Atlanta Electric

One of the leading manufacturers of power, auto and inverter duty transformers in India, well-positioned to capture the industry tailwinds.

Broad and diversified product portfolio with focussed product development tailored to meet the customer requirements.

Strong order book coupled with well diversified customer base.

Manufacturing capabilities with focus on quality and high level of regulatory compliance and health and safety measures.

Experienced management team and qualified personnel with significant industry experience.

Track record of profitability and consistent financial performance in an industry with significant entry barriers.

A significant portion of our revenue is generated from manufacturing of transformers at our facilities situated in Gujarat. As of Fiscal 2025, Fiscal 2024 and Fiscal 2023, we derived 98.88%, 96.83% and 89.97% respectively, of our revenue from manufacturing facilities situated in Gujarat. Any disruptions in the region could have a material adverse effect on our business, financial condition and results of operations.

We derive a significant portion of our revenue from the supply of transformers to utilities including state electricity companies who constituted 65.85%, 65.46% and 80.47% of our revenue from operation during Fiscal 2025, Fiscal 2024 and Fiscal 2023. Additionally, our business is largely dependent upon the demand for power generation, transmission and distribution which is closely linked to Government policies. Any economy downturn or change in government policy may have an adverse impact on our business, financial condition, cash flows and results of operations.

A significant portion of its revenue is derived from government-controlled entities, who follow the tendering process for determination of suppliers. Its may be adversely affected if the company does not succeed in all or a majority of the contracts that its tender for.

The company order book may not be representative of the company future results and its actual income may be significantly less than the estimates reflected in the company order book, which could adversely affect its business, financial condition, results of operations and prospects.

The company depends on its relationships with the company customers. A substantial portion of its revenues is dependent on its top 10 customers. As of six-month period ended September 30, 2024 and Fiscal 2024, Fiscal 2023 and Fiscal 2022, the company derived 72.89%, 64.82%, 79.87% and 85.22%, respectively, of its revenue from the company top 10 customers. The loss of any of these customers, will materially and adversely affect its revenues and profitability.

The company majorly depends on its top 10 suppliers. During the six-month period ended September 30, 2024 and in Fiscal 2024. Fiscal 2023 and Fiscal 2022, its top 10 suppliers constituted 61.18%, 62.54%, 71.93% and 73.97% of the total cost of the company raw materials purchased. Its lack of long-term supply orders of key raw materials and components from the company private suppliers increases the risk of pricing pressure for its demand of continued supply, any variation in the supply and cost of such key raw materials and traded goods could have an adverse effect on its business, financial condition and operations.

The company derives a significant portion of its revenue from the supply of power transformers which constituted 72.45%, 88.98%, 93.37% and 92.71% of the company revenue from operations during the six-month period ended September 30, 2024 and during Fiscals 2024, 2023 and 2022. A reduction in purchases of power transformers could adversely affect its business, results of operations and financial condition.

There are outstanding legal proceedings involving the Company, Subsidiaries, Promoters, and Directors which could have an adverse effect on its business, financial condition and results of operations.

Any shortages, delays or disruptions in the supply of raw materials the company use in is operating process may have a material adverse effect on the company business, financial condition, results of operations and cash flows. Further the cost of raw materials that the company use in its operating process are subject to volatility. Increases or fluctuations in raw material prices, may have a material adverse effect on its business, financial condition, results of operations and cash flows.

Its inability to effectively manage the company growth or to successfully implement its business plan and growth and expansion strategy could have an adverse effect on the company business, results of operations and financial condition.

Under utilization of its manufacturing capacities and an inability to effectively utilize the company manufacturing capacities could have an adverse effect on its business, future prospects and future financial performance.

The company innovation and validation expenditure constituted 0.01%, 0.01%, 0.01% and 0.01% of its revenue from operations in the six-month period ended September 30, 2024 and in Fiscal 2024, Fiscal 2023 and Fiscal 2022. Failure to refine and improve its innovation and validation capacities, introduce new technologies or acquire new or improved manufacturing equipment could adversely affect its business, results of operations and financial condition.

There have been certain instances of delays in payment of statutory dues by the Company in the past. Any delay in payment of statutory dues by the Company in future may result in the imposition of penalties and in turn may have a material adverse effect on its business, results of operations and financial condition.

The Company and Baoding Tianwei Baobian Electric Co. Ltd. ("Baoding") are subject to certain non-compete obligations included in the joint venture agreement dated August 18, 2015, amongst the Company, Baodings and BTWAtlanta Transformers India Private Limited ("BTW" and the agreement, the "JV Agreement"). A breach of these noncompete obligations could result in legal disputes, financial penalties, and potential claims for damages.

Apart from Dukhabandhu Rath and Milin Kaimas Mehta, none of its Directors have any prior experience of directorships in listed companies.

The company is subject to strict quality requirements, regular inspections and audits. An inability to maintain the quality of its products could lead to the cancellation of existing and future orders, recall claims or warranty claims.

There are several threats and challenges posed to the transformer industry. If any of these threats or challenges materialise it can impact the overall financial health of the business the Company and its ability to remain competitive in the market.

The company requires sizeable amounts of working capital for its continued operation and growth. The company inability to meet its working capital requirements could have a material adverse effect on the company business, results of operations and financial condition. Further, any surplus production on account of inaccurate forecasting of customer requirements and failures to manage inventory could adversely affect its business, results of operations and financial condition.

Its business operations are being conducted on premises leased from third parties. The company inability to continue operating from such premises, or to seek renewal or extension of such leases may have an adverse effect on its business, operations and financial condition.

The company inability to effectively collect receivables and default in payment from its customers could result in the reduction of the company profits and adversely affect its business, financial condition, cash flows and results of operations.

The company indebtedness and the conditions and restrictions imposed by its financing agreements and any non-compliance thereof may lead to, among others, suspension of further drawdowns, which could have an adverse effect on its business, results of operations and financial condition.

The company is dependent on a number of Key Managerial Personnel, Senior Management Personnel including its Promoters, and the loss of, or the company inability to attract or retain such persons could have an adverse effect on its business, results of operations and financial condition.

The company is unable to trace certain of its corporate filings with respect to certain corporate records and secretarial forms filled by the company with the Registrar of Companies and there are certain factual inaccuracy in its corporate filings. The company cannot assure you that no legal proceedings or regulatory actions will be initiated against the Company in the future in relation to such matters, which may adversely impact its financial condition and reputation.

If the company is unable to establish and maintain an effective internal controls and compliance system, over financial reporting, its reputation could be adversely affected.

The company is in the process of setting up and commissioning a manufacturing facility in Vadod, Gujarat, and such expansion will be subject to the risk of unanticipated delays in implementation and cost overruns.

If the compan is unable to raise additional capital or are unable to obtain financing on favourable terms or at all, its business and growth could be adversely affected.

The company has certain contingent liabilities that have not been provided for in its Restated Consolidated Financial Information, which, if they materialize, may adversely affect its business, results of operations and financial condition.

Delivery delays and poor handling by third-party logistics service providers may have an adverse effect on its business, financial condition and results of operations.

The company operates in a competitive environment and may not be able to effectively compete. The company face competition from both domestic as well as multinational corporations and its inability to compete effectively could result in the loss of customers, hence, its market share, which could have an adverse effect on the company business, results of operations, financial condition and future prospects.

Its ability to pay dividends in the future will depends on the company earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.

Cyber threats and non-compliance with and changes in privacy laws and regulations could have an adverse effect on its business, results of operations and financial condition and cash flows.

Its business is subject to strikes, work stoppages and/or increased wage demands, as well as other disputes with its employees. Such instances may cause disruptions in the company operations, which could materially adversely affect its business, financial condition and results of operations.

Any fraud, theft, or embezzlement by its employees, vendors or contractors could adversely affect the company reputation, results of operations and financial condition. Its operations and contracts are subject to anti-corruption laws and regulations, and any failures to comply with such laws and regulations could have an adverse impact on its business and reputation.

Its Promoters and Promoter Group will continue to exert substantial voting control over the Company after completion of the Offer, which may limit your ability to influence the outcome of matters submitted for approval of its shareholders.

The company has in the past entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with the equity shareholders.

Any downward revision of its credit ratings could result in an increase in the interest rates the company would pay on any new borrowings and could decrease its ability to borrow as much money as the company requires to finance its business.

Certain of its Promoters, members of Promoter Group, Directors, Key Managerial Personnel and Senior Management have interests in the Company in addition to their normal remuneration or benefits and reimbursement of expenses incurred.

The Objects of the Offer for which funds are being raised have not been appraised by any bank or financial institution. Any variations in its funding requirements and the proposed deployment of Net Proceeds may affect the company business and results of operations.

As on the date of this Draft Red Herring Prospectus the company does not have any registered trademarks. Its inability to protect any of its intellectual property rights including misappropriation, infringement or passing off of the company intellectual property or failures to obtain its trademarks could have an adverse impact on its business.

Its insurance coverage may not be sufficient or may not adequately protect the company against all material hazards, which could have an adverse effect on its business, results of operations and financial condition.

in Non-GAAP financial measures and other statistical information relating to its operations and financial performance have been included in this Draft Red Herring Prospectus. These Non-GAAP financial measures are not measures of operating performance or liquidity defined by Ind AS and may not be comparable with those presented by other companies.

Certain sections of this Draft Red Herring Prospectus disclose information from the CRISIL Report which has been prepared exclusively for the Offer and commissioned by the Company and paid for by the Company exclusively in connection with the Offer, and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.

The Company will not receive any proceeds from the Offer for Sale portion. The Selling Shareholders will receive the net proceeds from such Offer for Sale.

Its Promoter Selling Shareholder, Atlanta UHV Transformers LLP has provided a guarantee in connection with its borrowings. The company business, results of operations, cash flows and financial condition may be adversely affected by the revocation of all or any of the guarantee provided by its Promoter Selling Shareholder in connection with the borrowings.

The requirements of being a listed company may strain its resources which may have a material adverse impact on the company operations.

We have in the past entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with the equity shareholders.

One of our Corporate Promoters i.e. Atlanta UHV Transformers LLP, has common pursuits vis-�-vis our Company, which may in future lead to conflict of interest.

We depend on our relationships with our customers. A substantial portion of our revenues is dependent on our top 10 customers. As of Fiscal 2025, Fiscal 2024 and Fiscal 2023, we derived 74.21%, 64.82% and 79.87% respectively, of our revenue from our top 10 customers. The loss of any of these customers, will materially and adversely affect our revenues and profitability.

We majorly depend on our top 10 suppliers. During Fiscal 2025, Fiscal 2024 and Fiscal 2023, our top 10 suppliers constituted 61.83%, 62.54% and 71.93% of the total cost of our raw materials purchased. Our lack of long-term supply orders of key raw materials and components from our private suppliers increases the risk of pricing pressure for our demand of continued supply, any variation in the supply and cost of such key raw materials and traded goods could have an adverse effect on our business, financial condition and operations.

We derive a significant portion of our revenue from the supply of power transformers which constituted 73.60%, 88.98% and 93.37% of our revenue from operations during Fiscals 2025, 2024 and 2023. A reduction in purchases of power transformers could adversely affect our business, results of operations and financial condition.

There are outstanding legal proceedings involving our Company, Subsidiaries, Promoters, Directors, KMPs and SMPs which could have an adverse effect on our business, financial condition and results of operations.

Our financial performance currently lags behind certain listed peers and we cannot assure you that in future we may not lag behind our peers on such financial parameters.

Proforma Condensed Consolidated Financial Information included in this Red Herring Prospectus is presented for illustrative purposes only and may not accurately reflect our financial condition and results of operations.

Any shortages, delays or disruptions in the supply of raw materials we use in our operating process may have a material adverse effect on our business, financial condition, results of operations and cash flows. Further the cost of raw materials that we use in our operating process are subject to volatility. Increases or fluctuations in raw material prices, may have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our inability to effectively manage our growth or to successfully implement our business plan and growth and expansion strategy could have an adverse effect on our business, results of operations and financial condition.

Under utilization of our manufacturing capacities and an inability to effectively utilize our manufacturing capacities could have an adverse effect on our business, future prospects and future financial performance.

The calculation of our manufacturing capacity is based on assumed job volumes per month for different transformer ratings and categories. These assumptions are subject to risks such as fluctuations in market demand, supply chain constraints, production delays, and variations in project complexity.

Our profitability and earnings per share have declined in Fiscal 2024 as compared to Fiscal 2023, and similar declines in future periods may adversely impact our cash flows and operations.

Our innovation and validation expenditure constituted 0.01%, 0.01% and 0.01% of our revenue from operations in Fiscal 2025, Fiscal 2024 and Fiscal 2023. Failure to refine and improve our innovation and validation capacities, introduce new technologies or acquire new or improved manufacturing equipment could adversely affect our business, results of operations and financial condition.

There have been certain instances of delays in payment of statutory dues by our Company in the past. Any delay in payment of statutory dues by our Company in future may result in the imposition of penalties and in turn may have a material adverse effect on our business, results of operations and financial condition.

Apart from Dukhabandhu Rath and Milin Kaimas Mehta, none of our Directors have any prior experience of directorships in listed companies. This could potentially affect our corporate governance standards, investor confidence, and operational performance.

We are subject to strict quality requirements, regular inspections and audits by our customers. An inability to maintain the quality of our products could lead to the cancellation of existing and future orders, recall claims or warranty claims

Our inability to manage inventory levels effectively may adversely impact our operations, cash flows, and profitability

There are several threats and challenges posed to the transformer industry. If any of these threats or challenges materialise it can impact the overall financial health of the business our Company and its ability to remain competitive in the market.

We require sizeable amounts of working capital for our continued operation and growth. Our inability to meet our working capital requirements could have a material adverse effect on our business, results of operations and financial condition. Further, any surplus production on account of inaccurate forecasting of customer requirements and failure to manage inventory could adversely affect our business, results of operations and financial condition.

Our business operations are being conducted on premises leased from third parties. Our inability to continue operating from such premises, or to seek renewal or extension of such leases may have an adverse effect on our business, operations and financial condition.

Our inability to effectively collect receivables and default in payment from our customers could result in the reduction of our profits and adversely affect our business, financial condition, cash flows and results of operations.

Technological and quality risks inherent in transformer manufacturing, including the critical need for precision engineering and stringent quality control, may lead to costly failures and challenges in ensuring compliance with evolving technical standards.

Our indebtedness and the conditions and restrictions imposed by our financing agreements and any non-compliance thereof may lead to, among others, suspension of further drawdowns, which could have an adverse effect on our business, results of operations and financial condition.

We are dependent on a number of Key Managerial Personnel, Senior Management Personnel including our Promoters, and the loss of, or our inability to attract or retain such persons could have an adverse effect on our business, results of operations and financial condition.

We are unable to trace certain of our corporate filings with respect to certain corporate records and secretarial forms filled by us with the Registrar of Companies and there are certain factual inaccuracy in our corporate filings. We cannot assure you that no legal proceedings or regulatory actions will be initiated against our Company in the future in relation to such matters, which may adversely impact our financial condition and reputation.

If we are unable to establish and maintain an effective internal controls and compliance system, over financial reporting, our reputation could be adversely affected.

We have commenced commercial production in our manufacturing facility in Vadod, Gujarat, and an approval for consent to operate)/consolidated consent and authorization is pending and we may not be able to fully utilize the capacity of new manufacturing facilities.

If we are unable to raise additional capital or are unable to obtain financing on favourable terms or at all, our business and growth could be adversely affected.

We have certain contingent liabilities that have not been provided for in our Restated Consolidated Financial Information, which, if they materialize, may adversely affect our business, results of operations and financial condition.

Delivery delays and poor handling by third-party logistics service providers may have an adverse effect on our business, financial condition and results of operations.

We operate in a competitive environment and may not be able to effectively compete. We face competition from both domestic as well as multinational corporations and our inability to compete effectively could result in the loss of customers, hence, our market share, which could have an adverse effect on our business, results of operations, financial condition and future prospects.

Our ability to pay dividends in the future will depend on our earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of our financing arrangements.

Cyber threats and non-compliance with and changes in privacy laws and regulations could have an adverse effect on our business, results of operations and financial condition and cash flows.

Our business is subject to strikes, work stoppages and/or increased wage demands, as well as other disputes with our employees. Such instances may cause disruptions in our operations, which could materially adversely affect our business, financial condition and results of operations.

Any fraud, theft, or embezzlement by our employees, vendors or contractors could adversely affect our reputation, results of operations and financial condition. Our operations and contracts are subject to anti-corruption laws and regulations, and any failure to comply with such laws and regulations could have an adverse impact on our business and reputation.

Our Promoters and Promoter Group will continue to exert substantial voting control over our Company after completion of the Offer, which may limit your ability to influence the outcome of matters submitted for approval of our shareholders.

Any downward revision of our credit ratings could result in an increase in the interest rates we would pay on any new borrowings and could decrease our ability to borrow as much money as we require to finance our business.

Certain of our Promoters, members of Promoter Group, Directors, Key Managerial Personnel and Senior Management Personnel have interests in our Company in addition to their normal remuneration or benefits and reimbursement of expenses incurred.

The Objects of the Offer for which funds are being raised have not been appraised by any bank or financial institution. Any variations in our funding requirements and the proposed deployment of Net Proceeds may affect our business and results of operations.

We do not have any registered trademarks. Our inability to protect any of our intellectual property rights including misappropriation, infringement or passing off of our intellectual property or failure to obtain our trademarks could have an adverse impact on our business.

Our insurance coverage may not be sufficient or may not adequately protect us against all material hazards, which could have an adverse effect on our business, results of operations and financial condition.

Certain Non-GAAP financial measures and other statistical information relating to our operations and financial performance have been included in this Red Herring Prospectus. These Non-GAAP financial measures are not measures of operating performance or liquidity defined by Ind AS and may not be comparable with those presented by other companies.

Certain sections of this Red Herring Prospectus disclose information from the CRISIL Report which has been prepared exclusively for the Offer and commissioned by our Company and paid for by our Company exclusively in connection with the Offer, and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.

Our Company will not receive any proceeds from the Offer for Sale portion. The Selling Shareholders will receive the net proceeds from such Offer for Sale.

Our Promoter Selling Shareholder, Atlanta UHV Transformers LLP has provided a guarantee in connection with our borrowings. Our business, results of operations, cash flows and financial condition may be adversely affected by the revocation of all or any of the guarantee provided by our Promoter Selling Shareholder in connection with the borrowings.

The requirements of being a listed company may strain our resources which may have a material adverse impact on our operations.