector expansion, and industrial growth.

IPO Structure and Key Details

The IPO of Accord Transformer & Switchgear is structured as a Book Built Issue.

Issue Highlights

• Issue Size: ₹25.59 crore

• Fresh Issue: 0.56 crore equity shares

• Price Band: ₹43 to ₹46 per share

• Market Capitalisation at ₹46: ₹94.64 crore

• Lot Size: 3,000 shares

• Exchange: NSE SME

Important Dates

• IPO Opening Date: February 23, 2026

• IPO Closing Date: February 25, 2026

• Allotment Finalisation: February 26, 2026

• Tentative Listing Date: March 2, 2026

Since this is an SME IPO, it will be listed on the NSE SME platform, which typically has lower liquidity compared to mainboard listings.

Minimum Investment Requirement

One of the most important aspects for retail investors is the minimum investment size.

• Retail Investors: Minimum 2 lots

  • 6,000 shares

  • ₹2,76,000 at upper price band

• High Net Worth Individuals (HNIs): Minimum 3 lots

  • 9,000 shares

  • ₹4,14,000

The relatively high minimum investment makes it accessible primarily to investors with larger capital.

Company Financial Performance

For FY25, the company reported:

• Revenue from Operations: ₹7,90,225.33 thousand

  • Equivalent to approximately ₹79.02 crore

At the upper price band of ₹46 per share, the company’s market capitalisation stands at ₹94.64 crore.

Price-to-Sales Ratio

Using FY25 revenue:

• ₹94.64 crore ÷ ₹79.02 crore

• Approximate Price-to-Sales (P/S) ratio: 1.2x

A P/S ratio of 1.2x for an SME manufacturing company appears moderate. However, investors must also examine:

• Net profit margins

• Return on capital employed

• Debt levels

• Working capital requirements

• Order book strength

Without strong profitability and margin stability, revenue growth alone may not justify valuation.

Grey Market Premium Analysis

The reported Grey Market Premium (GMP) is ₹153.

If we add GMP to the upper price band:

• ₹46 + ₹153 = ₹199 (indicative)

This suggests strong unofficial demand in the grey market.

However, investors must understand:

• GMP is unofficial and unregulated

• No real price discovery happens in the grey market

• GMP can change rapidly

• It does not guarantee listing gains

SME IPOs often see volatile listing performance. Some deliver sharp gains, while others correct after initial enthusiasm fades.

Therefore, GMP should only be considered as a sentiment indicator, not as a guarantee of returns.

Sector Outlook: Power Transmission and Distribution

India’s power sector is undergoing major transformation. Key drivers include:

• Rapid urbanisation

• Renewable energy expansion

• Smart grid development

• Electrification of rural areas

• Infrastructure upgrades

The government’s focus on strengthening transmission and distribution networks creates long-term opportunities for companies manufacturing transformers and switchgear.

Electrical equipment manufacturers benefit from:

• Industrial capex cycles

• Infrastructure investments

• Government tenders

• Renewable integration projects

However, the sector also faces challenges such as:

• Raw material price volatility

• Competitive bidding pressure

• Delayed payments from clients

• High working capital requirements

Key Risks Investors Should Consider

While the IPO has attracted attention, it is important to understand the risks.

1. SME Liquidity Risk

Shares listed on SME platforms typically have lower trading volumes. This can lead to:

• Higher price volatility

• Difficulty in exiting large positions

2. Working Capital Intensive Business

Manufacturing electrical equipment requires significant working capital. Delayed payments can affect cash flows.

3. Raw Material Price Fluctuation

Prices of copper, steel, and other metals can impact margins.

4. Dependence on Infrastructure Spending

A slowdown in infrastructure projects may impact revenue growth.

5. Competitive Industry

The transformer and switchgear segment has multiple established players.

Use of IPO Proceeds

Since the issue consists entirely of a fresh issue, funds raised will likely be used for:

• Working capital requirements

• Business expansion

• Strengthening production capacity

• General corporate purposes

Fresh capital improves the company’s balance sheet and supports growth initiatives.

Valuation Perspective

At a market cap of ₹94.64 crore and revenue of ₹79.02 crore, the company is valued at around 1.2 times sales.

For comparison:

• Larger listed electrical equipment companies often trade at higher multiples due to scale and profitability.

• SME companies usually trade at lower multiples due to size and liquidity risks.

Investors must compare:

• Profitability margins

• Growth rate

• Industry position

Before concluding whether the IPO is attractively priced.

Should Retail Investors Apply?

The answer depends on investor profile.

Suitable For:

• Investors comfortable with SME risk

• Those seeking potential listing gains

• High-risk appetite investors

Not Suitable For:

• Conservative investors

• Those needing high liquidity

• Short-term traders without risk tolerance

Given the high minimum investment of ₹2.76 lakh, retail participation requires significant capital commitment.

Market Sentiment and IPO Environment

The SME IPO segment has seen mixed trends in recent months. Some IPOs have delivered strong listing gains due to limited supply and high demand, while others have corrected after listing.

Market sentiment around infrastructure and power sector stocks remains positive due to government spending and industrial expansion.

However, overall market conditions, interest rate outlook, and global factors also influence IPO performance.

Listing Expectations

If current GMP trends sustain, there could be strong listing interest. But it is important to remember:

• GMP can fall before listing

• Market volatility can impact listing day performance

• SME stocks often show sharp price swings

Investors should prepare for volatility rather than assume guaranteed gains.

Final Thoughts

The Accord Transformer & Switchgear IPO presents an opportunity to invest in a growing electrical equipment manufacturer operating in the power transmission and distribution sector.

Key positives include:

• Growing infrastructure demand

• Moderate valuation based on sales

• Fresh issue improving capital base

• Strong GMP sentiment

Key concerns include:

• SME liquidity risks

• High minimum investment

• Industry competition

• Working capital intensity

Investors should carefully review the company’s financial statements, risk factors, and long-term prospects before making an investment decision.

While the IPO has created buzz due to strong GMP indications, disciplined investing requires focus on fundamentals rather than market speculation.

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