Tonbo Imaging India Limited IPO

01At a glance

What the company does — designs electro-optical and infrared systems for armed forces and security agencies: hand-held and weapon-mounted thermal sights, driver-vision and 360-degree awareness systems, gimbals, fire-control systems and missile seekers, and it is developing a loitering munition and a high-power microwave anti-drone system (AP p.3).

Who pays it — armed forces, police and paramilitary forces in India and abroad; its customers have included NATO forces and U.S. Special Operations Command (AP p.3). The top five customers were 53.03% of FY26 revenue and 86.36% in FY25 (AP p.4).

Why it is raising money — it is not. The offer is entirely a sale by existing shareholders (AP p.6).

How fast it has grown — unevenly: revenue was ₹4,282 million in FY24, ₹4,691 million in FY25 and ₹3,626 million in FY26 (AP p.8).

The one thing to understand — revenue swings with a handful of defence contracts. Europe was 65.34% of FY25 revenue and 0.13% of FY26; India rose from 33.49% to 93.06% (AP p.4). Working capital stretched to 517 days of revenue in FY26 (AP p.8).

02The business, in plain words

A defence-electronics designer builds imaging and targeting equipment to military specifications, wins orders through tenders from armies and defence manufacturers, and has the production done by contract electronics makers. Orders are large, lumpy and paid for slowly, and each one can make or break a year.

An army needs thermal weapon sights → it runs a tender, which Tonbo wins → Tonbo's Bengaluru R&D centre finalises the design and contract manufacturers build the units → Tonbo delivers, and is paid after acceptance.

Pilot units are made at the Bengaluru R&D centre; large-scale manufacturing is outsourced to Kaynes Technology India and Avalon Technology and Services under non-exclusive agreements (AP p.4).

Earnings equation: Revenue ≈ order book executed in the year. The confirmed order book was ₹2,790.16 million at March 2026 (AP p.8).

03Where the money comes from

Source: AP p.4. "Other" is our arithmetic, including other operating revenue.

Source: AP p.8.

04The growth record

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

Source: AP p.8.

05What the growth is made of

Contracts, not trend. Revenue grew 342% in FY24, 9.55% in FY25 and fell 22.69% in FY26 (AP p.8). The international order book fell from ₹3,035.53 million to ₹59.03 million in FY25 as European orders were delivered and not replaced, and export share of revenue fell from 65.52% to 5.57% (AP p.8). Platform systems — gimbals, fire control, seekers — grew from ₹127 million to ₹1,448 million over two years, while tactical systems fell (AP p.8).

06Earnings quality

Working capital is the concern. Working capital days rose from 152 in FY24 to 280 in FY25 and 517 in FY26 (AP p.8). A company whose receivables and inventory equal well over a year of revenue has its profit tied up in unpaid bills and stock. The document names cyclical, tender-driven procurement with poor revenue visibility as its first risk (AP p.9). Return on equity fell from 52.72% in FY24 to 9.75% in FY26 (AP p.8).

07The balance sheet

Source: AP p.7.

Net worth more than doubled in FY25, more than that year's profit, from share issues; share capital rose from ₹2.99 million to ₹114.56 million over two years, including a bonus issue and split (AP p.7).

08What the money is for

Nothing, for the company. The offer is entirely a sale by shareholders, who receive the proceeds after expenses (AP p.6).

09Who is selling

Source: AP p.1, AP p.2. Other investors, including Timothy Guy Mitchell and Artiman Partners, make up the rest of 18,085,246.

The largest single offer, 10,164,500 shares, equals CEAQ India's entire holding (AP p.1, AP p.6).

10Promoters

The promoters are Arvind Kondangi Lakshmikumar, Ankit Kumar, executive director and chief business and revenue officer, and Cecilia D'Souza (AP p.5). Together they hold 17.42% before the offer (AP p.6, our arithmetic).

11Who already owns it

Source: AP p.6.

Outside investors — the two CEAQ entities and HBL Engineering — hold a majority, 58.76% between them (AP p.6, our arithmetic).

12What changed just before the IPO

• Loss of European business — Europe fell from 65% of revenue to almost nothing in FY26 (AP p.4).
• Order book — rebuilt to ₹2,790 million, mostly platform systems (AP p.8).
• Capital — bonus issue and split raised share capital to ₹114.56 million (AP p.7).

13Capacity and expansion

The company is asset-light: pilot builds in Bengaluru, volume production by Kaynes and Avalon (AP p.4). New products in development are a loitering munition and the WaveStrike microwave anti-drone system (AP p.3). The company receives no money from the offer to fund them (AP p.6).

14Market size and industry structure

India's defence spending is forecast to rise from $96.0 billion in FY26 to $113.6 billion by FY30, according to the Frost & Sullivan report cited in the offer document; the FY26 defence budget included ₹1,92,388 crore of capital outlay (AP p.5). Those forecasts are Frost & Sullivan's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• Proprietary technology from in-house R&D (AP p.4).
• Acceptance abroad — customers have included NATO forces and U.S. Special Operations Command (AP p.3).
• A broad range across tactical, platform and anti-drone systems (AP p.3).

Against that: tender-based sales with poor visibility, heavy customer concentration and very long working-capital cycles (AP p.4, AP p.8, AP p.9).

16Peers the company named

The peer comparison was not read for this study. For Tonbo the document gives FY26 earnings per share of ₹9.19 basic and ₹8.88 diluted and net asset value per share of ₹96.57 (AP p.7). No P/E is possible for the company until a price band is set.

17Risks, in plain words

• Lumpy contracts. Revenue depends on a few tenders a year (AP p.9).
• Customer concentration. The top five customers were 86% of FY25 revenue (AP p.4).
• Working capital. 517 days in FY26 (AP p.8).
• Export dependence. Export share swung from 66% to 6% in a year (AP p.8).
• Outsourced production. Two contract manufacturers build the volume units (AP p.4).

18Litigation and regulatory matters

The litigation summary was not read in detail for this study.

19Related-party transactions

HBL Engineering is a 14.25% shareholder (AP p.6). Transactions with it, if any, 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:

• Why European orders stopped after FY25.
• What makes up the 517 days of working capital — receivables, inventory or both.
• Development costs and timelines for the loitering munition and WaveStrike.
• Customer names behind the top-five concentration.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. Why did European revenue fall from ₹3,065 million to ₹5 million, and is any European business expected back?
2. How much of FY26 revenue is still unpaid, and from which customers?
3. When does the company expect to deliver the ₹2,790 million order book?
4. How are development of the loitering munition and WaveStrike being funded, given the company receives nothing from the offer?
5. Does the company do business with HBL Engineering, its 14% shareholder?

1Sources and cited facts

This study was read from 1 document the company filed. The 35 figures it cites are listed under the document each came from, with the page and the sentence as printed.