Project Nexus
An established, promoter-owned manufacturer of insulated copper and aluminium winding conductors serving the electrical-equipment industry.
01Executive Summary
Project Nexus is a promoter-owned manufacturer of insulated copper and aluminium conductors, supplying transformer, motor and welding-equipment makers from a single industrial estate in western India. The company has operated since the late 1980s, and its promoters are exploring a sale of the business.
The business converts primary-metal rod and insulation materials into covered and enamelled wires and strips, and sells them business-to-business to electrical-equipment manufacturers. Its product literature describes seven insulation families and a set of in-house tests, and states that the company is certified to ISO 9001. The promoters have indicated that the proposed sale is driven by succession and personal considerations rather than any operational issue; this is a management statement.
This summary presents information drawn from audited statutory financial statements. The scope of the transaction, the structure and the price are to be set out in the process that follows execution of a non-disclosure agreement.
02Investment Highlights
Each highlight below is tied to a document. Where the support is a management statement rather than an audited fact, it is labelled.
Long operating history
The company was incorporated in the late 1980s and has been manufacturing insulated conductors for more than three decades, supplying the transformer and wider electrical-equipment industry.
Source: statutory filings; company product literatureBroad insulated-conductor range
The range spans enamelled, glass-fibre, aramid-paper, mica, paper and cotton covering on both rectangular and round copper and aluminium conductors, plus bare strips and wires, in temperature classes from 105°C to 200°C.
Source: company product literature (management statement)Top line and conversion margin both improved
Revenue grew 9.4% to ₹11.08 Cr in FY26, while revenue less materials consumed rose from 18.4% to 21.0% of revenue.
Source: audited financial statements; derivedReceivables are mostly current
Trade receivables were ₹80.5 lakh at year-end, about 26.5 days of revenue, and 59% of the balance was not yet due.
Source: audited financial statements; derivedClean statutory record in the audit report
The statutory auditor reports title deeds of immovable property held in the company's name, no undisputed statutory dues outstanding for more than six months, no default in repayment of borrowings, no fraud noticed or reported, and no disputes with the revenue authorities.
Source: statutory audit report and annexure for FY2603Business Overview
The company makes insulated conductors for equipment that carries or transforms electrical power. Its three product lines differ by conductor form and insulation.
Insulated rectangular strips
Copper and aluminium strips covered with enamel, glass fibre, aramid paper, mica, kraft paper or cotton, in single and combined coverings.
Covered strips are offered in cross-sections of 3.6 to 75 sq mm, widths of 4 to 20 mm and thicknesses of 0.90 to 6.25 mm, to Indian and IEC standards.
Insulated round wires
Enamelled round copper and aluminium wires in several insulation chemistries, across temperature classes from 105°C to 200°C, along with covered round wires.
Packaging is made to customer requirements.
Bare conductors
Annealed bare copper and aluminium strips and round wires, supplied to specification.
Bare conductors are the base material for the insulated lines.
Product specifications are taken from company product literature and are management statements.
| Item | Position | Source |
|---|---|---|
| Premises | Factory on industrial-estate land in western India; title deeds of the immovable property disclosed in the accounts are held in the company's name | Audit report |
| Net block (book value) | ₹31.81 lakh at 31 March 2026 | Audited |
| Capital expenditure | ₹2.94 lakh in FY26; ₹3.02 lakh in FY25 | Audited |
| Security | Factory land and building are mortgaged to the working-capital and term-loan lender | Audited notes |
| Used under lease | A factory shed and a machine are taken on lease from an entity under common control (₹3.60 lakh and ₹6.60 lakh in FY26) | Audited notes |
| Quality | ISO 9001 certification and twenty test types are stated in product literature; certificates to be provided | Management statement |
The milestones below are limited to dated facts in the documents and to markers whose year is not stated.
Operating model
The company buys metal rod and insulation materials, converts them into insulated conductors and sells to equipment manufacturers. Revenue is recognised on delivery, when title passes to the customer. Materials consumed were 79.0% of FY26 revenue, so the economics are driven by the margin the company earns over metal and insulation cost. Certain insulation grades are imported, according to company literature. A stage-by-stage process description, capacity by line and utilisation will be provided in the data room.
04Market & Opportunity
The company sits between primary-metal and insulation suppliers upstream and electrical-equipment manufacturers downstream, so its demand follows the build and repair of transformers, motors, welding equipment and related machinery.
Transformers
Paper-covered and glass-covered strips are core inputs to transformer windings. The company's literature says it was set up to serve this industry.
Motors and welding equipment
Enamelled round and rectangular wires are used in motor and welding-machine windings, where temperature class and insulation quality matter.
Power infrastructure and energy
Management views investment in power infrastructure and energy as a source of demand for electrical equipment, and therefore for winding conductors.
Industrial machinery and reactors
Reactors and other industrial electrical applications are listed by management as further end-uses.
No market-size, growth or share figures are included. Independent market information will be provided separately. Drivers above reflect management's description of end-uses.
05Business Model & Economics
The company earns revenue from selling insulated conductors to manufacturers, and from a small service line that appeared for the first time in FY26.
Product sales, FY26
98.2% of revenue from operations. The FY25 figure was ₹1,012.6 lakh, all from products.
Service revenue, FY26
1.8% of revenue. No service revenue was recorded in FY25. The scope of this line will be described in the data room.
Revenue less materials
The share of revenue left after materials consumed, up from 18.4% in FY25.
The table below shows how revenue from operations was composed in the two audited years.
| Revenue stream | FY25 | FY26 | FY26 share |
|---|---|---|---|
| Sale of products | 1,012.57 | 1,087.81 | 98.2% |
| Sale of services | — | 20.11 | 1.8% |
| Revenue from operations | 1,012.57 | 1,107.92 | 100.0% |
Because the business converts metal into insulated product, the cost lines show how conversion economics moved between the two years.
| Cost line | FY25 | FY26 | Change |
|---|---|---|---|
| Materials consumed | 81.6% | 79.0% | −2.6 pp |
| Employee benefit expenses | 5.3% | 8.2% | +2.8 pp |
| Other expenses | 10.6% | 10.3% | −0.3 pp |
The audited accounts do not split revenue by customer, product family or tonnage, and they carry no information on pricing mechanism, order size or repeat business. Those items are not presented in this summary and will be provided to buyers in the data room.
06Competitive Positioning
Customers can buy insulated conductors from other manufacturers, or in principle bring the covering step in-house, so the company's position rests on quality, range and service rather than on exclusivity.
The company's product literature makes the claims below. The table sets each against the evidence now available, so that buyers can see what has been demonstrated and what still has to be verified.
| Claim | Evidence available | Status |
|---|---|---|
| Quality certified to ISO 9001 | Stated in product literature | Certificate to be provided |
| Independent test-house reports | Stated in product literature | Reports to be provided |
| Twenty tests performed, including breakdown voltage, pin-hole, peel and tensile tests | Listed in product literature | Equipment and calibration records to be provided |
| Wide insulation range (seven families) | Detailed product specifications to Indian and IEC standards | Documented in literature |
| Reputed OEM customers | Stated; no customer data in this summary | To be evidenced in data room |
The company is a small participant: FY26 revenue was ₹11.08 Cr and reported EBITDA was 2.6% of revenue. Its advantage is a broad specification range with a long operating record. The documents available do not show market share, pricing power or customer switching costs.
07Financial Snapshot
The company grew revenue and improved its conversion margin in FY26, but a rise in employee cost and a larger working-capital base left profitability thin and borrowings higher.
The table below summarises the audited standalone profit and loss for the two years available. Reported EBITDA is profit before tax plus depreciation plus finance cost, and so includes other income.
| Particular | FY25 | FY26 |
|---|---|---|
| Revenue from operations | 1,012.57 | 1,107.92 |
| Revenue growth | — | 9.42% |
| Other income | 1.65 | 4.62 |
| Materials consumed | 826.29 | 875.20 |
| Employee benefit expenses | 53.82 | 90.32 |
| Other expenses | 107.25 | 114.42 |
| Reported EBITDA | 25.37 | 28.44 |
| Reported EBITDA margin | 2.51% | 2.57% |
| Depreciation | 4.91 | 4.80 |
| Finance cost | 15.03 | 17.06 |
| Profit before tax | 5.43 | 6.58 |
| PBT margin | 0.54% | 0.59% |
| Profit after tax | 4.01 | 4.42 |
Audited, year ended 31 March, standalone. FY24 figures and interim FY27 figures are not presented. Revenue growth is not shown for FY25 because FY24 is not presented.
The bridge below shows how reported EBITDA is built up from profit before tax, using audited figures only. It is not adjusted for any promoter-related or non-recurring item.
| Step | FY25 | FY26 |
|---|---|---|
| Profit before tax | 5.43 | 6.58 |
| Add: depreciation | 4.91 | 4.80 |
| Add: finance cost | 15.03 | 17.06 |
| Reported EBITDA | 25.37 | 28.44 |
The balance-sheet panel sets out the position at each year-end, including the borrowings that fund the working capital.
| Item | FY25 | FY26 |
|---|---|---|
| Net worth | 62.04 | 66.45 |
| Bank borrowings | 185.36 | 224.65 |
| Interest-free loans from directors | 0.04 | 24.03 |
| Total borrowings | 185.40 | 248.68 |
| Cash and bank balances | 0.64 | 17.97 |
| Inventories (raw materials) | 159.72 | 225.17 |
| Trade receivables | 73.39 | 80.48 |
| Trade payables | 12.87 | 10.31 |
| Advances from customers | 9.72 | 21.98 |
| Net block of property, plant and equipment | 35.14 | 31.81 |
What the numbers show
- Revenue rose 9.4%, and revenue less materials rose 2.6 percentage points to 21.0%.
- Employee cost rose 67.8% to ₹90.32 lakh, which absorbed the margin gain; reported EBITDA margin moved only from 2.51% to 2.57%.
- Finance cost rose 13.5% to ₹17.06 lakh, and reported EBITDA covered it 1.67 times.
- Working capital (inventory plus receivables less payables) rose from ₹220.2 lakh to ₹295.3 lakh, funded by about ₹39 lakh of extra bank borrowing and about ₹24 lakh of director loans.
- Inventory days on materials consumed rose from 70.6 to 93.9, while receivable days stayed at 26.5.
Weakest metric: leverage against earnings
Net borrowings of ₹230.7 lakh equal 8.1 times reported EBITDA of ₹28.4 lakh (7.3 times in FY25), and profit before tax is only 0.59% of revenue. Value in a transaction will therefore depend on assets, capacity and the earnings a buyer can underwrite, rather than on current reported profit.
08Management & Organisation
The business is run by its promoter-directors, who are also its shareholders, with family members involved in the company.
The table below describes governance roles without names.
| Role | Relationship to company | Involvement |
|---|---|---|
| Promoter-directors | Directors and shareholders; designated as key management personnel | Board-level oversight; the accounts report directors' remuneration of ₹22.56 lakh in FY26 |
| Family member in employment | Relative of a key management person | Salaried; ₹9.44 lakh in FY26 |
| Entity under common control | Associated enterprise | Provides labour, a factory shed and a machine under contract (₹31.20 lakh in total in FY26) |
The accounts are approved by the board and audited by an independent chartered accountant. The company is a private company with borrowings and turnover below the limits at which an audit committee is required. The statutory auditor changed during FY26, and the audit report states that the outgoing auditor raised no issues, objections or concerns.
Organisation depth cannot be assessed from the audited accounts, which show employee cost of ₹90.32 lakh in FY26 but not headcount, roles or tenure. The company also uses contract labour. A department-wise structure and key-employee details will be provided in the data room.
Key-person dependence
The promoters run the business and are the sellers, so the extent of day-to-day dependence on them, and the transition period they will offer, are open points for buyers. Management will address these in the process.
09M&A Proposition
The promoters are exploring a sale of the business to a buyer who can take over an established conductor manufacturer. The precise perimeter, structure and price are not fixed in this summary.
What is on offer
A sale of the manufacturing business, which is held in a standalone private company. Whether the transaction is a share sale, a business transfer or an asset sale, and how land, building, plant, working capital, borrowings and cash are treated, will be defined with interested parties after an NDA. No valuation or asking price is stated here.
Why now
Revenue growth
FY26 revenue of ₹11.08 Cr against ₹10.13 Cr in FY25.
Gross conversion margin
Revenue less materials moved from 18.4% to 21.0% of revenue.
Receivable days
Unchanged between FY25 and FY26, with 59% of FY26 receivables not yet due.
Buyer profile
The business is most relevant to winding-wire and cable manufacturers wanting added capacity or range, to electrical-equipment groups wanting to integrate a conductor supplier, and to investors prepared to back a conductor business with an operating improvement plan.
Proposed structure
No transaction terms have been confirmed. Stake, structure, promoter transition, consideration mechanics and timeline will be agreed with the promoters and shared with interested parties in the process.
Value creation
- Capacity: management states that installed capacity exceeds current output on both metals; utilisation by line is to be verified.
- Margin: revenue less materials rose 2.6 percentage points in FY26 while employee cost rose faster than revenue, so cost control on the labour base is a lever.
- Balance sheet: inventory rose 41% in FY26; a tighter stock policy would reduce the working capital and interest burden.
- Financing: finance cost was 1.5% of revenue; a stronger parent could lower the cost of funds.
10Risks & Mitigants
The points below are those a buyer's diligence team is likely to raise. Where an item is unresolved, it is stated as such.
11Process
The process moves from confidentiality to full information, then to meetings and offers.
Contact the adviser
CA Dhiraj Ostwal — Transaction Advisory
Email: dhiraj.ostwal@gmail.com
Phone: +91-70200 45454
Reference: Project Nexus, SEL-002
Disclaimer. This Confidential Information Summary has been prepared by the adviser from information provided by the company and its management, including audited financial statements. It is circulated before any non-disclosure agreement and is for the sole use of the recipient to decide whether to seek further information. It is not an offer, invitation or solicitation, and creates no obligation on the company, its shareholders or the adviser. The adviser has not independently verified all information, and statements labelled as management statements are those of management. No representation or warranty, express or implied, is given as to accuracy or completeness, and recipients must conduct their own due diligence and take their own professional advice. Figures are in Indian rupees; one lakh is one hundred thousand and one crore is ten million. Figures for FY25 and FY26 are audited standalone figures; derived ratios are computed from them. Interim and forecast information is not included. The company, the adviser and their respective advisers accept no liability arising from use of this document. This summary remains confidential and may not be copied or passed on without the adviser's written consent.