ET Intelligence Group: Orient Cables, a networking and specialty cable manufacturer, plans to raise ₹320 crore through a fresh equity issue to expand capacity and repay debt. It will also raise ₹232 crore through an offer for sale. The promoter stake will fall to 82.2% after the IPO from 100%.
The company has reported growth in revenue and profit over the past two years but has not been able to defend operating margin amid higher raw-material costs. It also faces a customer concentration risk as top 10 customers account for three-fourth of the revenue. It is involved in an ongoing dispute with CK Birla group promoted Orient Electric over the use of the 'ORIENT' brand in relation to wires and cables. The litigation will be an overhang for the stock until resolved. Given these factors, investors may prefer to wait and watch the company's financial performance after listing.
Incorporated in 2005, Orient Cables caters to customers operating in telecom, smart-building automation, data centres, renewable energy, automotive and other industrial sectors. Networking cables accounted for 78% of revenue in FY26. It is among India's top four networking cable manufacturers, with a market share of 22.9% in FY26. It operates two manufacturing facilities in Bhiwadi, Rajasthan, and one in Bengaluru that commenced operations in May 2026.
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Revenue from operations grew annually 33.5% to ₹1,171.7 crore in FY26 from ₹657.8 crore in FY24. Operating margin before depreciation and amortisation (Ebitda margin) declined to 8.2% in FY26 from 8.9% in FY24, amid higher raw material costs. The margin was within the 6.1-13.9% peer range. Net profit increased to ₹53.8 crore from ₹40.1 crore over the same period. Return on equity declined to 25.8% in FY26 from 37.3% in FY24 but remained above the 13.7%-24.6% peer range. Borrowings increased sharply to ₹234.2 crore in FY26 from ₹36.7 crore in FY24 due to higher working-capital requirements to support increased sales and capacity expansion. The net debt-equity ratio rose to 0.9 from 0.2 during the period and remained above the 0.03-0.5 peer range. Operating cash flow turned negative at ₹26.6 crore in FY26 from positive ₹42.2 crore in FY24 due to a planned increase in inventory levels to meet business growth.
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At the upper price band, the company is valued at a post-issue FY26 P/E of 57.5, placing it at a premium, including Finolex Cables (31.7), Havells India (40.5) and Polycab India (46.8) while broadly in line with RR Kabel (58.2).
