Adroit Industries (India) Limited IPO

01At a glance

What the company does: makes propeller shafts and driveline components at three Madhya Pradesh facilities: Dewas (forging), Pithampur (machining and assembly, through the subsidiary Adroit Driveshafts) and Sanwer (RHP p.86, RHP p.188).

Who pays it: mainly overseas customers: sales to the United States were ₹651.78 million in FY26, 53.76% of export revenue and about 51.28% of product sales (RHP p.37). The top five customers were 48.91% of FY26 product sales (RHP p.339).

Why it is raising money: ₹199.07 million for machinery at Dewas, ₹439.56 million for machinery at the subsidiary's Pithampur plant and ₹241.19 million to repay the subsidiary's borrowings, plus general corporate purposes (RHP p.189).

How fast it has grown: revenue from ₹1,245.28 million in FY24 to ₹1,399.43 million in FY26, about 6.0% a year; profit from ₹145.27 million to ₹261.58 million, about 34.2% a year (our arithmetic, RHP p.119).

The one thing to understand: profit grew much faster than sales, and half of product sales go to one country. Sales to the United States were 51.28% of FY26 product sales, and the company had no hedging in place in FY24 to FY26 (RHP p.37).

02The business, in plain words

Adroit machines and assembles the shafts that carry power from a vehicle's gearbox to its axle, and related driveline parts, and ships most of them abroad (RHP p.188, RHP p.37).

A vehicle or aftermarket customer abroad needs driveshafts → it places purchase orders with Adroit → Adroit makes them at Dewas or Pithampur and exports them → the customer pays in foreign currency.

The company does not usually have long-term agreements with minimum purchase commitments; sales run on purchase orders (RHP p.339).

Earnings equation: Profit ≈ units shipped × price − materials − staff − overheads − interest. FY26 EBITDA was ₹387.10 million on revenue of ₹1,399.43 million, about 27.7% (our arithmetic, RHP p.454, RHP p.119).

03Where the money comes from

Source: RHP p.339. Sales to the United States were ₹778.00 million in FY25 and ₹651.78 million in FY26 (RHP p.37). On the prospectus's figures, exports were about 95% of FY26 product sales (our arithmetic, RHP p.37). Revenue depends on one export market more than on any one customer.

04The growth record

Source: RHP p.119, RHP p.121, RHP p.454. Our arithmetic: revenue grew about 6.0% a year from FY24 to FY26, EBITDA about 14.2% and profit about 34.2% (RHP p.119, RHP p.454). Debtor days were 103 in FY24, 98 in FY25 and 111 in FY26 (RHP p.218). Other income of ₹30.96 million was 9.4% of the ₹329.03 million profit before tax in FY26 (our arithmetic, RHP p.119).

05What the growth is made of

Mostly lower costs, not higher sales. From FY24 to FY26 finance costs fell from ₹82.06 million to ₹46.55 million and other expenses from ₹424.70 million to ₹360.62 million, while revenue rose ₹154.15 million (RHP p.119). Other income rose from ₹5.72 million to ₹30.96 million (RHP p.119). Sales to the United States fell from ₹778.00 million in FY25 to ₹651.78 million in FY26 (RHP p.37). The prospectus does not give volumes in the pages read, so revenue cannot be split into volume and price.

06Earnings quality

Cash flow has kept pace with profit. Working capital is heavy for the business's size: inventory and receivables together were about 72% of FY26 revenue (our arithmetic, RHP p.117). Non-current loans rose from ₹9.84 million to ₹100.63 million in FY26 (RHP p.117); the prospectus mentions the extension of inter-corporate loans (RHP p.48).

07The balance sheet

At March 2026 borrowings were ₹524.00 million, mostly short-term, against equity of ₹1,286.15 million (our arithmetic, RHP p.117). Cash was ₹15.05 million (RHP p.117). Borrowings fell from ₹818.54 million at March 2024 (our arithmetic, RHP p.117). Equity share capital doubled in FY26 to ₹349.11 million (RHP p.117). After the issue, ₹241.19 million of the proceeds repays the subsidiary's borrowings (RHP p.189).

08What the money is for

Source: RHP p.189. The machinery money is to be spent over FY27 and FY28 (RHP p.189).

Into the business 9,897,000 new shares, ₹1,326.20 million at the upper band (our arithmetic, RHP p.1). To the selling shareholder 1,350,000 shares, ₹180.90 million at the upper band (our arithmetic, RHP p.1).

09Who is selling

Source: RHP p.1, RHP p.183. The HUF is offering about 54% of its holding (our arithmetic, RHP p.183).

10Promoters

The promoters are Saurabh Sangla, Mukesh Sangla, Monika Sangla, Shubhangi Trust, Shreya Trust and Swan Irrigation LLP (RHP p.1). Average costs range from nil, for shares the two trusts received by gift and bonus, to ₹20.61 a share (RHP p.183). Proceedings against the promoters include 5 criminal, 8 tax and 2 material civil matters, involving ₹50.64 million (RHP p.50). The promoter and managing director Saurabh Sangla was paid ₹8.40 million in each of FY24, FY25 and FY26 (RHP p.60).

11Who already owns it

The promoters and promoter group hold 33,549,334 of the 34,911,340 shares, 96.10% (RHP p.103, RHP p.114). After the offer, with 9,897,000 new shares and 1,350,000 sold by the HUF, the promoters and promoter group would hold about 71.9% (our arithmetic, RHP p.103). Outside the promoter group, one shareholder holds 1% or more: Abakkus Venture Opportunities Fund, with 1,111,112 shares, 3.18% before the issue, bought from two promoter-group companies at ₹90 a share in August 2026 (RHP p.179, RHP p.162).

12What changed just before the IPO

• Equity share capital doubled in FY26 (RHP p.117).
• Borrowings fell from ₹818.54 million to ₹524.00 million over two years (our arithmetic, RHP p.117).
• The company lent ₹90.80 million to other companies in FY26 (RHP p.121).
• Sales to the United States fell by ₹126.22 million in FY26 (our arithmetic, RHP p.37).
• A 1:1 bonus issue on February 18, 2026 doubled the share count from 17,455,670 to 34,911,340, and was the last allotment before the IPO (RHP p.151).
• The company does not propose a pre-IPO placement (RHP p.135).
• Ashok Khasgiwala & Co. LLP was appointed statutory auditor in August 2025, in place of Smak & Co (RHP p.130).
• The partnership M/s Adroit Industries India was converted into a public limited company in January 1995 (RHP p.361).

13Capacity and expansion

Source: RHP p.331. Utilisation at Dewas is measured against an effective capacity of 2,515 MT, and at Sanwer against 85,000 pieces; Sanwer ran low during a renovation that the prospectus says is now complete (RHP p.331). The proceeds fund machinery at Dewas and Pithampur (RHP p.188).

14Market size and industry structure

As claimed: the industry overview discusses the propeller-shaft market and US tariff changes, including a February 2026 agreement that cut US tariffs on a range of Indian imports to 18% (RHP p.248).

The part that is addressable: propeller shafts and driveline parts for export, mainly to North America, and for India.

What the company is today: FY26 revenue of ₹1,399.43 million (RHP p.119).

15Competitive position

Source: RHP p.217; P/E at closing prices of August 20, 2026. Customers order on purchase orders without long-term commitments (RHP p.339).

16Peers the company named

Peers named in the offer document: Hindustan Hardy, Talbros Engineering and GNA Axles (RHP p.217).

Hindustan Hardy is smaller than Adroit; GNA Axles is about ten times its revenue (our arithmetic, RHP p.217).

17Valuation at the issue price

At the upper band of ₹134, the 9,897,000 new shares take the total from 34,911,340 to 44,808,340 (our arithmetic, RHP p.114, RHP p.1):

Source: RHP p.119, RHP p.217, RHP p.454. At ₹126 the market capitalisation is ₹5,645.85 million (our arithmetic, RHP p.114). Enterprise value uses the shares before the offer, borrowings of ₹524.00 million and cash of ₹15.05 million: ₹5,187.07 million (our arithmetic, RHP p.117).

The three named peers traded at 10.70 to 20.85 times earnings on August 20, 2026 (RHP p.217). At the upper band the issue is priced at 17.9 times FY26 EPS and 23.0 times FY26 profit on the enlarged share count.

18Subscription

Bidding opens on September 23, 2026 and closes on September 25, 2026, per the NSE issue page. This study was written before bidding opened. The lot is 111 shares, ₹14,874 at the upper band.

19Risks, in plain words

One export market: the United States took about 51.28% of FY26 product sales (RHP p.37) → US tariffs move revenue directly → the prospectus notes changing US tariff policy through 2026 (RHP p.248).

Currency: foreign-currency exposure was unhedged in FY24 to FY26 (RHP p.37).

Customers: top ten customers were 60.86% of product sales, without long-term commitments (RHP p.339).

Working capital: inventory and receivables were about 72% of FY26 revenue (our arithmetic, RHP p.117).

Promoter litigation: 5 criminal proceedings against promoters (RHP p.50).

20Litigation and regulatory matters

Source: RHP p.50. The promoters have filed one criminal proceeding (RHP p.50).

21Related-party transactions

The summary of related-party transactions runs from RHP p.124; this study did not reproduce it. The fresh issue invests ₹680.75 million in the wholly owned subsidiary Adroit Driveshafts (our arithmetic, RHP p.189).

22What the offer document does not say

Volumes shipped are not given in the pages read. The borrowers of the ₹90.80 million of inter-corporate loans are not identified in the pages read. The general corporate purposes amount and offer expenses are left blank.

23Five questions for management

1. Why did sales to the United States fall from ₹778.00 million to ₹651.78 million in FY26, and what share of FY27 orders is from the US?
2. Who received the ₹90.80 million of inter-corporate loans in FY26, and on what terms?
3. What capacity will the Dewas and Pithampur machinery add, and at what utilisation do the plants run today?
4. Why is inventory about 144 days of revenue?
5. How much of the fall in other expenses from FY24 to FY26 is expected to last?

1Sources and cited facts

This study was read from 1 document the company filed. The 64 figures it cites are listed under the document each came from, with the page and the sentence as printed.