Neolite Zkw Lightings Limited IPO

01At a glance

What the company does: makes automotive lighting products and components, more than 830 SKUs, for passenger vehicles, commercial vehicles, three- and two-wheelers and off-road vehicles, at plants in Bahadurgarh, Haryana, and a new plant near Pune (DRHP p.36, DRHP p.328).

Who pays it: vehicle makers: OEMs were 91.07% of revenue in the three months to June 2025, the top ten customers 82.50%, and the company has 44 OEM customers (DRHP p.42, DRHP p.181). Exports were 55.08% of revenue, and CIS countries 94.18% of exports (DRHP p.42, DRHP p.181).

Why it is raising money: ₹1,525.10 million for a greenfield plant at Kancheepuram, Tamil Nadu, ₹790.79 million to upgrade the Bahadurgarh plant with electronics lines, ₹650.00 million to repay borrowings, and the rest for general purposes (DRHP p.38).

How fast it has grown: revenue of ₹4,054 million in FY23, ₹4,030 million in FY24 and ₹5,121 million in FY25, and ₹1,249 million in the three months to June 2025 (DRHP p.40).

The one thing to understand: recent growth comes from exports to the CIS. Sales to CIS customers rose from ₹493.88 million in FY23 to ₹2,181.11 million in FY25, about 43% of revenue, and to 52% in the June 2025 quarter (DRHP p.55, our arithmetic). Over the same period gross margin rose from 37.84% to 64.47% and operating EBITDA margin from 10.25% to 29.51% (DRHP p.181).

02The business, in plain words

An auto-lamp maker makes lamps to each vehicle maker's specification and supplies them under purchase orders; it also sells replacement lamps through aftermarket distributors.

A vehicle maker abroad designs a new model → it orders a set of LED lamps from Neolite ZKW → the company makes them at Bahadurgarh → it ships them for the production line and is paid under the purchase order.

LED products were 59.54% of revenue in the three months, up from 35.33% in FY25 (DRHP p.181). R&D spending was 2.62% of revenue (DRHP p.181).

Earnings equation: Profit ≈ lamps supplied × (price − components and assembly cost) − overheads − interest. Operating EBITDA margin was 29.51% in the three months (DRHP p.181).

03Where the money comes from

Source: DRHP p.42, DRHP p.181. Q1 FY26 is three months.

Source: DRHP p.55. The document names Russia and Uzbekistan among the CIS countries, and says the FY23 goods billed to China were delivered directly to an end user in Uzbekistan on the customer's direction (DRHP p.55).

04The growth record

Source: DRHP p.40, DRHP p.181, DRHP p.505. Q1 FY26 is three months.

Trade receivables days were 87 in FY23, 82 in FY24 and 66 in FY25 (DRHP p.79).

05What the growth is made of

Exports and margin. Revenue rose 27% in FY25 and exports 70% (our arithmetic, DRHP p.55, DRHP p.181). Gross margin rose from 37.84% in FY23 to 49.18% in FY25 and 64.47% in the June 2025 quarter (DRHP p.181). Profit for the quarter was 42% of FY25's full-year profit on 24% of its revenue (our arithmetic, DRHP p.40).

06Earnings quality

Operating cash flow has broadly kept pace with profit: ₹2,102.25 million from FY23 to June 2025 against ₹1,097.24 million of profit (our arithmetic, DRHP p.40, DRHP p.505). The margin gains coincide with the rise in CIS exports, which the document lists among its top risks (DRHP p.42). There are no auditor qualifications (DRHP p.41).

07The balance sheet

Source: DRHP p.40, DRHP p.181.

08What the money is for

Source: DRHP p.38. The company has already spent ₹226.23 million on land for the Tamil Nadu plant (DRHP p.38). The amounts rest on a project report by Goldrush Capital Services and have not been appraised by a bank (DRHP p.60).

09Who is selling

Source: DRHP p.37. Neokraft's shares will come from converting preference shares before the red herring prospectus (DRHP p.37).

In all, the offer is a fresh issue of up to ₹4,000.00 million and an offer for sale of up to ₹2,000.00 million (DRHP p.3).

10Promoters

The promoters are Rajesh Jain, Vaishali Jain and Pramod Plastic Industries Private Limited (DRHP p.36). Pramod Plastic Industries and Neokraft Global hold compulsorily convertible preference shares that will convert into 5,570,600 and 3,252,900 equity shares before the red herring prospectus (DRHP p.39).

Rajesh Jain, the managing director, was paid remuneration of ₹18.00 million in FY23, ₹18.00 million in FY24 and ₹21.60 million in FY25 (DRHP p.44).

11Who already owns it

Source: DRHP p.39. ZKW Group GmbH was formerly Zizala Lichtsysteme GmbH (DRHP p.23).

12What changed just before the IPO

• Exports: above half of revenue in the June 2025 quarter (DRHP p.181).
• Margins: gross margin up to 64.47% in the quarter (DRHP p.181).
• New plant: Unit 3 near Pune recently began operating (DRHP p.328).
• Preference shares: conversions due before the red herring prospectus (DRHP p.39).
• Share split: each ₹100 share was sub-divided into ten shares of ₹10 by resolutions of 18 December 2025 (DRHP p.125).
• Bonus issue: four bonus shares for every one held were allotted on 23 December 2025, the last allotment in the share capital history (DRHP p.125).
• Public company: a fresh certificate of incorporation dated 5 December 2025 was issued on conversion from a private to a public company (DRHP p.111).
• Auditor: there have been no changes in the statutory auditors in the three years before the draft (DRHP p.112).

13Capacity and expansion

Three plants: Unit 1 for automotive lighting and Unit 2 for sheet metal in Bahadurgarh, and Unit 3 for OEM lighting near Pune, over 407,702 square feet in all (DRHP p.328). The proceeds fund a fourth plant in Tamil Nadu and electronics lines at Unit 1 (DRHP p.38).

14Market size and industry structure

The CRISIL report cited in the offer document projects India's automotive-lighting market to grow from ₹101.72 billion in FY2025 to ₹225 to 245 billion by FY2030 (DRHP p.36). Those projections are CRISIL's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• Long OEM relationships: an average of more than 11 years with the top ten customers (DRHP p.52).
• LED capability: LED lamps were 60% of revenue in the June 2025 quarter (DRHP p.181).
• A shareholder in the industry: ZKW holds 26% (DRHP p.39).

Against that: dependence on the auto sector and on CIS export markets, ten customers for 83% of revenue, and larger listed competitors (DRHP p.42, DRHP p.181).

16Peers the company named

Source: DRHP p.181. Peer P/E uses prices on 19 December 2025.

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

17Risks, in plain words

• Auto cycle. About 98% of revenue from the automotive sector (DRHP p.42).
• Customers. Ten customers were 83% of recent revenue (DRHP p.42).
• CIS exports. 94% of exports go to CIS countries, including Russia (DRHP p.42, DRHP p.55).
• Purchase orders. Most supply is on purchase orders, not long-term contracts (DRHP p.42).
• Project risk. A new plant in a new state, not appraised by a bank (DRHP p.60).

18Litigation and regulatory matters

Source: DRHP p.41. The civil matters include labour disputes (DRHP p.41).

19Related-party transactions

Not read in detail for this study.

20What the offer document does not say

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

• Who the CIS customers are, how they pay, or how sanctions and payment channels affect the business, in the pages read.
• Why gross margin reached 64.47% in the June 2025 quarter.
• What ZKW contributes beyond its shareholding, in the pages read.
• What the ₹242.55 million regulatory and civil claims concern, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. Who are the CIS customers, and in what currency and through which banks are they paid?
2. What drove gross margin to 64% in the June 2025 quarter, and is that level repeatable?
3. What does ZKW provide, technology, designs, customers, and on what terms?
4. Which customers will the Tamil Nadu plant serve?
5. What are the claims of ₹242.55 million against the company?

1Sources and cited facts

This study was read from 1 document the company filed. The 60 figures it cites are listed under the document each came from, with the page and the sentence as printed.