Vardhman Appliances Limited IPO

01At a glance

What the company does: contract manufacturing (OEM, to the customer's design, and ODM, to its own design) of fans, kitchen appliances, home comfort appliances such as irons and heaters, and components such as heating elements, motors and thermostats, for consumer appliance brands; its wholly owned subsidiary Lazer India Private Limited sells appliances under the "Lazer" brand (AP p.4).

Who pays it: appliance brands, mainly. Sales to consumer appliance brands were 77.19% of FY26 revenue (DRHP p.222). The largest customer, Usha International Limited, gave 28.38% of FY26 revenue, and the top ten gave 65.62% (DRHP p.410, DRHP p.411). The document also names RR Kabel, Voltbek Home Appliances (Voltas Beko), Singer India, GM Elektra and Cello World as customers (AP p.5).

Why it is raising money: ₹120.0 crore towards a ₹175.0 crore new plant at Baghpat, Uttar Pradesh, and ₹70.0 crore to repay borrowings of the company and of Lazer India, with the rest of the fresh issue for general corporate purposes (DRHP p.121, DRHP p.122).

How fast it has grown: revenue from ₹758.5 crore in FY24 to ₹869.6 crore in FY26, a CAGR of 7.1%; profit after tax from ₹21.8 crore to ₹22.5 crore, a CAGR of 1.5% (our arithmetic, DRHP p.83). Profit fell to ₹18.5 crore in FY25 in between (DRHP p.83).

The one thing to understand: this is a thin-margin, working-capital-heavy manufacturer. EBITDA margin was 5.98% in FY26 (DRHP p.387). Operating cash flow fell from ₹42.6 crore in FY24 to ₹1.5 crore in FY26 as inventories and receivables grew, and borrowings rose from ₹80.0 crore to ₹122.2 crore (DRHP p.84, DRHP p.82).

02The business, in plain words

Vardhman Appliances began in 1983 as a Delhi partnership making electric fans, and became a public limited company in August 2023 (DRHP p.253, DRHP p.252). It now runs five factories, three at Kundli in Sonipat, Haryana and two at Baddi in Solan, Himachal Pradesh, across about 405,790 square feet (AP p.5). The document calls itself a vertically integrated Electronics Manufacturing Services (EMS) company (AP p.4).

An appliance brand wants a mixer grinder or a table fan on its shelves → it places purchase orders with Vardhman under a three to five year supply agreement → Vardhman moulds, winds, fabricates and assembles the product in Kundli or Baddi → the brand pays on terms of 45 to 90 days.

Supply agreements usually carry no minimum purchase commitment, and customer forecasts are non-binding (DRHP p.34). Payment terms generally run 45 to 90 days (DRHP p.44). Many parts are made in-house: heating elements, motor winding, precision moulding, thermostats and powder coating (DRHP p.232).

The second leg is Lazer India, bought from the promoters in September 2024 through a share swap (DRHP p.257). Lazer had over 600 SKUs, over 700 distributors and 14 company-owned branches as of July 31, 2026, and also sells to police departments, army canteens and ministries (DRHP p.222). Sales through dealers and distributors were 18.97% of FY26 revenue (DRHP p.222).

Earnings equation: Revenue ≈ units made for brands × price per unit + Lazer branded sales, and Profit ≈ revenue − materials (74.01% of total income in FY26) − wages − job work and freight − interest. Cost of materials consumed was ₹646.9 crore in FY26 (DRHP p.400, DRHP p.83). The document gives units produced but not price per unit.

03Where the money comes from

Source: DRHP p.35, DRHP p.36. The document explains the FY26 fall in fans by an extended winter and monsoon (DRHP p.36).

Source: DRHP p.410, DRHP p.411, DRHP p.34. Customer names beyond those printed are withheld for lack of consent (DRHP p.411).

By channel, sales to consumer appliance brands were 79.16% of revenue in FY24 and 77.19% in FY26; dealers and distributors 16.55% and 18.97% (DRHP p.222). Repeat customers gave 72.96% of FY26 revenue (DRHP p.222). Exports, all to Nepal through Lazer, were ₹3.5 crore, 0.40% of FY26 revenue (DRHP p.228).

By state, Haryana gave 48.38% of FY26 revenue, Punjab 14.83% and Uttar Pradesh 13.26% (DRHP p.38). The same page says these three states gave 90.24% of revenue; the rows it prints add to 76.47% (our arithmetic, DRHP p.38).

Revenue depends on a few customers, in numbers: two customers gave 45.78% of FY26 revenue, and ten gave 65.62% (our arithmetic, DRHP p.410, DRHP p.411).

04The growth record

Source: DRHP p.83, DRHP p.84, DRHP p.82, DRHP p.386, DRHP p.387.

Revenue from operations rose from ₹758.5 crore in FY24 to ₹869.6 crore in FY26, and profit after tax from ₹21.8 crore to ₹22.5 crore (DRHP p.83). Revenue CAGR FY24 to FY26 was 7.1%, EBITDA CAGR 6.0% and PAT CAGR 1.5% (our arithmetic, DRHP p.83, DRHP p.387); the company itself states a revenue CAGR of 7.07% (DRHP p.222). EBITDA margin moved from 6.10% in FY24 to 5.98% in FY26, down 12 basis points (DRHP p.387). FY25 profit included an exceptional loss of ₹1.1 crore, the uninsured part of a fire at a Lazer warehouse in Ghaziabad (DRHP p.48).

Operating cash flow was ₹1.5 crore in FY26, against ₹42.6 crore in FY24 (DRHP p.84). Trade receivable days rose from 55 in FY24 to 56 in FY25 and 69 in FY26 (DRHP p.44). Other income was ₹4.4 crore in FY26, 14.0% of profit before tax of ₹31.1 crore (our arithmetic, DRHP p.83), mostly interest recovered from customers and interest on bank deposits (DRHP p.399).

At 31 March 2026 borrowings of ₹122.2 crore less cash and cash equivalents of ₹16.1 crore left net debt of ₹106.2 crore, 2.0 times FY26 EBITDA (our arithmetic, DRHP p.82, DRHP p.387). The document gives a debt to equity ratio of 1.22 for FY26, against 1.77 for FY24 (DRHP p.229). RoCE was 24.01% in FY26 (DRHP p.387).

The restated figures combine the predecessor partnership, the company after incorporation, and businesses acquired under common control as if they had always been one (DRHP p.58). FY24 revenue appears as ₹7,585.39 million in the financial statements and as ₹7,586.39 million in the product table (DRHP p.83, DRHP p.36).

05What the growth is made of

Revenue rose from ₹758.5 crore in FY24 to ₹869.6 crore in FY26 (DRHP p.83). Units produced across all factories rose from 14,267,733 in FY24 to 18,128,712 in FY26, up 27.1%, while revenue rose 14.6% (our arithmetic, DRHP p.231, DRHP p.83). The unit count mixes products as different as a thermostat and a ceiling fan, so revenue per unit is not a meaningful price.

In FY26 the company attributes the 4.03% rise in revenue to higher order volumes from key customers (DRHP p.399). Kitchen appliances rose 22.69% and fans fell 13.65% (DRHP p.399). In FY25, the rise in fans from ₹239.5 crore to ₹336.8 crore did most of the work (DRHP p.35).

Some of the FY24 to FY26 picture also reflects businesses brought in from promoter-linked entities: the Quality Industries appliance business from April 2024 and assets of Vardhman Home Appliances Limited from October 2024 (DRHP p.256, DRHP p.257). The restated figures present these as if held throughout (DRHP p.58).

The offer document does not disclose prices or volumes by product, so the increase cannot be separated into volume and price.

06Earnings quality

The one that needs explaining is FY26 cash. Operating profit before working capital changes was ₹57.3 crore, but inventories absorbed ₹40.8 crore and receivables ₹36.5 crore, offset by ₹27.3 crore more owed to suppliers, and tax took ₹8.4 crore (DRHP p.84). The document ties the inventory build to work in progress of ₹74.5 crore and finished goods of ₹55.3 crore held "in anticipation of scheduled customer deliveries" (DRHP p.400). Finance cost rose to ₹15.2 crore, with bill discounting interest of ₹9.4 crore (DRHP p.400).

07The balance sheet

Source: DRHP p.82. Trade payables are the sum of dues to micro and small enterprises and to others (our arithmetic, DRHP p.82).

Of FY26 borrowings, ₹116.8 crore were current and ₹5.4 crore non-current; lease liabilities were a further ₹21.1 crore (our arithmetic, DRHP p.82). At 31 August 2026 the group's borrowings were ₹141.9 crore (DRHP p.43): ₹99.8 crore in the company and ₹42.1 crore in Lazer India (DRHP p.131, DRHP p.134).

The company says the ₹70.0 crore repayment from the proceeds would take borrowings from ₹141.9 crore to ₹71.9 crore, counting only that use of the proceeds (DRHP p.136). The rest of the post-issue balance sheet cannot be drawn until the price is set.

Contingent liabilities and commitments were ₹18.7 crore at March 2026, of which ₹6.7 crore are litigation claims not acknowledged as debts, ₹9.9 crore unutilised letters of credit and ₹1.0 crore guarantees (DRHP p.85). The company has also guaranteed Lazer India's working capital lines of ₹30.0 crore with YES Bank and ₹3.0 crore with ICICI Bank, secured on its Kundli factory at plot 118 (DRHP p.54).

08What the money is for

Source: DRHP p.121. Percentages are our arithmetic on the ₹250.0 crore fresh issue (DRHP p.79). General corporate purposes may not exceed 25% of gross proceeds (DRHP p.121).

Baghpat plant: total cost ₹175.0 crore per a TEV report dated September 28, 2026 by Atlas Financial Research & Consulting (DRHP p.122). Land of ₹31.8 crore was bought on September 28, 2026 from internal accruals; a further ₹23.2 crore is to come from internal accruals and ₹120.0 crore from the issue, ₹70.0 crore in FY28 and ₹50.0 crore in FY29 (DRHP p.125, DRHP p.121). The rest of the cost is civil works ₹73.1 crore, plant and machinery ₹52.6 crore, furniture, IT and utilities ₹14.1 crore and contingency ₹3.4 crore (DRHP p.125). No orders have been placed (DRHP p.124). Commercial production is scheduled for February 2029 (DRHP p.131).

Debt: the company's lenders are YES Bank and ICICI Bank, at 8.16% to 8.50% on the lines listed (DRHP p.133). Lazer India's include a ₹2.0 crore unsecured loan from Oxyzo Financial Services at 13.75% (DRHP p.135).

The company may place up to ₹50.0 crore of shares before the red herring prospectus, which would reduce the fresh issue by that amount (DRHP p.79).

Into the business: ₹250.0 crore fresh issue, before expenses (DRHP p.79). To selling shareholders: 2,50,04,200 existing shares; rupee amount not yet stated (DRHP p.79).

At DRHP stage the offer for sale is a share count, not an amount.

09Who is selling

The offer is a fresh issue of up to ₹250.0 crore and an offer for sale of up to 25,004,200 shares (DRHP p.79).

Source: DRHP p.80, DRHP p.107. The percentages are our arithmetic.

The promoters together offer 18,488,700 shares and the fund all 6,515,500 of its shares (our arithmetic, DRHP p.80). The certified average cost of acquisition is ₹2.82 a share for each promoter and ₹32.23 for the fund, after the share split (DRHP p.109).

The fund is managed by a step-down subsidiary of Pantomath Capital Advisors Private Limited, one of the two book running lead managers; for that reason Pantomath will only market the offer (DRHP p.118).

10Promoters

The eight promoters are Parmod Kumar Jain, Subodh Kumar Jain, Vinod Kumar Jain, Piyush Jain, Akhil Jain, Siddharth Jain, Sambhav Jain and Vineet Jain, who together hold 95.35% (DRHP p.112). The document states that Parmod Kumar Jain, Subodh Kumar Jain and Vinod Kumar Jain are brothers; that Piyush Jain is the son of Parmod Kumar Jain, Siddharth Jain the son of Subodh Kumar Jain, and Sambhav Jain and Vineet Jain the sons of Vinod Kumar Jain (DRHP p.267). The document also lists Akhil Jain as a son of Parmod Kumar Jain in the promoter group table (DRHP p.289).

Parmod Kumar Jain, Chairman and Managing Director, has more than 43 years in domestic appliances (AP p.6). Piyush Jain is Joint Managing Director; Siddharth Jain, Sambhav Jain and Vineet Jain are Executive Directors (AP p.13). Subodh Kumar Jain and Vinod Kumar Jain stepped down as executive directors, and Akhil Jain as a non-executive director, on January 19, 2026 (DRHP p.269); Subodh Kumar Jain now holds the title President, Fans and Vinod Kumar Jain President, Appliances (AP p.7).

Pay: remuneration to the eight promoters, including the two brothers' pay as relatives after January 20, 2026, was ₹3.9 crore in FY24 and ₹6.6 crore in FY26 (our arithmetic, DRHP p.86). Parmod Kumar Jain received ₹1.6 crore in FY26 against ₹0.9 crore in FY24 (DRHP p.86). The executive directors' salary cap is ₹0.50 million a month for FY27, rising to ₹0.78 million for FY29 (DRHP p.269).

Other interests: the group company is Vardhman Home Appliances Limited, in a similar line of business but with no material operations at present (DRHP p.436, DRHP p.437). Piyush Jain and Siddharth Jain are partners of Quality Industries, which sold its appliance business to the company for ₹1.0 crore (DRHP p.256). Related-party transactions totalled ₹56.9 crore in FY26, 6.51% of revenue (DRHP p.55).

Litigation and pledges: the summary table counts 8 criminal proceedings and 1 material civil matter against the promoters (AP p.14). They include a criminal complaint in Kolkata against Piyush Jain and Parmod Kumar Jain arising from a cheque dispute between Quality Industries and Khaitan Electricals Limited, stayed by the Calcutta High Court and subject to a ₹4.0 crore settlement by Quality Industries (DRHP p.420, DRHP p.421). No promoter shares are pledged (DRHP p.115).

Promoter economics: the promoters received 26,000,000 shares of ₹10 at ₹10 in 2023 on conversion of their ₹26.0 crore partnership capital, and 722,021 more at ₹161.16 in September 2024 in exchange for their Lazer India shares (DRHP p.102, DRHP p.103). No promoter bought or sold shares in the six months before filing (DRHP p.115).

11Who already owns it

Source: DRHP p.107. The company has nine shareholders (DRHP p.112).

The fund came in on June 5, 2024 through a private placement of 1,303,100 shares at ₹161.16, ₹32.23 after the split (DRHP p.102, DRHP p.109). No promoter group member other than the promoters holds shares (DRHP p.112).

After the offer for sale alone, before any fresh shares, the promoters would hold 115,121,405 shares, 82.2% of today's 140,125,605 (our arithmetic, DRHP p.80, DRHP p.107). The fresh issue will dilute that further by a number of shares fixed only with the price; the promoter holding after the issue is therefore not yet known (DRHP p.112).

12What changed just before the IPO

• Public company: the partnership converted into Vardhman Appliances Limited, with a certificate of incorporation dated August 7, 2023 (DRHP p.252).
• Businesses brought in: Quality Industries' appliance business from April 2024 for ₹1.0 crore, and assets of Vardhman Home Appliances Limited from October 2024 for ₹6.7 crore, both promoter-linked (DRHP p.256, DRHP p.257).
• Private placement: 1,303,100 shares at ₹161.16 to the India Inflection Opportunity fund on June 5, 2024 (DRHP p.102).
• Last allotment: 722,021 shares at ₹161.16 on September 28, 2024, issued to the promoters for their Lazer India shares (DRHP p.102).
• Share split: each ₹10 share was split into five of ₹2 under resolutions of September 4 and 7, 2026 (DRHP p.103).
• Auditors: Salil & Co resigned on January 8, 2026, citing pre-occupation; Pawan Shubham & Co. was appointed on March 26, 2026 to fill the vacancy (DRHP p.95).
• Board: Subodh Kumar Jain, Vinod Kumar Jain and Akhil Jain left the board on January 19, 2026, and Suresh Jain joined as an independent director in May 2026 (DRHP p.269).
• Customers: the largest customer's share fell from 36.13% of revenue in FY24 to 28.38% in FY26 (DRHP p.411, DRHP p.410), and the top ten from 73.83% to 65.62% (DRHP p.34).
• Working capital: receivable days rose from 55 to 69 and inventory days from 68 to 95 (DRHP p.44, DRHP p.47).
• Land: the Baghpat site was bought for ₹31.8 crore two days before the DRHP (DRHP p.125).

13Capacity and expansion

Source: DRHP p.231, certified by an independent chartered engineer.

Utilisation varies widely by product. In FY26 thermostats and cutouts ran at 84.15% and electric irons at Baddi at 73.60%, while air fryers ran at 31.01% and room heaters at Kundli Unit II at 25.07% (DRHP p.230, DRHP p.231).

The Baghpat plant would lift installed capacity to 39,216,000 units a year, adding lines for irons, thermostats, heating elements, fans, kettles and air fryers, and new products such as air coolers, air purifiers, chimneys, washing machines and motors (DRHP p.124). Commercial production is scheduled for February 2029 (DRHP p.131). The document does not project utilisation for the new plant.

14Market size and industry structure

As claimed: the 1Lattice "Domestic appliances industry report" dated September 28, 2026, commissioned and paid for by the company (DRHP p.29), puts the domestic appliances OEM market in India at ₹16,390 crore in FY26 and the ODM market at ₹5,740 crore (AP p.6). It puts the organised domestic appliances market at ₹46,980 crore in FY26, 76.9% of the total (DRHP p.170). Its projections to FY31 are 1Lattice's, and newboard has not tested them.

The part that is addressable: fans, kitchen appliances, home comfort appliances and components made for brands, which is the OEM and ODM market above, plus Lazer's branded sales, which compete in the wider market.

What the company is today: FY26 revenue of ₹869.6 crore set against the combined ₹22,130 crore OEM and ODM market is 3.9% (our arithmetic, DRHP p.83, AP p.6). The comparison is loose, because Lazer's branded sales and component sales sit in the revenue figure.

Structure, per the commissioned report: the market is formalising under BIS and quality control order requirements, and the unorganised share is 23.1% (DRHP p.170). Imported raw materials were 5.58% of purchases in FY26 (DRHP p.38). The company names Elin Electronics, EPACK Durable, Wonder Electricals, PG Electroplast and IKIO Technologies as key competitors (DRHP p.54).

15Competitive position

Source: DRHP p.142. Borrowings are not given for the peers. The overlap column is newboard's reading of the names; the document does not describe each peer's business.

What the document claims, and what it rests on:

• Length of relationships: more than 40 years with Usha International, more than 10 with Singer India (DRHP p.223).
• Two routes to market: OEM and ODM work for brands, and Lazer's own distribution (DRHP p.222).
• In-house parts: heating elements, motors, thermostats and moulding made internally (DRHP p.232).

The document gives no evidence of pricing power. It spent ₹4.1 crore on design and product development in FY26, including capital expenditure (DRHP p.41).

16Peers the company named

Peers named in the offer document: Elin Electronics Limited, EPACK Durable Limited, Wonder Electricals Limited, IKIO Technologies Limited and PG Electroplast Limited (DRHP p.142).

• PG Electroplast is about six times Vardhman's size by total income (our arithmetic, DRHP p.142), with a P/E of 77.59 on September 18, 2026 (DRHP p.142).
• EPACK Durable is about twice the size, with a profit margin of 0.17% and a P/E of 526.00 (DRHP p.142).
• Elin Electronics has the lowest P/E in the set, 19.08 (DRHP p.141).
• Wonder Electricals and IKIO Technologies are smaller than Vardhman by total income, with P/Es of 107.26 and 43.17 (DRHP p.142).

The peers' average P/E is 154.62, pulled up by EPACK Durable (DRHP p.141). No P/E is possible for Vardhman until a price band is set. Its FY26 EPS is ₹1.60 and net asset value per share ₹7.17, both after the split (DRHP p.142).

17Risks, in plain words

• Customers. Usha International gave 28.38% of FY26 revenue (DRHP p.410) → supply agreements carry no minimum purchase commitment (DRHP p.34) → the top two customers together gave 45.78% (our arithmetic, DRHP p.410, DRHP p.411).
• Cash. Operating cash flow fell to ₹1.5 crore in FY26 (DRHP p.84) → growth ties up cash in stock and receivables → inventory days rose to 95 and receivable days to 69 (DRHP p.47, DRHP p.44).
• Margin. EBITDA margin was 5.98% in FY26 (DRHP p.387) → a small change in material costs moves profit sharply, as materials were 74.01% of total income (DRHP p.400) → interest cover was 2.76 times (DRHP p.387).
• Season. Fans fell from ₹336.8 crore in FY25 to ₹290.8 crore in FY26 on weather (DRHP p.36) → cooling and heating demand both depend on the season.
• Quality. Sales returns were ₹31.0 crore, 3.57% of FY26 revenue, and repair and claim costs ₹5.1 crore (DRHP p.36). A former customer claims ₹5.8 crore in arbitration over allegedly defective induction cooktops, which the company disputes (DRHP p.418).
• Geography. Haryana, Punjab and Uttar Pradesh gave 76.47% of FY26 revenue by the state table (our arithmetic, DRHP p.38).
• Workforce. Attrition of permanent employees was 28.35% in FY26 (DRHP p.58).
• Compliance. Statutory dues were paid late in FY26, including GST of ₹1.6 crore by one day and TDS in 38 instances by up to 214 days (DRHP p.46).
• Issue-specific. The promoters' average cost is ₹2.82 a share (DRHP p.109). The selling fund is managed by an affiliate of a lead manager (DRHP p.118). The plant has no orders placed and is scheduled for February 2029 (DRHP p.124, DRHP p.131).

18Litigation and regulatory matters

Source: DRHP p.418, DRHP p.419, DRHP p.420, DRHP p.421, DRHP p.423.

The summary table gives ₹8.5 crore as the aggregate of quantified matters against the company and ₹7.6 crore for matters it has brought (AP p.14). The company faces 2 tax proceedings (AP p.14). Parmod Kumar Jain is also named, as president of a trust, in a civil suit over the trust's administration (DRHP p.421). The materiality threshold for disclosure is ₹1.0 crore (DRHP p.417). There are no litigations against directors other than the promoters (DRHP p.422).

19Related-party transactions

Source: DRHP p.86, DRHP p.87, DRHP p.88, DRHP p.89, DRHP p.55.

Quality Industries, whose appliance business the company took over, remains a supplier: ₹28.5 crore of raw materials and assets in FY26, 3.28% of revenue (DRHP p.88). It also billed ₹1.9 crore of other expenses in FY26, a new line (DRHP p.88). In FY26 Vardhman Home Appliances Limited lent the company ₹6.5 crore, which was repaid in the same year (DRHP p.88). Unsecured loans from Parmod Kumar Jain of ₹6.5 crore and Akhil Jain of ₹0.5 crore were outstanding at March 2026 (DRHP p.89). Legal fees of ₹0.1 crore went to Singhania & Co., where independent director Apeksha Lodha is a partner (DRHP p.88).

20What the offer document does not say

• Names of eight of the top ten customers, withheld for lack of consent (DRHP p.411).
• Prices or margins by product or by customer, so growth cannot be split into volume and price.
• Why three states are said to give 90.24% of revenue when the state rows add to 76.47% (DRHP p.38).
• Lazer India's own revenue and profit, in the pages read; the group company's financials are placed on the company's website, not in the document (DRHP p.436).
• Expected utilisation or revenue from the Baghpat plant.
• Which subsidy option the company will take under the Uttar Pradesh policy (DRHP p.125).
• The price band, the offer for sale amount, the number of fresh shares and the post-offer holdings, normal at DRHP stage (DRHP p.79).

21Five questions for management

1. What share of Usha International's and the second customer's volumes is under contract for FY27, and at what pricing terms?
2. Why did inventory days rise from 68 to 95, and how much of the FY26 stock was committed to specific orders?
3. What utilisation does the Baghpat plant need to cover its depreciation and interest, given the existing plants ran at 63.25%?
4. Which three states make up the 90.24% figure, and how does it reconcile with the state table?
5. On what terms does Quality Industries, owned by two promoters, continue to supply ₹28.5 crore a year?

2Sources and cited facts

This study was read from 2 documents the company filed. The 168 figures it cites are listed under the document each came from, with the page and the sentence as printed.