Adroit Industries (India) Limited IPO

01At a glance

What the company does — forges, machines, heat-treats and assembles propeller shafts and torque-transmission components, over 5,000 SKUs, at three plants in Dewas, Pithampur and Sanwer, Madhya Pradesh (AP p.2).

Who pays it — mostly overseas distributors, Tier-1 driveline suppliers and vehicle makers; exports were 94.15% of product sales in the six months to September 2025, and distributors 64.21% (AP p.8, AP p.9). The top ten customers were 66.71% of product sales (AP p.3).

Why it is raising money — ₹167.68 million for machinery and a vehicle at Dewas, ₹369.64 million into its subsidiary Adroit Driveshafts for machinery at Pithampur, ₹202.68 million into the subsidiary to repay its debt, and the rest for general purposes (AP p.5).

How fast it has grown — revenue from ₹1,035 million in FY23 to ₹1,339 million in FY25, and ₹692 million in the six months to September 2025 (AP p.6).

The one thing to understand — a high-margin exporter that ties up a lot of cash. EBITDA margin was above 22% from FY24, but inventory days were 128 and debtor days 112 in the six months to September 2025, and net working capital days have stayed between 233 and 263 (AP p.7, AP p.8).

02The business, in plain words

A driveline-parts maker turns steel into shafts, yokes and joints that carry power from a vehicle's gearbox to its axle, and sells them as parts or finished assemblies, mostly through distributors abroad.

A parts distributor in North America orders propeller-shaft components for commercial vehicles → Adroit forges and machines them in Madhya Pradesh → it ships them in containers → it is paid in foreign currency on credit terms.

Automotive uses, mainly commercial vehicles, were 73.93% of product sales in the six months; the rest went to defence, heavy equipment and industrial uses (AP p.2, AP p.9). The document says the United States is a significant share of exports and describes US tariffs of up to 50% on some categories, later reduced under a US–India trade agreement of 7 February 2026 (DRHP p.37).

Earnings equation: Profit ≈ parts shipped × (export price − steel and machining cost) ± currency − interest on working capital. EBITDA margin was 22.01% in the six months (AP p.7).

03Where the money comes from

Source: AP p.3, AP p.6. H1 FY26 is six months. The gap between the last two rows is other operating revenue, whose breakdown was not read for this study.

Source: DRHP p.38, AP p.8, AP p.9.

04The growth record

Source: AP p.6, AP p.7. H1 FY26 is six months.

05What the growth is made of

Assemblies. Finished propeller-shaft assemblies rose from 23.74% of product sales in FY23 to 37.62% in the six months to September 2025 (AP p.3). EBITDA margin jumped from 13.69% in FY23 to 23.84% in FY24 and has held since (AP p.7); the pages read do not explain the jump. Repeat customers rose from 50.43% of customers in FY23 to 78.29% (AP p.7).

06Earnings quality

Operating cash flow has been positive since FY24, but working capital is heavy: inventory days of 128 and debtor days of 112 against creditor days of 35 in the six months (AP p.8). Revenue from operations exceeded product sales by ₹126.85 million in FY25 (our arithmetic, AP p.3, AP p.6); the accounting policies say export incentives are recognised as income in the year of export (DRHP p.418). The statutory auditors expressed no qualification (AP p.10).

07The balance sheet

Source: AP p.6, AP p.7.

Share capital was ₹174.56 million at September 2025, while 34,911,340 shares of ₹10 were outstanding at the DRHP date, twice as many (our arithmetic, AP p.6); the document says recent acquisitions were by gift and bonus issue (AP p.9).

08What the money is for

Source: AP p.5.

The named objects total ₹740.00 million (our arithmetic).

09Who is selling

Source: AP p.1.

The HUF holds 2,483,066 shares, so it is offering 54% of them (our arithmetic, AP p.6).

10Promoters

The promoters are Saurabh Sangla, Mukesh Sangla, Monika Sangla, Swan Irrigation LLP, Shubhangi Trust and Shreya Trust (AP p.4). Saurabh Sangla, chairman and managing director, holds a science degree from the University of California and has over 18 years in plastics manufacturing and torque transmission (AP p.4, AP p.9). Mukesh Sangla, a non-executive director, has no formal education and over 40 years in commodity and polymer trading, including over 8 in torque transmission (AP p.4, AP p.9). Monika Sangla has been a director of Signet Tradelinks for over 20 years (AP p.4).

11Who already owns it

Source: AP p.6.

Promoters hold 48.70% and the promoter group 51.30%; the company has no other shareholders (AP p.6).

12What changed just before the IPO

• Bonus issue — the share count doubled after September 2025 (AP p.6, AP p.9).
• Debt — down from ₹936 million in March 2023 to ₹643 million (AP p.6).
• US tariffs — raised and then reduced under the February 2026 trade agreement, as the document describes (DRHP p.37).

13Capacity and expansion

Three plants in Madhya Pradesh (AP p.2). The proceeds fund additional machinery at the Dewas and Pithampur plants, and the document lists delay, cost overrun or under-use of the expansion among its top risks (AP p.5, AP p.9). Installed capacity and utilisation were not read for this study.

14Market size and industry structure

The CareEdge report cited in the offer document describes propeller shafts as part of the driveline market, with multi-tier supply chains, long approval cycles and capital-intensive manufacturing (AP p.4). newboard has not tested the report's statements.

15Competitive position

What the document claims, and what it rests on:

• Vertical integration from forging to testing (AP p.2).
• An export network across more than 25 countries (AP p.3).
• Repeat business, 78.29% of customers in the six months (AP p.7).

Against that: dependence on exports, distributors and the United States, long working-capital cycles, and a few domestic suppliers for key materials (AP p.8, DRHP p.37).

16Peers the company named

Source: DRHP p.188. Peer P/E uses prices on 27 March 2026.

No P/E is possible for the company until a price band is set.

17Risks, in plain words

• Exports. Over 94% of product sales (AP p.8).
• Trade policy. US tariffs and currency swings (DRHP p.37, AP p.9).
• Customers. Ten customers were two-thirds of product sales (AP p.8).
• Suppliers. Ten suppliers were 91.84% of purchases (AP p.8).
• Distributors. About two-thirds of sales go through them (AP p.9).
• One state. All plants in Madhya Pradesh (AP p.8).

18Litigation and regulatory matters

Source: AP p.10.

19Related-party transactions

Not read in detail for this study. The proceeds include ₹572.32 million to be put into the subsidiary Adroit Driveshafts (our arithmetic, AP p.5).

20What the offer document does not say

In the sections read for this study, the document does not give:

• What drove the margin jump in FY24, in the pages read.
• The United States' share of exports as a figure, in the pages read.
• What the ₹48 million of proceedings against promoters concern.
• Installed capacity and utilisation, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. What share of exports goes to the United States, and how did the tariffs affect orders and prices?
2. Why did EBITDA margin rise from 14% to 24% in one year?
3. Why does working capital run at over 230 days, and can it come down?
4. Who is the largest customer, at 25.68% of FY25 product sales?
5. What do the criminal and civil proceedings against promoters concern?

2Sources and cited facts

This study was read from 2 documents the company filed. The 28 figures it cites are listed under the document each came from, with the page and the sentence as printed.