TMC Transformers India Limited

Promoter Group entity has overlapping business objects

Promoter Group entity United Insulation Industries is authorised by its constitutional documents to undertake activities similar to those of the Company, creating potential competition or conflict risk. A non-compete agreement dated June 12, 2026 is disclosed, but common interests and related-party dealings remain relevant.

Conflict of interest · material · p.60

Railway-sector revenue concentration

Railways contributed Rs 1,760.49 million or 42.19% of Fiscal 2026 revenue, versus 28.41% in Fiscal 2025 and 30.66% in Fiscal 2024. A reduction in railway procurement, qualification status, tender activity or customer orders can materially reduce revenue because alternative sectors may not offset the shortfall promptly.

Customer and sector concentration · material · p.28

Top-ten customer concentration

Top 10 customers generated 74.65% of Fiscal 2026 revenue, up from 62.17% and 60.72% in the prior two Fiscals. There are no long-term purchase commitments and loss of a major customer, order reduction, delayed payment or pricing pressure could materially affect revenue and margins.

Customer concentration · material · p.29

Order book is not guaranteed revenue

The Rs 6,734.18 million order book can be delayed, modified, cancelled, suspended, executed across multiple periods or subject to revised specifications and schedules. It therefore does not guarantee the amount or timing of future revenue or profit.

Execution · material · p.35

Greenfield EHV expansion carries execution and commissioning risk

The Company plans a 78,000 MVA greenfield EHV facility requiring external contractors, machinery vendors, approvals, installation, testing and commissioning. Delays, design changes, cost inflation, vendor underperformance, approval delays, imported-equipment issues or failure of the facility to perform as expected could materially impair the expansion plan.

Expansion execution · material · p.40

Related-party transactions create conflict risk

Related-party expense transactions were Rs 312.25 million in Fiscal 2026 and Rs 260.09 million in Fiscal 2025, equal to 10.71% and 12.38% of total expenses. The prospectus states that Fiscal 2026 and Fiscal 2025 expense transactions with related parties exceeded 10% of aggregate transactions of similar nature. Even where certified as arm's length, the Company acknowledges that more favourable terms with unrelated parties cannot be assured.

Governance · material · p.54

Revenue Dependency on Railways Sector

The company derives a substantial portion of its revenue from the sale of transformers in the railways sector, with significant dependencies on top customers and suppliers.

high · material

Pending Tax Proceedings

The company has pending tax proceedings and outstanding demands against it and its directors.

high · material

Raw Material Dependency

The company is significantly dependent on imported raw materials, particularly CRGO electrical steel and CTC copper.

high · material

Cash Flow Challenges

The company has experienced negative cash flow from operating activities.

high · material

International Operations Risks

The company is exposed to risks associated with international operations and export revenues.

high · material

Order Book Uncertainty

The company has a substantial order book that may not be indicative of future revenue.

high · material

Regulatory Compliance Risks

The company has faced delays in payments of statutory dues and has filed applications for non-compliance with certain provisions under the Companies Act, 2013.

high · material

Promoter and management dependence

The prospectus identifies the Company's success as dependent on its Promoter, Directors, KMP and Senior Management. Loss of key technical or managerial personnel could disrupt customer relationships, design and manufacturing capability and execution of the planned expansion.

Key person · material · p.65

Working-capital intensity has risen sharply

Net working capital increased from Rs 159.64 million in Fiscal 2024 to Rs 440.32 million in Fiscal 2025 and Rs 1,551.84 million in Fiscal 2026, while net working capital days rose from 24 to 59 to 136. Expansion into higher-MVA transformers can further lengthen production and payment cycles and increase cash tied up in inventory and receivables.

Liquidity and cash flow · material · p.41

Capacity utilisation must support operating leverage

Transformer Manufacturing Facility utilisation was 57.88%, 35.38% and 28.53% in Fiscals 2026, 2025 and 2024. The new facility will sharply expand capacity, increasing the importance of sustaining order inflows and utilisation to absorb fixed costs.

Manufacturing utilisation · material · p.37

Promoter retains significant control

Promoter and Promoter Group collectively hold 66,560,778 Equity Shares, representing 96.57% of issued, subscribed and paid-up equity capital and 92.68% on a fully diluted basis before the Issue. Significant control will continue after listing and could create conflicts with public shareholders.

Ownership concentration · material · p.73

Testing, certification and approved-vendor status are critical

Products are subject to stringent technical testing, including short-circuit testing, and several target markets require approved-vendor status. Failure to meet specifications, pass tests or retain certifications can suspend eligibility for tenders and materially restrict market access.

Qualification and product quality · material · p.46

Raw-material import and commodity exposure

Transformer manufacturing depends heavily on CRGO electrical steel and CTC copper. The Company has meaningful import exposure and shortages, tariffs, geopolitical disruption, foreign-exchange moves or commodity-price increases can raise costs or interrupt production.

Raw materials · material · p.48

Statutory compliance history includes delays and adjudication matters

The prospectus discloses past delays in statutory-dues payments, suo-moto adjudication applications for certain Companies Act non-compliances, CARO observations and a Cost Audit Branch show-cause matter. Although remedial steps were taken for disclosed matters, recurrence can lead to penalties, prosecution or management distraction.

Regulatory compliance · material · p.31

Supplier concentration without long-term supply arrangements

Top 10 suppliers represented 79.92% of Fiscal 2026 cost of goods sold compared with 63.32% in Fiscal 2025 and 53.38% in Fiscal 2024. The Company has no long-term supply arrangements, leaving production exposed to supplier discontinuity, pricing changes and inability to source alternatives quickly.

Supply chain · material · p.30

Rs 763.87 million of cash inflow from issue of compulsory convertible preference shares was recognised within borrowings

Rs 763.87 million of cash inflow from issue of compulsory convertible preference shares was recognised within borrowings because the CCPS were classified as a financial liability under Ind AS 109.

accounting · moderate · p.318

Acquisition of Anshuman Transpower System Private Limited was a common-control business combination accounted for using

Acquisition of Anshuman Transpower System Private Limited was a common-control business combination accounted for using pooling of interests under Appendix C to Ind AS 103. The consolidated financial statements were retrospectively restated from the earliest period presented as if the combination had occurred from that date. Purchase consideration was Rs 287.74 million, settled entirely through issuance of equity shares and without cash outflow.

accounting · moderate · p.362

Events after the reporting date included approval and issuance mechanics for 68,074,025 bonus shares, for which weighted

Events after the reporting date included approval and issuance mechanics for 68,074,025 bonus shares, for which weighted-average shares used in EPS were retrospectively adjusted for all periods, and a private placement of 833,333 equity shares that raised Rs 500 million and was not adjusted into the March 31, 2026 financial statements because it occurred after the reporting date.

accounting · moderate · p.368

Governance requires monitoring because of concentrated Promoter ownership, material related-party dealings, overlapping

Governance requires monitoring because of concentrated Promoter ownership, material related-party dealings, overlapping interests with a Promoter Group entity, prior compliance delays and limited listed-company board experience.

analysis · moderate · p.54

The 78,000 MVA EHV expansion is much larger than the Company's historical 8,500 MVA installed transformer capacity at Ma

The 78,000 MVA EHV expansion is much larger than the Company's historical 8,500 MVA installed transformer capacity at March 31, 2026. The Company had not placed orders for Rs 1,297.95 million of proposed machinery capex at the DRHP date, creating meaningful execution, qualification, utilisation and funding risk.

analysis · moderate · p.37

Supplier concentration is also high: top 10 suppliers represented 79.92% of Fiscal 2026 cost of goods sold, without long

Supplier concentration is also high: top 10 suppliers represented 79.92% of Fiscal 2026 cost of goods sold, without long-term supply arrangements.

analysis · moderate · p.30

Customer concentration is substantial and increasing, with the top 10 customers contributing 74.65% of Fiscal 2026 reven

Customer concentration is substantial and increasing, with the top 10 customers contributing 74.65% of Fiscal 2026 revenue and railways contributing 42.19%.

analysis · moderate · p.28

Cash conversion deteriorated sharply: Fiscal 2026 operating cash flow was negative Rs 98.19 million despite PAT of Rs 95

Cash conversion deteriorated sharply: Fiscal 2026 operating cash flow was negative Rs 98.19 million despite PAT of Rs 957.12 million, while net working capital days increased to 136 from 59 in Fiscal 2025 and 24 in Fiscal 2024.

analysis · moderate · p.42

Valuation cannot yet be assessed from the DRHP because the Price Band, Issue Price, Issue share count and post-Issue sha

Valuation cannot yet be assessed from the DRHP because the Price Band, Issue Price, Issue share count and post-Issue share capital are not disclosed.

analysis · moderate · p.3

The special-purpose consolidated financial statements for the three Fiscals carried an Emphasis of Matter regarding thei

The special-purpose consolidated financial statements for the three Fiscals carried an Emphasis of Matter regarding their basis of preparation, including accounting for the common-control acquisition of Anshuman and retrospective restatement, and stating that the statements were prepared solely for the IPO restatement exercise. The auditors stated that their opinion was not modified in respect of this matter.

audit · moderate · p.34

CARO observations included delayed statutory payments and short delays in repayment of a vehicle loan. The disclosed loa

CARO observations included delayed statutory payments and short delays in repayment of a vehicle loan. The disclosed loan defaults were subsequently satisfied along with penal interest and the statutory-dues matters identified as remedied were paid before adoption of the Restated Consolidated Financial Information.

audit · moderate · p.365

Emphasis of Matter Paragraph regarding the basis of preparation related to the acquisition of Anshuman Transpower System

Emphasis of Matter Paragraph regarding the basis of preparation related to the acquisition of Anshuman Transpower Systems Private Limited under common control.

audit · moderate

There were no audit qualifications in the auditors reports for the financial years ended March 31, 2026, March 31, 2025

There were no audit qualifications in the auditors reports for the financial years ended March 31, 2026, March 31, 2025 and March 31, 2024.

audit · moderate · p.365

Limited listed-company board experience

The prospectus states that a majority of Directors do not have prior directorship experience in listed companies. The Company will face materially greater reporting, governance, internal-control and investor-relations requirements after listing.

Governance transition · moderate · p.68

No formal foreign-currency hedging policy

The Company is exposed primarily to US Dollar and Euro movements through exports, imported raw materials and imported property, plant and equipment. The prospectus states that because current exposure is considered limited, there is no formal policy to hedge foreign-currency risk.

Market risk · moderate · p.58

Seasonality and project timing can distort reported periods

Between 59.65% and 69.74% of total annual MVA sales occurred in the second half of each of the last three Fiscals. Tender issuance, inspection, dispatch and project milestones can therefore cause material quarter-to-quarter and half-year variability.

Revenue volatility · moderate · p.63