Systematic Industries
- Systematic Industries is coming out with an initial public offering (IPO) of 59,28,000 equity shares in a price band of Rs 185-195 per equity share.
- The issue will open on September 24, 2025 and will close on September 26, 2025.
- The shares will be listed on SME Platform of BSE.
- The face value of the share is Rs 10 and is priced 18.50 times of its face value on the lower side and 19.50 times on the higher side.
- Book running lead manager to the issue is Hem Securities.
- Compliance Officer for the issue is Dimple Lalwani.
Profile of the company
Incorporated in year 2000, the company is an ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 certified company operating in the steel wire industry and engaged in the business of manufacturing and supplying of various steel wires and cables, catering to the needs of power transmission, infrastructure, telecommunications, agro-based and allied industries. Its product portfolio includes Steel wires such as Carbon steel wire (MS Wire), High carbon wire (HC Wire), Mild Steel (MS) Wire, Galvanized Iron (GI) Wire, Cable Armour Wire, Aluminium conductor steel-reinforced cable (ACSR Core wire), Aluminium Clad Steel (ACS) Wire etc. along with Optical Ground Wires (OPGW) and Optical Fibre Cable (OFC), which has electrical and mechanical properties that are suitable for applications in power generation, data transmission and distribution, thus, ensuring efficiency and reliability across various aforementioned industries.
The company started its operations with a factory situated at Village Sayli, Silvassa in Dadra & Nagar Haveli and Daman & Diu, whereby it manufactured and supplied Steel Wires. Gradually, the company expanded its verticals by venturing into manufacturing of various other Steel wire products such as MS Wire, GI Wire, ACS Wire etc.
Its factories have a combined installed capacity of 1,00,000 MTPA for producing various steel wires such as galvanized wire, wires for power industries, high and low carbon steel wires etc. and are equipped with various machines such as Wire Drawing Machine, GI Plant, Flattering Machine, Fiber coloring Machine, Buffering Machine, SZ standing Machine, Sheathing Machine, Wire Drawing Machine, ACS Rewinding Machine, Lath Machine, Drilling Machine, High carbon machine, Torsion machine etc. It has its own Research & Development department that adheres to safety and quality standards as required by the customers. Its emphasis on R&D enables it to constantly develop quality products, offering technological & economical solutions to customers.
Proceed is being used for:
- Repayment and/or pre-payment, in full or part, of borrowing availed by the company
- General corporate purpose
Industry overview
The steel wire industry is essential across various sectors owing to its flexible and robust characteristics. Made of a mix of steel alloys including iron, carbon, manganese, and silicon, steel wire finds wide applications in construction, infrastructure, automotive, aerospace, and mining because it has high tensile strength, flexibility, resistance to wear, shock, and corrosion. The properties make the wire ropes, strands, wire mesh, netting, and reinforcing concrete structures necessary. As the global construction industry continues to grow, the need for steel wire is expected to rise. The demand for products such as wire ropes and steel mesh is particularly prominent in construction and mining sectors.
The market size of Steel Wire Industry grew at a CAGR of 7.6% from CY19 to CY24 reaching an estimated market size of $113.4 billion by CY24. It is further projected to grow at a CAGR of 6% from CY24 to CY30 reaching market size of $161.2 billion by CY30. Rising demand in the main industries like construction, automotive, and mining have been fuelling the growth of the steel wire market. With rapid urbanisation and growing investments in infrastructure, the need for steel wire for construction projects including bridges, roads, and electrical grids has surged.
Stainless Steel wire holds the majority share in steel wire exports from India. Steel wire exports grew at a CAGR of 9.3% from FY19 to FY24. As of FY24, the top three major export destinations of India are UAE, United Kingdom, and the United States of America with export shares of 12.6%, 12.1%, and 9.6% respectively.
Pros and strengths
Established factories with equipped machines and processes and research and development: Systematic Industries is one of the established companies in the manufacture and supplies of range of products, particularly in the fields of Power & Transmission, Infrastructure, Automobile, Agriculture and Telecom. The company has multiple factories at different locations with capacity of 1,00,000 MTPA across various products, industries and regions. The company also manufactures Optical Ground Wire (OPGW - 6000 KM Annual Capacity), Optic fibre cables (48000 KM Annual Capacity), galvanized wire, wires for power industries, high and low carbon steel wires etc. It operates from its four factories of which three units are situated in Union Territory of Dadra & Nagar Haveli and Daman & Diu, India and one unit is situated in Valsad, Gujarat. It has comprehensive in-house manufacturing capabilities along with own Research & Development Department and in house testing lab for quality testing.
Focus on Quality, Environment, Health and Safety: Quality plays an important role in the success of its business. It has taken membership of Green Gene Enviro Protection & Infrastructure for solid Waste Disposal Facility. It adheres to quality standards as prescribed by its customers to meet the desired requirement; hence it gets repetitive orders from its customers and also attract new customers, thus, building reputation, brand image and gaining competitive advantage over its competitors. It has a quality control system that ensures consistent product quality, efficient resource allocation, minimizing waste and maximizing productivity. It performs quality control checks that begin upon the intake of raw materials and continue at each individual stage of the manufacturing process.
Revenue from multiple geographies: Its product portfolio and quality assurance has helped it establishes strong relationships with its major customers. The company has diversified revenue from multiple geographical locations across India and a portion of revenue from outside India from more than 30 countries such as Sri Lanka, Japan, Bhutan, Canada, Brazil etc. It has generated around 92.85%, 90.54%, and 92.19% of its total revenue from domestic sales for the fiscal year ending 2025, 2024 and 2023 respectively and generated around 7.15%, 9.46% and 7.81% of its total revenue from export sales for the for the fiscal year ending 2025, 2024 and 2023 respectively. Currently, it markets its products to more than 30 countries and gradually it intends to expand its business operations to other geographical locations as well. This consistent growth underscores its commitment to exploring new opportunities and strengthening its global reach.
Risks and concerns
Depends on limited number of customers: Notable portion of its revenues has been dependent upon few customers. There is no guarantee that it will retain the business of its existing customers or maintain the current level of business with each of these customers. The company’s revenue from its top 10 customers accounted for 34.39% in FY 2025, 39.51% in FY 2024, and 43.46% in FY 2023. Its reliance on a selected group of customers for its business exposes it to risks, that may include, but are not limited to, reductions, delays or cancellation of orders from its customers, failure to negotiate favourable terms or the loss of these customers, all of which could affect financial position and future prospects of the company.
Dependence upon transportation services: It does not have an in-house transportation facility and it relies on third party transportation and other logistic facilities at every stage of its business activity including for procurement of products from its suppliers and for transportation of its finished products to its customers. For this purpose, it hires services of transportation companies. However, it has not entered into any definitive agreements with any third-party transport service providers and engages them on a need basis. Additionally, availability of transportation solutions in the markets it operates in is typically fragmented. The cost of its goods carried by such third-party transporters is typically much higher than the consideration paid for transportation, due to which it may be difficult for it to recover compensation for damaged, delayed or lost goods. The aggregate freight costs incurred during the Fiscals 2025, 2024 and 2023 was Rs 1754.80 lakh, Rs 1583.61 lakh and Rs 1403.76 lakh aggregating 4.13%, 4.45% and 4.48% of its total expenses, respectively.
Geographical constrains: It generates a notable portion of its turnover from the State of Gujarat. For the financial year ended March 31, 2025, March 31, 2024 and March 31, 2023, it derived notables’ portion of its revenue from the state of Gujarat i.e. 25.83%, 24.93% and 25.50% of total revenue from operations, respectively and it derived 77.85%, 75.72% and 81.34% of total revenue from operations from top-5 states in India, respectively, for financial year ended March 31, 2025, March 31, 2024 and March 31, 2023. It carries its entire operations from factories located in the state of Gujarat & Union Territory of Dadra & Nagar Haveli and Daman & Diu. Due to the geographical concentration of its factories in these locations, its operations are prone to local, regional and environmental factors. Any materially adverse social, political or economic development, civil disruptions, or changes in the policies of the state/central government or state or local governments, may require a modification of its business strategy, or require it to incur significant capital expenditure or suspend its operations.
Outlook
The company is primarily engaged in the business of manufacturing and supplying of various steel wires and cables, catering to the needs of power transmission, infrastructure, telecommunications, agro-based and allied industries. The product portfolio includes Steel wires such as MS Wire, GI Wire, Galvasys Wire, ACSR Core wire, ACS Wire etc. along with OPGW and OFC, which has electrical and mechanical properties that are suitable for applications in power generation, data transmission and distribution. On the concern side, the company is dependent on limited number of suppliers, within limited geographical locations for procurement of raw materials. Any delay, interruption or reduction in the supply of raw materials required for its products may adversely affect its business, results of operations, cash flows and financial condition. Further, its business operations are concentrated in certain geographical regions and it generates major portion of turnover from these regions or nearby regions only. Any adverse developments affecting its operations in these regions could have an adverse impact on its revenue and results of operations.
The company is coming out with a maiden IPO of 59,28,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 185-195 per equity share. The aggregate size of the offer is around Rs 109.67 crore to Rs 115.60 crore based on lower and upper price band respectively. On performance front, the net revenue from operation of the company increased to Rs 44,651.15 lakh in financial year 2024-25 as against Rs 37,030.70 lakh in the Financial Year 2023-24 representing an increase of 20.58%. The main reason for the increase in revenue is due to increase in sale of various steel wires. The company reported Restated profit after tax for the financial year 2024-25 of Rs 1,846.15 lakh in comparison to Rs 1,240.51 lakh in the financial year 2023-24. The increase of 48.82% is due to increase in revenue from operations of the company and other factors.
Meanwhile, its wide spread presence and scale of operations allows it to increasingly focus on branding and promotional activities to enhance its visibility in steel wires & cable industry. It is enhancing brand awareness and customer loyalty through its promotional and marketing efforts. Its selling & distribution expenses including sales promotion & advertisement expenses, commission, brokerage & discount expenses and exhibition expenses were Rs 116.37 lakh, Rs 79.99 lakh and Rs 95.29 lakh respectively for the financial years ending 2025, 2024 and 2023.
