German electricity grid equipment manufacturer SGB-SMIT has entered early-stage IPO discussions with bankers, potentially valuing the century-old transformer maker at over €4bn if listed in Germany. The Bavaria-based company, owned by US private equity group One Equity Partners, supplies critical power infrastructure to utilities and grid operators across the US, Netherlands, China, India and France.

Surging demand for AI-linked assets has intensified investor appetite for companies supporting massive power consumption. Data centre expansion and grid modernization efforts have created a favorable market for power equipment manufacturers. This trend follows recent successful listings including Innio's IPO that promises substantial returns for Advent International.

One Equity acquired SGB-SMIT from BC Partners in 2017, and the firm is now exploring exit opportunities amid strong market conditions. Other private equity investors including TDR and I Squared Capital also anticipate significant profits from their stakes in power-focused companies like Aggreko.

The potential listing adds to an expected uptick in European IPOs, which has been partially driven by defence sector offerings. If completed as early as next year, it would mark another milestone in the AI-driven capital markets rally that has already seen SpaceX and upcoming listings from OpenAI and Anthropic.