Hd Fire Protect Limited IPO

01At a glance

What the company does — makes and supplies fire-protection equipment and systems across water, foam and gas-based suppression, mostly to its own designs, for high-hazard industrial, residential and commercial uses (DRHP p.18). The CRISIL report it cites ranks it India's second-largest maker of such equipment by revenue and largest exporter by value in FY2024 (DRHP p.18).

Who pays it — 2,179 customers in FY25 in India and abroad; exports were 36.24% of FY25 revenue and the top ten customers 21.74% (DRHP p.55, DRHP p.205).

Why it is raising money — it is not. The offer is entirely a sale of shares by Harish Narshi Dharamshi and Kusum Harish Dharamshi, and the company receives no proceeds (DRHP p.19).

How fast it has grown — revenue from ₹3,241 million in FY23 to ₹3,730 million in FY24 and ₹4,328 million in FY25 (DRHP p.20).

The one thing to understand — a debt-free, cash-generating business whose owners have already taken cash out and are now selling a stake. The company spent ₹1,023.22 million on buybacks in FY23 and FY24 and paid ₹561.53 million of dividends in FY25, and Kusum Harish Dharamshi is offering 55% of that holding (DRHP p.19, DRHP p.88, our arithmetic).

02The business, in plain words

A fire-protection manufacturer designs and makes sprinklers, hydrant valves, deluge valves, foam and gas systems, and sells them in India and abroad; some goods are made by contract manufacturers.

A refinery project needs a deluge fire-suppression system → its fire contractor orders valves and foam equipment from HD Fire → the company makes and supplies them to the specified standard → the contractor pays on the agreed terms.

Earnings equation: Profit ≈ units sold × (price − raw-material and contract-manufacturing cost) − overheads. Operating EBITDA margin was 31.89% in FY25 (DRHP p.121).

03Where the money comes from

Source: DRHP p.121, DRHP p.205.

04The growth record

Source: DRHP p.20, DRHP p.121, DRHP p.348.

05What the growth is made of

Steady volume and rising margins. Revenue grew 15.08% in FY24 and 16.05% in FY25, and profit about 25% in each year (DRHP p.64). Exports grew faster than domestic sales in FY25 (DRHP p.121).

06Earnings quality

Operating cash flow was ₹2,154.39 million over FY23 to FY25 against profit of ₹2,676.91 million (our arithmetic, DRHP p.20, DRHP p.348). The company had no borrowings in any of the three years (DRHP p.20). Imports of raw materials and contract-manufactured goods cost ₹1,047.36 million in FY25, and it has no formal currency-hedging policy (DRHP p.55).

07The balance sheet

Source: DRHP p.20.

08What the money is for

Source: DRHP p.19. No pre-IPO placement is contemplated (DRHP p.26).

09Who is selling

Source: DRHP p.18, DRHP p.19. The shares offered are 15.00% of the company's equity (our arithmetic).

10Promoters

The promoters are Harish Narshi Dharamshi, Kusum Harish Dharamshi, Miheer Sadanand Ghotikar, Parika Miheer Ghotikar and Anik Narendra Dharamshi (DRHP p.18). Director remuneration in FY25 was ₹117.09 million to Harish Dharamshi, ₹64.85 million to Miheer Ghotikar, ₹64.87 million to Anik Dharamshi and ₹44.04 million to Parika Ghotikar, up from ₹78.00 million, ₹30.00 million, ₹30.00 million and ₹30.00 million in FY24 (DRHP p.22). No proceedings are listed against the promoters (DRHP p.21).

11Who already owns it

Source: DRHP p.19. The fourth row is our arithmetic.

12What changed just before the IPO

• Dividends — ₹561.53 million paid in FY25, against under ₹2 million in FY24 (DRHP p.88).
• Buybacks — ₹735.16 million in FY23 and ₹288.06 million in FY24 (DRHP p.88).
• Share capital — raised to ₹876.15 million; shares transacted in the last three years were acquired at no cost (DRHP p.20, DRHP p.26).
• Pay — directors' remuneration roughly doubled in FY25 (DRHP p.22).

13Capacity and expansion

Manufacturing facilities are in Maharashtra and the company depends on them for 65.80% of FY25 revenue (DRHP p.31). No expansion is funded by the offer (DRHP p.19).

14Market size and industry structure

The CRISIL report cited in the offer document puts India's fire-protection equipment market at ₹102 billion in FY2025, after 11.0% annual growth since FY2019, and projects ₹165–175 billion by FY2030 (DRHP p.18). Those projections are CRISIL's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• Second-largest Indian maker and largest exporter, citing CRISIL (DRHP p.18).
• In-house designs meeting national and international standards (DRHP p.18).

Against that: plants in one state, reliance on a few suppliers and contract manufacturers, unhedged currency exposure, and certification requirements (DRHP p.31, DRHP p.55).

16Peers the company named

Source: DRHP p.120. The document says no listed Indian company makes fire-protection equipment, so these peers are capital-goods companies; their P/E ranges from 37.52 to 104.37, average 57.50 (DRHP p.119, DRHP p.120).

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

17Risks, in plain words

• Maharashtra plants. Two-thirds of revenue from one state's facilities (DRHP p.31).
• Suppliers. Top ten suppliers were 43% of expenses (DRHP p.31).
• Currency. Exports and imports largely unhedged (DRHP p.55).
• Certifications. Loss of approvals would hurt sales (DRHP p.31).
• Control. Promoters and their group would still hold about 85% after the offer (our arithmetic, DRHP p.19).

18Litigation and regulatory matters

Source: DRHP p.21. Contingent liabilities were ₹57.94 million of bank guarantees, secured by fixed deposits (DRHP p.21).

19Related-party transactions

Mainly directors' remuneration, dividends and the earlier buybacks (DRHP p.22).

20What the offer document does not say

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

• What the criminal case against a director concerns, in the pages read.
• Which products are contract-manufactured, and by whom, in the pages read.
• Why remuneration rose so sharply in FY25, in the pages read.
• Why the promoters chose buybacks and then an offer for sale, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. Why offer shares now, after taking ₹1.6 billion out through buybacks and dividends?
2. How much of revenue comes from contract-manufactured imports, and from which countries?
3. Why is there no currency-hedging policy with a third of sales exported?
4. How was the FY25 increase in directors' pay decided?
5. Who are the main competitors in India, if none is listed?

1Sources and cited facts

This study was read from 1 document the company filed. The 27 figures it cites are listed under the document each came from, with the page and the sentence as printed.