The Orient Cables IPO Explained

Saad (0:01)

Hello folks, you're tuned in to Finshots Daily. I'm Saad. If you're new here, welcome. If you're returning, welcome back.

In today's episode, we explain the Orient Cables IPO, which opens for subscription today.

Before we head to the story, here's a quick word from Team Ditto. We're hosting a free two-day insurance masterclass that helps you build real financial security by understanding health and life insurance the right way. Right from understanding how to protect your family, choosing the right cover amount, and knowing what truly matters during a claim, to how hospitals process claims, the mistakes bios usually make, and how to choose a policy that won't disappoint you when you need it the most. We will explain it all in plain language. Head to the link in the description and save your spot. Now to the story. In 1848, gold was discovered at Sutter's Mill in California. Within months, the news spread across the country. Soon, thousands of people abandoned their homes and jobs, boarded trains and headed west with the same dream, find gold and come back wealthy.

Of course, there was no guarantee that they would actually find any, but there was one thing that prospectors could be counted on to do. Keep digging.

And digging meant they needed supplies. Picks, shovels, boots, tents, clothes and everything else required to survive while searching for gold. That created a rather unusual opportunity. You didn't necessarily have to find gold to make money from the gold rush. You could make money by selling tools to everyone looking for it. So as long as the gold rush continued, there would be demand for the picks and shovels they needed. That idea has since become a popular way of looking at investment opportunities. When an industry is booming, the most interesting businesses aren't always the ones chasing the boom itself, but the ones supplying the picks and shovels that make it possible. And something similar is happening with the AI and data center boom. As companies pour billions into data centers, they need an entire infrastructure layer before all that computing can actually happen. Servers need to connect to each other, to storage, and to the outside world.

That means growing demand for a rather unglamorous, but essential cables that carry all the data. That means a whole ecosystem of companies sell the cables and equipment needed to make it happen, and one of those companies is Orient Cables Limited. They manufacture a range of cables and related products that sit across different parts of this infrastructure stack. Its portfolio spans networking cables and solutions, specialty power and optical fiber cables, wire and cable harnesses, EV assemblies, and other allied products such as keystone jacks. But not all of these businesses are equally important to Orient. Its networking cables and solutions business has emerged as the company's largest revenue contributor, accounting for over 78 percent of its revenue from operations in FY26.

Orient Cables has also built a good presence within the supply chain. The company ranks among the top four networking cable manufacturers in India, increasing its domestic market share from around 16 percent in FY22 to an estimated 22.9 percent in FY26. And now the company is becoming public to the markets. The price band is from 258 rupees to 272 rupees, and will be open for subscription from 25th September, 2026, that's today, to 29th September, 2026, and is expected to list on 5th October. The IPO comes at a time when the company is trying to move beyond its traditional business and capture opportunities in its faster growing segments. While standard networking cables generate most of its revenue, the company has started expanding into higher value products mentioned above. In FY26, sales from its specialty power and optical fibers divisions increased sharply due to demand across telecom, broadband, and renewable energy infrastructure. The company has also introduced irradiated specialty cables, electric vehicle charging assemblies, solar junction boxes, and tethered drone cables. However, the high revenue growth does not automatically produce high net income. While revenue has increased 42%, its profit after tax or PAT has remained nearly flat, rising just 0.5% to 53.56 crore rupees. This divergence, folks, highlights the entire sector's economics. You see, cable manufacturing depends heavily on raw commodities, including copper, polyethylene, and polyvinyl chloride or PVC compounds. In fact, in FY26, raw material expenses alone cost the company 958.32 crore rupees, amounting to about 82% of the revenue.

By comparison, all other operational overheads combined accounted for less than 12% of revenue. Another thing is that when global prices for copper or petroleum-linked plastics rise, the company cannot always transfer these costs immediately towards corporate clients. This input sensitivity directly compressed operating profitability. The company's EBITDA margin declined from 10.17% in the 2022 financial year to 8.23% in 2026, before recovering to 11.22% in the first quarter of the 2027 financial year. At the same time, financing costs increased because the business took on short-term debt to fund the working capital required for its sales expansion. In fact, this working capital requirement explains why the IPO is structurally important for the company's balance sheet.