ArMee Infotech Limited IPO

01At a glance

What the company does: supplies, installs and maintains IT hardware and software for clients, largely on government and PSU projects, and has moved into solar EPC, solar power projects, battery storage and retail "Experience Zones" (RHP p.101, RHP p.13).

Who pays it: government and PSU clients directly (22.99% of FY26 revenue) or as end users through other clients (60.85%) (RHP p.23). The top five clients were 76.66% of FY26 revenue; the two largest were 29.70% and 29.43% (RHP p.29).

Why it is raising money: ₹15,500 lakh for fixed deposits that secure performance bank guarantees for new projects, ₹6,000 lakh for working capital and ₹650 lakh to repay borrowings, plus general corporate purposes (RHP p.100).

How fast it has grown: revenue from ₹1,02,057.47 lakh in FY24 to ₹1,39,662.61 lakh in FY26, about 17.0% a year; profit fell from ₹5,013.04 lakh to ₹4,546.65 lakh (our arithmetic, RHP p.70).

The one thing to understand: a thin-margin integrator that needs bank guarantees to win tenders and is shifting towards renewable energy, where the prospectus says its promoters' and managers' expertise is "minimal" (RHP p.30). About 90.59% of the consolidated order book is renewable-energy work (RHP p.30).

02The business, in plain words

A system integrator bids for tenders to supply computers, servers, panels and software, installs them and supports them under service agreements, earning a margin over what it pays technology makers (RHP p.13). The company now also builds solar plants for others, develops its own solar projects that supply power under purchase agreements, and plans battery storage (RHP p.101).

A state department tenders IT equipment for its schools → ArMee bids, furnishes a bank guarantee and wins → it procures, installs and maintains the equipment → the department pays against contract milestones.

Earnings equation: Profit ≈ contract value × gross margin − staff and overheads − interest. Gross margin was 8.95% and EBITDA margin 5.42% in FY26 (RHP p.121).

03Where the money comes from

Source: RHP p.29, RHP p.23, RHP p.21. The company asked its top five clients for consent to name them and received none (RHP p.30). Revenue depends on a few clients: two provided about 59% of FY26 revenue (our arithmetic, RHP p.29).

04The growth record

Source: RHP p.121, RHP p.70, RHP p.71. Return on equity was 70.67%, 35.94% and 28.52% (RHP p.121). Debtor days, counting billed receivables and unbilled revenue, fell from 183 in FY24 to 170 in FY25 and were 171 in FY26 (RHP p.109). Other income of ₹1,346.72 lakh was 22.1% of the ₹6,099.45 lakh profit before tax in FY26 (our arithmetic, RHP p.70, RHP p.71). Our arithmetic: revenue grew about 17.0% a year from FY24 to FY26, EBITDA about 2.8% and profit fell about 4.8% a year; EBITDA margin fell 159 basis points (RHP p.121).

05What the growth is made of

Revenue grew; profit did not. Gross margin fell from 9.45% in FY24 to 6.77% in FY25 and recovered to 8.95% in FY26, which the company attributes partly to a normalising revenue mix (RHP p.40, RHP p.121). FY26 costs include ₹11,962.51 lakh of EPC contract costs, the first year of the renewable line in the accounts (RHP p.70). The prospectus does not split FY26 revenue between IT, renewable energy and retail in the pages read.

06Earnings quality

Revenue is booked on delivery, while tax invoices are raised later at contract milestones, so part of what is earned sits as unbilled revenue (RHP p.110). Operating cash flow was negative in FY25, when receivables rose by ₹33,093.82 lakh (RHP p.71).

07The balance sheet

At March 2026 total debt was ₹17,436.07 lakh against equity of ₹18,218.20 lakh, a debt-to-equity ratio of 0.96, up from 0.29 in FY24 (RHP p.121, RHP p.69). Finance costs rose from ₹672.45 lakh in FY25 to ₹2,494.11 lakh in FY26 (RHP p.70). Capital work in progress was ₹7,038.99 lakh (RHP p.69). Cash was ₹2,130.81 lakh, and other bank balances ₹7,518.26 lakh, including ₹7,515.54 lakh placed in a trust and retention account during FY26 (RHP p.69, RHP p.71). Non-fund limits of ₹12,540.00 lakh were sanctioned, of which ₹12,437.47 lakh were in use (RHP p.101).

After the issue: equity would rise to about ₹48,218.20 lakh before issue expenses (our arithmetic, RHP p.69, RHP p.100).

08What the money is for

Source: RHP p.100. The guarantee deposits are to be deployed over FY27 and FY28 (RHP p.100). Guarantees issued came to 2.37% of the value of projects won in FY26 (RHP p.101).

Into the business the whole issue, up to ₹30,000 lakh (RHP p.100). To selling shareholders nothing: there is no offer for sale (RHP p.66).

09Who is selling

No one. The issue is only new shares (RHP p.66).

10Promoters

The promoters are Ami Ridhish Patel, Kiritkumar Chimanbhai Patel and Ridhish Kiritbhai Patel (RHP p.1). Their average costs are ₹5.63, ₹6.26 and ₹18.09 a share (RHP p.57). One proceeding against the promoters involves ₹2.86 lakh (RHP p.52). Remuneration to the three promoters rose from ₹166.50 lakh in FY24 to ₹396.68 lakh in FY26 (our arithmetic, RHP p.73).

11Who already owns it

The promoters hold 1,80,81,180, 25,21,542 and 14,01,492 shares, and with the promoter group 92.72% of the 2,37,31,386 shares before the issue (RHP p.57, RHP p.66). If the whole issue is allotted at ₹375, the promoter and promoter group share would fall to about 69.3% (our arithmetic, RHP p.57). Four shareholders outside the promoter group hold 1% or more before the issue: Narendrakumar Chhotalal Shah 1.67%, Narendrakumar Chhotalal Shah HUF 1.67%, Geetaben Narendrakumar Shah 1.67% and Jayshree Kamal Patel 2.27% (RHP p.94).

12What changed just before the IPO

• Three subsidiaries for renewable energy and battery storage were incorporated between April and September 2025 (RHP p.119).
• The renewable line began: FY26 includes ₹11,962.51 lakh of EPC contract costs (RHP p.70).
• Debt rose from ₹4,810.12 lakh to ₹17,436.07 lakh in FY26 (RHP p.121).
• The largest client's share fell from 70.41% in FY24 to 29.70% in FY26 (RHP p.29).
• A 5:1 bonus issue on February 12, 2024 took the share count from 39,55,231 to 2,37,31,386, and was the last allotment before the IPO (RHP p.86).
• The company became a public limited company in April 2024, when the registrar issued a fresh certificate of incorporation on April 24, 2024 (RHP p.2).

13Capacity and expansion

For an integrator, capacity is bidding capacity, which depends on guarantee limits; the non-fund limits were almost fully used at March 2026 (RHP p.101). The issue adds ₹15,500 lakh of collateral for guarantees (RHP p.100). Capital work in progress of ₹7,038.99 lakh sits on the balance sheet (RHP p.69). The prospectus does not give plant-level capacity for the solar projects in the pages read.

14Market size and industry structure

As claimed: the market figures come from a D&B report on Indian IT and renewable energy, commissioned and paid for by the company for this issue (RHP p.6).

The part that is addressable: government and PSU IT tenders, mainly in Gujarat, Maharashtra and Tamil Nadu, and solar EPC and power projects.

What the company is today: ₹1,39,662.61 lakh of FY26 revenue (RHP p.70). The prospectus does not state the company's market share.

15Competitive position

Work is won by tender, and winning requires bank guarantees and earnest-money deposits (RHP p.101). The company lists as strengths its record on government and PSU projects and its financial record (RHP p.118). In renewable energy the prospectus describes the promoters' and senior management's expertise as minimal (RHP p.30).

16Peers the company named

Peers named in the offer document: Dynacons Systems & Solutions, Orient Technologies, KPI Green Energy and Oriana Power (RHP p.120).

Source: RHP p.120; P/E at closing prices of August 20, 2026. The table prints Orient Technologies' EPS as ₹1.00 and its P/E as 243.15, the same figure as its closing price, and the summary gives the lowest peer P/E as 9.16 while the table shows 9.62 (RHP p.119, RHP p.120). The peer average is stated as 70.63 (RHP p.119).

17Valuation at the issue price

At the upper band of ₹375, ₹30,000 lakh is 80,00,000 new shares, taking the total from 2,37,31,386 to 3,17,31,386 (our arithmetic, RHP p.66, RHP p.100):

Source: RHP p.118, RHP p.119, RHP p.70, RHP p.121. At ₹350 the market capitalisation is about ₹1,13,059.85 lakh (our arithmetic, RHP p.66). Enterprise value uses the shares before the issue, FY26 debt of ₹17,436.07 lakh and cash of ₹2,130.81 lakh: ₹1,04,297.96 lakh (our arithmetic, RHP p.121, RHP p.69). After the issue, the market capitalisation at the upper band would be 2.5 times book value including the gross proceeds (our arithmetic, RHP p.69).

The four named peers traded at 9.62 to 243.15 times earnings on August 20, 2026 (RHP p.120). At the upper band the issue is priced at 19.6 times FY26 EPS on the prospectus's basis and 26.2 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 40 shares, ₹15,000 at the upper band.

19Risks, in plain words

Customers: the two largest clients were 59% of FY26 revenue (our arithmetic, RHP p.29) → losing one would cut revenue sharply → the top five were 76.66% (RHP p.29).

New line of business: renewable energy is new and the promoters' expertise in it is minimal, in the prospectus's words (RHP p.30) → execution risk sits on 90.59% of the consolidated order book (RHP p.30).

Cash and receivables: operating cash flow was 0.36 times profit over three years (our arithmetic, RHP p.71) → growth is financed by debt and suppliers → debt-to-equity rose to 0.96 (RHP p.121).

Geography: 86.48% of FY26 revenue came from three states (RHP p.21).

Margins: gross margin moved between 6.77% and 9.45% in three years (RHP p.121) → small shifts in mix move profit a lot.

20Litigation and regulatory matters

Source: RHP p.52. The company has filed one criminal proceeding (RHP p.52).

21Related-party transactions

Source: RHP p.73, RHP p.74. Arrow Powertech, the group company, is described as an enterprise significantly influenced by key managerial personnel (RHP p.6, RHP p.73). Ridhish Kiritbhai Patel's remuneration rose from ₹98.25 lakh in FY24 to ₹300.00 lakh in FY26 (RHP p.73). Loans from Ami Ridhish Patel outstanding at March 2026 were ₹1,033.17 lakh (RHP p.75).

22What the offer document does not say

The names of the top five clients are not disclosed (RHP p.30). A split of FY26 revenue by business line is not given in the pages read. The general corporate purposes amount and issue expenses are left blank. Capacity of the solar projects under construction is not given in the pages read.

23Five questions for management

1. How much of FY26 revenue and gross profit came from IT, renewable EPC, solar power sales and retail?
2. How much of the ₹14,685.39 lakh of unbilled revenue at March 2026 has since been invoiced and collected?
3. What margin is expected on the renewable EPC order book, given the company's limited experience in the segment?
4. What is the ₹7,515.54 lakh placed in the trust and retention account for, and when is it released?
5. How much new tender value can the ₹15,500 lakh of guarantee deposits support at the 2.37% guarantee ratio of FY26?

1Sources and cited facts

This study was read from 1 document the company filed. The 73 figures it cites are listed under the document each came from, with the page and the sentence as printed.