Sathya Agencies Limited IPO

01At a glance

What the company does: runs multi-brand stores selling large appliances, mobiles and IT products, and small and kitchen appliances; 427 stores at 31 January 2026, including 35 mobile-phone stores, in Tamil Nadu, Andhra Pradesh, Kerala, Karnataka and Puducherry (AP p.4, AP p.5).

Who pays it: individual shoppers, mostly in smaller cities: 94.53% of stores were in Tier II and Tier II+ cities at March 2025 (AP p.5). Physical stores produced 99.98% of revenue in the six months to September 2025 (AP p.10).

Why it is raising money: ₹1,750.00 million to repay borrowings, ₹350.00 million towards the price of Unilet Appliances, a Karnataka chain bought in July 2025, and the rest for general purposes (AP p.7).

How fast it has grown: revenue from ₹18,971 million in FY23 to ₹34,969 million in FY25, and ₹19,967 million in the six months to September 2025 (AP p.8).

The one thing to understand: a fast-growing, debt-funded retailer on thin margins. Borrowings rose from ₹3,405.55 million in March 2023 to ₹8,140.05 million in September 2025, on top of ₹5,346.95 million of lease liabilities, against net worth of ₹2,232.77 million (AP p.8, AP p.11).

02The business, in plain words

An appliance retailer buys televisions, refrigerators, air conditioners, washing machines and phones from brands, displays them in rented stores, and earns the gap between its purchase price and the shelf price, plus brand support.

A family in a Tamil Nadu town needs an air conditioner before summer → it visits a Sathya store → it pays cash or takes consumer finance → Sathya delivers the unit bought from the brand, keeping about 17% of the sale as gross profit.

Gross margin was 17.75% of revenue in the six months to September 2025 (AP p.9). The top ten brand partners provided 71.84% of revenue (AP p.11). Air conditioners and other seasonal products make the first quarter heavy: 50.68% of six-month revenue came in April to June 2025 (AP p.11). The company runs 22 warehouses (AP p.5).

Earnings equation: Profit ≈ stores × sales per store × gross margin − rent, staff and store costs − interest on borrowings. EBITDA margin was 7.27% in the six months (AP p.9).

03Where the money comes from

Source: AP p.4, AP p.5. H1 FY26 is six months.

Source: AP p.9, AP p.10.

04The growth record

Source: AP p.8, AP p.9. H1 FY26 is six months.

05What the growth is made of

New stores and bigger bills. The store count nearly doubled from 204 to 387 between March 2023 and September 2025, and the average bill rose from ₹11,351 to ₹17,662 (AP p.9). Same-store sales growth slowed from 22.00% in FY24 to 10.05% in FY25 (AP p.9). The six-month figures include Unilet from July 2025 (AP p.10). Mobiles and IT products rose from 22.51% to 30.42% of sales while large appliances fell from 64.94% to 59.50% (AP p.4, AP p.5).

06Earnings quality

EBITDA rose each year, but profit fell in FY25: finance costs rose 68.28% to ₹829.15 million, with ₹479.65 million of interest on borrowings and ₹312.49 million on lease liabilities (DRHP p.411). EBITDA here is struck before interest on store lease liabilities, which is counted in finance costs instead of rent (AP p.9, DRHP p.411). Inventory rose from ₹3,448.61 million in March 2023 to ₹8,571.21 million in September 2025 (AP p.10). There are no auditor qualifications that have not been given effect in the restated accounts (AP p.12).

Other income was ₹111.12 million in FY25, 17.8% of profit before tax of ₹625.59 million (our arithmetic, DRHP p.77).

07The balance sheet

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

Borrowings and lease liabilities together were ₹13,487.00 million at September 2025, six times net worth (our arithmetic, AP p.8, AP p.11).

In FY25, return on capital employed was 19.64% and net debt was 2.65 times EBITDA (DRHP p.128). Net working capital days were 58 in FY25 (DRHP p.40).

08What the money is for

Source: AP p.7.

The fresh issue is of up to ₹3,000.00 million and the offer for sale of up to ₹3,000.00 million (DRHP p.72).

The company bought Unilet Appliances, which had 46 multi-brand and eight exclusive-brand outlets in Karnataka at January 2026, from Humayun Fiaz, Tarannum Humayun, Saima Humayun and Samreen Humayun for ₹1,400.00 million in four instalments (DRHP p.120). ₹700.00 million had been paid by the DRHP date and another ₹350.00 million is to come from internal accruals (AP p.7).

09Who is selling

Source: AP p.1.

10Promoters

The promoters are Johnson Asaria, J John Sathya and Charles Packiaraj (AP p.6). Johnson Asaria, chairman and managing director, co-founded the partnership firm Sathya Agencies in 1990 and has over 35 years in consumer-electronics retail (AP p.6). J John Sathya, whole-time director, has been a partner in the firm since 1995 and has over 30 years in the trade and over 20 in hospitality (AP p.6). Charles Packiaraj, whole-time director, has been a partner since 2001, has over 24 years in the trade and handles new store openings (AP p.6).

Remuneration to the three promoters together was ₹88.05 million in FY23 and ₹221.52 million in FY25 (our arithmetic, DRHP p.83, DRHP p.84).

11Who already owns it

Source: AP p.7, AP p.8.

The promoters hold 92.25% and the promoter group 5.67% (AP p.8).

12What changed just before the IPO

• Karnataka: Unilet acquired on 31 July 2025 for ₹1,400 million (AP p.10, DRHP p.120).
• Stores: 78 opened in six months, and 427 by January 2026 (AP p.5, AP p.9).
• Debt: borrowings up ₹1,653 million in six months (AP p.8).
• Tamil Nadu: down to 83.30% of revenue as other states grew (AP p.10).
• Share split: in February 2026 each share of ₹1,000 face value was split into shares of ₹2 (DRHP p.100).
• Bonus issue: in March 2026 the company issued eight bonus shares for every share held (DRHP p.100).
• Last allotment: the last allotment for cash was a rights issue of 4,500 shares at ₹1,000 each in March 2022 (DRHP p.100).
• Auditor: Samsudeen & Zubair vacated office as statutory auditor on completion of tenure and CNGSN & Associates LLP was appointed on September 30, 2024 (DRHP p.90).
• Public company: the company became a public limited company, with a fresh certificate of incorporation issued on March 6, 2026 (DRHP p.3).

13Capacity and expansion

Capacity here is store space: 1.81 million sq ft at September 2025, up from 0.84 million in March 2023 (AP p.10). 99.48% of stores are leased (AP p.11). Sales per sq ft were ₹24,708 in FY25, down from ₹26,265 in FY24 (AP p.10).

14Market size and industry structure

The CRISIL report cited in the offer document estimates India's consumer durables and electronics retail market at about ₹5,318 billion in FY25 and projects ₹8,400 to 8,800 billion by FY30; it puts the organised share at about 56.6% in FY25 and South India at 25 to 30% of the market (AP p.6). Those projections are CRISIL's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• The largest electronics-focused retail chain in South India by store count at March 2026, citing CRISIL (AP p.5).
• The largest in Tamil Nadu and fifth in India among peers by FY25 revenue, citing CRISIL (AP p.4).
• Reach in smaller cities (AP p.5).

Against that: dependence on Tamil Nadu, on ten brands and on physical stores, with heavy debt and lease obligations (AP p.10, AP p.11).

16Peers the company named

Source: DRHP p.127. The note to the table does not state the date of the share prices used (DRHP p.127).

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

17Risks, in plain words

• Tamil Nadu. 70% of stores and 83% of recent revenue (AP p.10).
• Footfall. Almost no online sales (AP p.10).
• Suppliers and brands. Ten suppliers were 71.32% of purchases (AP p.10, AP p.11).
• Inventory. Stock grew 2.5 times from March 2023 to September 2025 while stores grew 1.9 times (our arithmetic, AP p.9, AP p.10).
• Seasonality. Summer demand for air conditioners (AP p.11).
• Leases. 99.48% of stores rented (AP p.11).
• Debt. Finance costs exceeded profit in FY25 (DRHP p.411).

18Litigation and regulatory matters

Source: AP p.13.

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:

• Unilet's revenue and profit before and after the acquisition, in the pages read.
• Rent paid in cash, as distinct from lease accounting, in the pages read.
• What the criminal proceedings against promoters concern.
• The price date behind the peer P/E ratios.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. How much did Unilet earn before it was bought, and how was ₹1,400 million arrived at?
2. What does the company pay in rent each year, and how does EBITDA look after rent?
3. Why did same-store sales growth halve in FY25?
4. How long does a new store take to break even?
5. What do the criminal proceedings against promoters concern?

2Sources and cited facts

This study was read from 2 documents the company filed. The 69 figures it cites are listed under the document each came from, with the page and the sentence as printed.