Advanced Systek Limited IPO

01At a glance

What the company does: designs and installs automation for petroleum and petrochemical storage terminals, airport fuel farms and ports, fiscal metering skids and LPG bottling plants; it makes batch controllers, earthing detectors and similar devices, and through a subsidiary makes diesel exhaust fluid (AP p.3).

Who pays it: mainly India's public-sector oil companies, plus EPC contractors and some private companies; the top ten customers were 94.91% of FY26 revenue (AP p.3, DRHP p.27).

Why it is raising money: ₹159.61 million for a fabrication shed and new building at its Vadodara site, ₹500 million for working capital, and the rest for general purposes (AP p.5, AP p.6).

How fast it has grown: revenue from ₹1,882 million in FY24 to ₹3,023 million in FY26, and profit from ₹192 million to ₹367 million (AP p.7).

The one thing to understand: a project business paid slowly by a few state-owned customers. Trade receivables were 81.30% of FY26 revenue, and operating cash flow was negative in FY25 and FY26 (AP p.7, DRHP p.40).

02The business, in plain words

A fuel terminal stores petrol, diesel and jet fuel in large tanks and loads it into tankers. Automation measures what goes in and out, controls the loading, and guards against spills and fire. A terminal-automation company designs the system, supplies its own and bought-in equipment, installs it, and maintains it.

An oil company upgrades a depot → it tenders for terminal automation, which Advanced Systek wins → the company supplies controllers, meters, valves and software, and sub-contractors install them → the oil company pays in stages, keeping back retention money until the system proves itself.

The company has over 30 years in the business and one manufacturing facility in Vadodara (AP p.3, DRHP p.49). It relies on sub-contractors for installation (DRHP p.38).

Earnings equation: Revenue ≈ order book executed. The order book was ₹1,934.79 million at the latest date given (DRHP p.34).

03Where the money comes from

Source: DRHP p.27.

Revenue depends on the petroleum, oil and gas industry (DRHP p.31). PSU customers hold back retention money under their contracts, and can invoke performance bank guarantees (DRHP p.35).

04The growth record

Source: AP p.7. Margins are our arithmetic.

05What the growth is made of

Revenue grew 34.3% in FY25 and 19.6% in FY26 (AP p.7, our arithmetic). The order book was ₹1,374.11 million, ₹1,993.43 million and ₹1,934.79 million at the three dates the document gives (DRHP p.34). Margins improved modestly (AP p.7).

06Earnings quality

Profit is not yet cash. Trade receivables were 62.54%, 66.63% and 81.30% of revenue over the three years, rising each year (DRHP p.40). Operating cash flow was negative ₹351.52 million in FY26 against profit of ₹367.29 million (AP p.7). Retention money held back by PSU customers adds to the delay (DRHP p.35). Trade receivable days were 228 in FY24, 243 in FY25 and 297 in FY26, and working capital days 183, 182 and 218 (DRHP p.40).

07The balance sheet

Source: AP p.7.

The summary table shows borrowings of ₹1,750 million at March 2026 (AP p.7). Elsewhere the document says the company had sanctioned working-capital limits of ₹1,750 million at 31 May 2026 to ₹200 million fund-based and ₹1,550 million non-fund-based, with nil fund-based and ₹1,079.56 million non-fund-based outstanding (DRHP p.38). The two figures appear to describe the limit rather than cash borrowed; readers should check the restated balance sheet.

08What the money is for

Source: AP p.5, AP p.6.

09Who is selling

Source: AP p.1. The last row is our arithmetic from the total of 2,600,000. The two other sellers are Grishma Mihir Ghelani and Maurya Mihir Ghelani, 6,000 shares each, at a weighted average cost of ₹208.00 a share (DRHP p.1).

10Promoters

The promoters are Mukesh R Kapadia and Umed Amarchand Fifadra, with Shobha Mukesh Kapadia and Usha Umed Fifadra (AP p.1, AP p.6). The two founders bought shares from Spectra Tek UK and D.I. Netherlands in 2007; the company has applied to the RBI to compound delays in reporting those transfers under FEMA (DRHP p.43). Some historical statutory records cannot be traced (DRHP p.44).

The prospectus names four promoters: Mukesh R Kapadia, Umed Amarchand Fifadra, Shobha Mukesh Kapadia and Usha Umed Fifadra, holding 40.86% between them (DRHP p.315). Remuneration and commission to Mukesh R Kapadia and Umed Amarchand Fifadra together went from ₹22.36 million in FY24 to ₹37.89 million in FY26 (our arithmetic, DRHP p.368).

11Who already owns it

Source: AP p.6.

Promoters and promoter group hold 82.53% (AP p.6, our arithmetic).

12What changed just before the IPO

• Receivables: rose to 81.30% of revenue (DRHP p.40).
• Share capital: raised from ₹32.05 million to ₹192.28 million in FY25 (AP p.7).
• RBI compounding: applications filed for past FEMA reporting delays (DRHP p.43).
• Bonus: a bonus issue of 16,023,390 shares, five for every one held, on 11 September 2024, the last allotment before the offer; a preferential allotment of 401,756 shares at ₹1,070.30 had been made in March 2024 (DRHP p.112, DRHP p.351).
• Public company: the company became a public limited company in September 2024 (DRHP p.3); there has been no change of statutory auditor in the three years before the filing (DRHP p.94).

13Capacity and expansion

The proceeds add a fabrication shed, rooftop solar and equipment, and a new building at the Vadodara site (AP p.5). There is one manufacturing facility (DRHP p.49).

14Market size and industry structure

The CARE report cited in the offer document describes rising automation in India's petrochemical and fuel-storage industry, using distributed control systems and SCADA (AP p.4). The document says it has no closely comparable competitor in products and size (DRHP p.51).

15Competitive position

What the document claims, and what it rests on:

• Thirty years in terminal automation, with its own products and software (AP p.3).
• Long relationships with PSU oil companies (AP p.3, DRHP p.27).

Against that: near-total dependence on a few customers in one industry, and slow payment (DRHP p.27, DRHP p.40).

16Peers the company named

The document says it has no closely comparable listed competitor (DRHP p.51). For Advanced Systek it gives FY26 earnings per share of ₹19.10, net asset value per share of ₹130.11 and return on net worth of 14.68% (AP p.7). No P/E is possible for the company until a price band is set.

17Risks, in plain words

• Customer concentration. Ten customers, mostly PSU oil companies, are 95% of revenue (DRHP p.27).
• Receivables. 81% of annual revenue was outstanding at March 2026 (DRHP p.40).
• One industry. Oil and gas capital spending drives orders (DRHP p.31).
• Guarantees and retention. Customers can invoke bank guarantees and hold back retention money (DRHP p.35).
• One plant. Manufacturing is in Vadodara only (DRHP p.49).
• No currency hedging on foreign-currency exposure (DRHP p.49).

18Litigation and regulatory matters

The company has applied to the RBI to compound delayed FEMA reporting (DRHP p.43). The litigation summary was not read in detail for this study.

19Related-party transactions

The company has related-party transactions and expects them to continue (DRHP p.53). The details were not read for this study.

20What the offer document does not say

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

• Customer names and shares within the top ten, in the pages read.
• How much of receivables is retention money and how old it is.
• Why the summary shows ₹1,750 million of borrowings when fund-based borrowing was nil in May 2026.
• The FEMA compounding amount.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. Which customer is the largest, and what share of revenue does it provide?
2. How much of the roughly ₹2,457 million of FY26 receivables, our arithmetic from the 81.30% ratio, is overdue or retention money?
3. Does the ₹1,750 million in the summary table represent cash borrowings or sanctioned limits?
4. Why did operating cash flow turn negative in FY25 and FY26 as revenue grew?
5. What is the expected outcome of the RBI compounding applications?

2Sources and cited facts

This study was read from 2 documents the company filed. The 61 figures it cites are listed under the document each came from, with the page and the sentence as printed.