ACE Furnaces Limited IPO

01At a glance

What the company does: designs, engineers, fabricates, supplies, installs, commissions and maintains customised industrial furnaces used to reheat and heat-treat ferrous and non-ferrous metal, under four product lines: bell, reheat, heat-treatment and soaking pit furnaces (DRHP p.165, DRHP p.168).

Who pays it: business customers only, in construction, power generation, automobiles and auto components, metals, defence and consumer durables, plus engineering and turnkey contractors (DRHP p.172, DRHP p.187). The top five customers brought 42.60% of FY26 revenue and the top ten 64.68% (DRHP p.37). No customer is named.

Why it is raising money: ₹12.0 crore of the fresh issue goes to working capital and ₹4.0 crore to repaying an ICICI Bank overdraft; the general corporate purposes amount is blank (DRHP p.97). The three promoters offer 5,40,000 shares for sale (DRHP p.62).

How fast it has grown: revenue from ₹81.2 crore in FY24 to ₹100.8 crore in FY26, about 11.4% a year, and profit after tax from ₹3.0 crore to ₹8.6 crore, about 68.2% a year (our arithmetic, DRHP p.65).

The one thing to understand: profit rose faster than cash. Operating cash flow was −₹3.8 crore in FY26 against ₹8.6 crore of profit, as trade receivables rose to ₹26.9 crore and advances from customers fell (DRHP p.66, DRHP p.64). Over the three years the company earned ₹16.7 crore of profit and its operations used ₹1.3 crore of cash (our arithmetic, DRHP p.65, DRHP p.66).

02The business, in plain words

What Ace Furnaces does

Ace Furnaces builds large industrial ovens. Steel and metal plants use them to heat billets and slabs before rolling or forging, or to heat finished parts in a controlled cycle that changes their hardness and strength (DRHP p.165, DRHP p.169). Each furnace is made to order: the size, fuel, temperature, atmosphere and handling system follow the customer's plant (DRHP p.30). The company also revamps old furnaces, converts them to other fuels, adds heat recovery, and sells spares and service (DRHP p.176).

A steel, auto-component, power-equipment or defence plant needs a furnace → the company designs it and quotes → it buys steel plate, refractory bricks, burners, controls and, for bell furnaces, water-cooled motors from Germany or France → it fabricates the structure at Ambernath, with job workers in busy periods → it ships the furnace in modules, erects and commissions it on site → it is paid in milestones, part on dispatch and the rest after installation and trial run (DRHP p.177, DRHP p.178, DRHP p.183, DRHP p.100).

The company was incorporated in February 2014 and became a public company in September 2026 (DRHP p.3). It has one manufacturing unit, about 1,078 square metres at G-50, Chikhloli MIDC, Ambernath West, taken on leave and licence from November 2025 to October 2028 (DRHP p.178, DRHP p.190). The plant and machinery listed are cutting, grinding, welding and rolling equipment, 69 items in all (DRHP p.182). It had 67 employees at August 31, 2026, 33 of them engineers by the business chapter's count (DRHP p.184, DRHP p.170).

An execution cycle runs six to twelve months: about four to six months to manufacture and dispatch, then two to three months to install and run trials (DRHP p.100). The standard warranty is 12 months from commissioning (DRHP p.186). Exports went to the USA, South Africa and Nepal in FY26, and earlier to Dubai, Egypt, Turkey, Malaysia and Ghana (DRHP p.171).

Earnings equation: Revenue = furnace projects completed × average contract value + spares and services. The company completed 35, 47 and 40 projects in FY24, FY25 and FY26 with aggregate contract values of ₹81.2 crore, ₹79.0 crore and ₹92.1 crore (DRHP p.169). The average value per order was ₹0.38 crore in FY24 and ₹0.70 crore in FY26 (DRHP p.112).

03Where the money comes from

By product, including spares (₹ crore):

Source: DRHP p.168, converted from ₹ lakh. Heat-treatment furnaces were 55.72% of revenue in FY25 and 13.96% in FY26, while bell furnaces went from 11.57% to 31.24%; soaking pit furnaces were new in FY26 at 13.28% (DRHP p.168, DRHP p.34).

By customer industry, FY26 revenue was 28.47% construction, 19.53% power generation, 16.40% automobiles and auto components, 15.14% metals, 13.27% defence and 7.18% consumer durables; construction was 39.47% in FY24 and defence nil (DRHP p.172). By place, Maharashtra was 33.65% of FY26 revenue, Haryana 21.32% and Punjab 10.54% (DRHP p.31). Exports were ₹9.7 crore, 9.58% of FY26 revenue, of which ₹8.4 crore went to the USA; they were 6.29% in FY24 (DRHP p.171). Repeat customers brought 22.00% of FY26 revenue against 13.14% in FY24 (DRHP p.39).

Ace Furnaces customers: how concentrated the revenue is

Source: DRHP p.37, as certified by the statutory auditor. Revenue does depend on a few customers: ten of them brought ₹65.2 crore of FY26 revenue of ₹100.8 crore (DRHP p.37). Because each order is a project, the names at the top change from year to year; the document does not name any customer or say how many of the top ten repeat across years.

On the supply side, the top ten suppliers were 52.07% of FY26 purchases and the largest 9.16% (DRHP p.37). Steel was 23.59% of FY26 purchases and imported materials 4.06% (DRHP p.31, DRHP p.38). There are no supply agreements; purchases are made on purchase orders (DRHP p.31).

04The growth record

Ace Furnaces financials: revenue, profit and margins

Source: DRHP p.65, DRHP p.66, DRHP p.64, DRHP p.112, converted from ₹ lakh. Revenue went from ₹81.2 crore in FY24 to ₹100.8 crore in FY26 and profit after tax from ₹3.0 crore to ₹8.6 crore (DRHP p.65). RoE here is on average equity; on year-end net worth the document gives 67.75%, 54.11% and 48.47% (DRHP p.110).

Our arithmetic over FY24 to FY26: revenue grew about 11.4% a year (our arithmetic, DRHP p.65), EBITDA about 64.8% a year (our arithmetic, DRHP p.112) and profit after tax about 68.2% a year (our arithmetic, DRHP p.65). EBITDA margin moved from 5.93% to 12.96%, up 703 basis points, so from 5.9% to 13.0% rounded (DRHP p.112).

The year ends on March 31 throughout. The restatement recomputed deferred tax, current tax and gratuity, which lowered FY25 profit by ₹0.25 crore and FY24 profit by ₹0.19 crore against the audited accounts (DRHP p.256). FY24 and FY25 were audited by Ashwini Singh & Associates and FY26 by Abhishek Kumar & Associates, with no qualifications (DRHP p.237, DRHP p.256).

What sits around the record:

• Cash: operating cash flow was −₹3.8 crore in FY26 (DRHP p.66), ₹4.3 crore in FY25 and −₹1.9 crore in FY24. In FY26 receivables absorbed ₹9.0 crore, payables fell by ₹3.9 crore and other current liabilities, mostly customer advances, by ₹2.7 crore, while inventory released ₹5.9 crore (DRHP p.66).
• Other income was ₹0.41 crore, about 3.5% of FY26 profit before tax of ₹11.8 crore (our arithmetic, DRHP p.65).
• Debt: borrowings were ₹6.9 crore at March 31, 2026 (DRHP p.64) and debt to equity 0.39 times, about 0.4× (DRHP p.112). Net of ₹2.9 crore of cash and bank balances, net debt of ₹4.1 crore was about 0.3× FY26 EBITDA (our arithmetic, DRHP p.64), though almost all of that cash is fixed deposits held as security (DRHP p.265). Return on capital employed was 50.30%, so 50.3% rounded (DRHP p.112).
• Customers and suppliers: the largest customer was 11.99% of FY26 revenue, so 12.0% rounded, the top five 42.60%, so 42.6%, and the top ten 64.68%, so 64.7% (DRHP p.37); the top ten suppliers were 52.07% of FY26 purchases, so 52.1% (DRHP p.37).
• Order book: ₹68.2 crore unexecuted at August 31, 2026, to be executed over six to twelve months (DRHP p.178).
• Receivables: ₹26.9 crore at March 2026, of which ₹5.2 crore had been outstanding for more than six months (DRHP p.265). Bad debts written off were ₹1.9 crore in FY26 against ₹0.19 crore in FY25 (DRHP p.33).
• Late statutory payments: GST was paid late twice in FY26 on ₹4.9 crore (DRHP p.48).
• Contingent liabilities: ₹2.7 crore at March 2026, mostly bank guarantees of ₹2.6 crore (DRHP p.67); a further ₹3.3 crore of guarantees was issued after the year end (DRHP p.67).
• Dividend: a final dividend of ₹2.25 a share was declared on September 17, 2026 (DRHP p.308); on 80,00,000 shares that is ₹1.8 crore (our arithmetic, DRHP p.308).
• Cases against promoters: no criminal or regulatory cases; two tax matters totalling ₹0.04 crore (DRHP p.43).
• Industry: the company places itself in industrial furnaces and thermal processing systems, a capital goods business (DRHP p.165).

05What the growth is made of

Revenue rose ₹19.6 crore from FY24 to FY26 (our arithmetic, DRHP p.65). The company attributes FY26 growth to a change in product mix, higher exports, and more business from Maharashtra, Haryana and Punjab, offset by lower revenue from West Bengal (DRHP p.296, DRHP p.297).

Products: bell furnaces added ₹22.8 crore, soaking pit furnaces ₹13.4 crore and reheat furnaces ₹7.6 crore, while heat-treatment furnaces fell ₹26.7 crore (our arithmetic, DRHP p.168).

Projects and order size: the number of projects completed went from 35 to 40, while aggregate contract value rose from ₹81.2 crore to ₹92.1 crore (DRHP p.169). Average value per order went from ₹0.38 crore to ₹0.70 crore (DRHP p.112).

Geography: exports rose from ₹5.1 crore to ₹9.7 crore, almost all of the FY26 figure from the USA (DRHP p.171). Maharashtra, Haryana and Punjab together went from ₹49.5 crore in FY25 to ₹66.0 crore in FY26 (DRHP p.297).

Margin: material cost fell from about 68.8% of revenue in FY24 to about 65.4% in FY26 (our arithmetic, DRHP p.65), and employee cost fell in FY26 as director pay dropped from ₹2.2 crore to ₹1.5 crore (DRHP p.268).

The document gives no tonnage, no furnace count by type and no prices, so the increase cannot be split into volume and price. That is the finding.

06Earnings quality

The item that needs explaining is receivables. They went from ₹17.9 crore at March 2025 to ₹26.9 crore at March 2026, and ₹5.2 crore had been due for more than six months (DRHP p.64, DRHP p.265). The company explains the longer cycle by milestone billing, customer certification, retention money and customers' sites not being ready (DRHP p.100). In the same year "Discount & Written off Balances" rose to ₹1.9 crore from ₹0.30 crore (DRHP p.269).

Two smaller items: the company keeps no invoice-level record of late payments to small suppliers, so interest due to them under the MSMED Act is not provided and is not quantified (DRHP p.253). And the EBITDA in the KPIs subtracts only interest income as non-operating, leaving export incentives and foreign exchange gains inside EBITDA (DRHP p.278, DRHP p.267).

07The balance sheet

At March 31, 2026 total assets were ₹43.9 crore: trade receivables ₹26.9 crore, inventories ₹5.1 crore, cash and bank balances ₹2.9 crore, fixed deposits held as security beyond twelve months ₹3.3 crore, advances to suppliers ₹2.8 crore and property, plant and equipment ₹2.6 crore (DRHP p.64, DRHP p.264). Against them: trade payables ₹10.5 crore, advances from customers ₹5.4 crore, short-term borrowings ₹5.3 crore, statutory payables ₹1.8 crore, long-term borrowings ₹1.7 crore and net worth ₹17.7 crore (DRHP p.64, DRHP p.263).

Of the gross block of ₹6.5 crore, motor cars are ₹2.5 crore, the leasehold office at Wagle Estate ₹1.7 crore and plant and machinery ₹0.23 crore (DRHP p.271). Borrowings at March 31, 2026 were an ICICI Bank overdraft of ₹5.0 crore at 9.00%, an ICICI term loan of ₹0.92 crore at 9.25% and two Mercedes-Benz car loans of ₹0.99 crore (DRHP p.287, DRHP p.104, DRHP p.274).

The bank facilities are secured on current assets, the Thane office, a Lonavala flat and fixed deposits, and guaranteed by the three promoters (DRHP p.104, DRHP p.274). An ECLGS loan of ₹1.0 crore was sanctioned on June 16, 2026, and bank guarantees outstanding rose from ₹2.6 crore at March 2026 to ₹8.9 crore at August 31, 2026 (DRHP p.287).

Source: DRHP p.64, DRHP p.97, DRHP p.309. The after-issue borrowings figure is our arithmetic on March 2026 balances (DRHP p.64, DRHP p.104); the capitalisation statement leaves the post-issue column blank (DRHP p.309). The overdraft to be repaid stood at ₹4.4 crore on August 31, 2026 (DRHP p.104).

08What the money is for

Ace Furnaces IPO objects: what the money is for

Source: DRHP p.97. The rupee size of the fresh issue depends on a price not yet set, so the share of each object cannot be worked out (DRHP p.3).

Working capital, ₹12.0 crore: ₹6.0 crore in FY27 and ₹6.0 crore in FY28 (DRHP p.98). The company's working capital gap was ₹4.3 crore, ₹6.0 crore and ₹16.9 crore at March 2024, 2025 and 2026; it projects ₹31.2 crore at March 2027 and ₹42.5 crore at March 2028 (DRHP p.101). The projection assumes receivable days stay at 97 and payable days fall to 33 and then 23, as the company plans to pay suppliers sooner (DRHP p.102, DRHP p.103).

Debt repayment, ₹4.0 crore: of the ICICI Bank overdraft sanctioned at ₹6.5 crore, carrying repo rate plus 3.75%, 9.00% on renewal, valid to March 17, 2027 (DRHP p.104). The company says there has been no default or rescheduling on it (DRHP p.104).

The objects have not been appraised by any bank or financial institution, and no monitoring agency is required because the offer is below ₹50.0 crore (DRHP p.98, DRHP p.75).

Into the business the fresh issue of up to 21,80,000 shares, at a price not yet set (DRHP p.3). To selling shareholders 5,40,000 shares from the three promoters, at a price not yet set (DRHP p.3).

09Who is selling

Ace Furnaces IPO offer for sale: who is selling

Source: DRHP p.62; the percentage is our arithmetic. The fresh issue is 21,80,000 shares, amount not set, and the offer for sale is 5,40,000 shares by three promoters, amount not set (DRHP p.3). The offer for sale is 5,40,000 of the 27,20,000 shares offered, about 19.9% of the offer (our arithmetic, DRHP p.3). The average cost of the sellers' shares is ₹0.63 for Kailash Vishnu Nasta, ₹6.25 for Rhea Kailash Nasta and ₹3.44 for Nitin Jagannath Phirake (DRHP p.91, AP p.1). The selling shareholders are Kailash Vishnu Nasta (promoter), 2,70,000 shares; Rhea Kailash Nasta (promoter), 2,16,000 shares; and Nitin Jagannath Phirake (promoter), 54,000 shares (DRHP p.62).

10Promoters

The promoters are Kailash Vishnu Nasta, Rhea Kailash Nasta and Nitin Jagannath Phirake, who together hold 99.99% of the company; four promoter group members hold 10 shares each (DRHP p.229, DRHP p.88). The document states that Kailash Vishnu Nasta and Rhea Kailash Nasta are husband and wife (DRHP p.232). The company was first promoted in 2014 by four other subscribers; the present promoters came in through share transfers and the 2015 rights issue (DRHP p.203, DRHP p.89).

Kailash Vishnu Nasta, 54, is Chairman and Managing Director, a mechanical engineer described as having over 32 years in industrial furnaces, a director since August 2014 (DRHP p.214). Nitin Jagannath Phirake, 53, is Whole Time Director, holds a diploma in mechanical engineering and is described as having 30 years in furnaces and heat treatment, also a director since 2014 (DRHP p.214). Rhea Kailash Nasta, 51, is Whole Time Director, a physiotherapy graduate with about nine years in healthcare, who joined the board on April 2, 2025 and is involved in management and day-to-day activities (DRHP p.214).

Pay: remuneration to the three promoters was ₹0.66 crore in FY24 and ₹1.50 crore in FY26 (DRHP p.281). From FY27 the approved pay is ₹1.15 crore a year for Kailash Vishnu Nasta, up to ₹2.30 crore; ₹0.38 crore for Rhea Kailash Nasta, up to ₹0.80 crore; and ₹0.35 crore for Nitin Jagannath Phirake, up to ₹0.70 crore (DRHP p.216). Two relatives drew salaries in FY26 of ₹0.12 crore and ₹0.02 crore (DRHP p.281).

Other businesses: Kailash Vishnu Nasta and Nitin Jagannath Phirake hold no other directorships (DRHP p.229, DRHP p.230). Rhea Kailash Nasta has a proprietorship, Kataria Vision, and the promoter group includes I Sight Eyecare and Surgery Private Limited (DRHP p.230, DRHP p.233). The company has no group companies under its materiality policy (DRHP p.323).

Guarantees and loans: the promoters guarantee the ICICI Bank facilities (DRHP p.104). Loans from directors stood at ₹0.99 crore at March 2024 and were repaid in full during FY25 (DRHP p.281, DRHP p.262). No promoter shares are pledged (DRHP p.91).

Cases: no criminal or regulatory cases against the promoters (DRHP p.312). Kailash Vishnu Nasta has a disputed income tax demand of ₹0.04 crore for AY 2012-13 and a 2018 notice on a ₹19,200 salary mismatch (DRHP p.313).

Promoter economics: the average cost of the promoters' shares is ₹0.63 for Kailash Vishnu Nasta, ₹6.25 for Rhea Kailash Nasta and ₹3.44 for Nitin Jagannath Phirake (DRHP p.91). Kailash Vishnu Nasta paid ₹0.25 crore in all for 25,000 shares of ₹100 at par, between 2014 and 2016 (DRHP p.89, DRHP p.90).

On April 2, 2025 Rhea Kailash Nasta bought 20,000 shares of ₹100 from Amjad Ahmed Shaikh at ₹1,000 each, ₹2.0 crore in all, and Nitin Jagannath Phirake bought 2,500 shares from Prashant Dattatray Patil at ₹1,000 each (DRHP p.90, DRHP p.91). The rest of the present holding came from a split of ₹100 shares into ₹10 shares in June 2026 and a 15:1 bonus in July 2026 (DRHP p.83).

On August 21, 2026 Rhea Kailash Nasta gifted 10 shares each to Hriday Kailash Nasta, Meher Kailash Nasta, Veena Vishnu Nasta and Vishnu Newandram Nasta (DRHP p.90).

11Who already owns it

Ace Furnaces promoter holding before and after the IPO

Source: DRHP p.88. There are 80,00,000 shares of ₹10 before the issue and seven shareholders, all promoter or promoter group (DRHP p.82, DRHP p.91). The document leaves the after-issue holding blank (DRHP p.88). If all 21,80,000 new shares are issued and 5,40,000 are sold, the total becomes 1,01,80,000 shares and the promoters' 99.99% becomes about 73.3%, so 99.99% → 73.3% (our arithmetic, DRHP p.88).

There is no outside shareholder. Two years before filing, Amjad Ahmed Sheikh held 40% and Prashant Dattatray Patil 5%; both sold to the present promoters in April 2025 (DRHP p.89, DRHP p.90, DRHP p.91). Both had been paid as directors, ₹0.79 crore and ₹0.34 crore in FY25 (DRHP p.281). An employee stock option plan for up to 5% of capital was approved in September 2026; no options have been granted (DRHP p.85).

12What changed just before the IPO

• Revenue and profit: revenue went from ₹81.2 crore in FY24 to ₹100.8 crore in FY26 and profit after tax from ₹3.0 crore to ₹8.6 crore (DRHP p.65).
• Receivables: 96 receivable days in FY24 and 97 in FY26, after 74 in FY25 (DRHP p.102).
• Promoter pay went from ₹0.66 crore in FY24 to ₹1.50 crore in FY26 (DRHP p.281).
• Ownership: Rhea Kailash Nasta and Nitin Jagannath Phirake bought out Amjad Ahmed Shaikh and Prashant Dattatray Patil at ₹1,000 a share on April 2, 2025 (DRHP p.90, DRHP p.91).
• Share split: ₹100 to ₹10, approved June 1, 2026 (DRHP p.83).
• Bonus issue: 15:1, allotted July 22, 2026, 75,00,000 shares, the last allotment before the IPO, with no price paid (DRHP p.83).
• Pre-IPO placement: none; the share capital history shows no allotment other than the subscription in 2014, a rights issue at par in 2015 and the 2026 bonus (DRHP p.83).
• Auditor: Ashwini Singh and Associates ceased on June 15, 2026 and Abhishek Kumar & Associates was appointed on June 30, 2026, because the previous auditor was not peer reviewed (DRHP p.75).
• Public company: converted with a fresh certificate dated September 18, 2026 (DRHP p.3).
• Board: Rhea Kailash Nasta joined on April 2, 2025; a non-executive director and two independent directors joined on September 18, 2026 (DRHP p.218).
• Plant: manufacturing moved from Anand Nagar, Additional MIDC Ambernath to G-50, Chikhloli MIDC (DRHP p.36).
• Borrowings went from ₹4.6 crore at March 2025 to ₹6.9 crore at March 2026 (DRHP p.64).
• Dividend: ₹2.25 a share final dividend declared on September 17, 2026 (DRHP p.308).

13Capacity and expansion

Source: DRHP p.182. The company says that because every furnace is different, installed capacity and utilisation cannot be stated in units, and a chartered engineer, M/s. Creative Services, has certified that position (DRHP p.182, DRHP p.30). Job workers are used when order volumes are high (DRHP p.184). No part of the issue goes to new capacity (DRHP p.97). The step from capacity to revenue therefore cannot be made from the filing.

14Market size and industry structure

Ace Furnaces industry: market size and growth

As claimed: the industry chapter is drawn from the "Industry Report on Indian Industrial Furnaces Sector" by Dun & Bradstreet Information Services India Private Limited, dated September 2026, which the company commissioned and paid for in connection with the offer (DRHP p.29). The commissioned report does not put a rupee or dollar size on the Indian industrial furnace market. Its only rupee figures for the product are trade figures: Indian exports of industrial and laboratory furnaces and ovens (HS 8417 and 8514) were ₹1,924.0 crore in FY26 and imports ₹7,736.0 crore (DRHP p.154).

The part that is addressable: the company sells reheating and heat-treatment furnaces, including bell and soaking pit furnaces, mostly in India, with exports of 9.58% of FY26 revenue (DRHP p.162, DRHP p.171). The chapter does not size this segment, nor the revamp and spares business.

What the company is today: FY26 revenue of ₹100.8 crore (DRHP p.65). With no market size in the chapter, no market share can be stated, and the chapter gives none.

Size over time: the commissioned report gives a trade series rather than a market series. Exports rose from ₹926.0 crore in FY21 to ₹1,924.0 crore in FY26, and imports from ₹1,724.0 crore to ₹7,736.0 crore; the trade deficit widened to ₹5,812.0 crore in FY26 (DRHP p.154, DRHP p.155). The report says only that the industry "is expected to maintain a positive, steady growth trajectory over the medium term", with demand from new projects and from replacing older furnaces (DRHP p.160). It gives no growth rate for the industry.

Segments: the report sorts furnaces four ways: by application (melting and refining furnaces such as blast and induction furnaces, and heating-purpose furnaces), by heating purpose (reheating against heat treatment), by operating mode (batch, such as bell and bogie-hearth, against continuous, such as roller-hearth and walking-hearth) and by heat source (DRHP p.143). The company sits in heating-purpose furnaces: reheat and soaking pit furnaces that bring metal to rolling or forging temperature, and bell and other heat-treatment furnaces (DRHP p.162).

What drives demand: the chapter names steel first. India's crude steel output rose from 120.29 million tonnes in FY22 to 170.15 million tonnes in FY26, and capacity from 154.06 million tonnes in FY22 to 200.33 million tonnes in FY25 (DRHP p.149). The National Steel Policy, 2017 targets 300 million tonnes of capacity by FY2030-31, a government target the report cites (DRHP p.149).

Induction furnaces made 38.2% of crude steel in FY25 against 28.1% in FY21 (DRHP p.150). The chapter also cites vehicle production of 34.71 million units in FY26, defence production of ₹1,78,000 crore in FY26 against ₹1,54,000 crore in FY25, and a railway capital budget of ₹2,93,030 crore for 2026-27 (DRHP p.151).

Structure: the report describes the market as application-specific specialists rather than broad engineering firms, serving a dispersed base of about 300 forging units and over 2,000 re-rolling mills (DRHP p.159, DRHP p.160). Customers judge vendors on customisation, lifecycle cost against upfront price, automation, energy efficiency and commissioning and after-sales support (DRHP p.160). The chapter names Megatherm Induction Limited and John Cockerill India Limited as listed peers, and Machine Tool Linkers as a niche maker of heat recuperators (DRHP p.162, DRHP p.160). It gives no market shares.

Inputs and trade: steel plate and sections are the main input. The report cites June 2026 price rises of 11.2% for HR coil, 11.4% for CR coil and 15.8% for GP sheet (DRHP p.152), and finished steel imports of 5.62 million tonnes worth ₹52,627 crore in April to February FY26 (DRHP p.153). Furnace imports come 45% from China and 13% from Germany; the USA took 20% of India's furnace exports in FY26 (DRHP p.155).

Rules: the chapter names the Bureau of Energy Efficiency, the Bureau of Indian Standards, the DGFT and the Ministry of Heavy Industries as the main regulators (DRHP p.156). The PAT energy efficiency scheme covered 1,333 designated consumers, about 55% of industrial energy use, as of 2025 (DRHP p.157), and the ADEETIE scheme for small industry energy efficiency has an outlay of ₹1,000 crore (DRHP p.159). For its own plant, the company still awaits a final fire no-objection certificate and three labour registrations (DRHP p.44).

What the chapter says can go wrong: steel and alloy price swings that turn fixed-price quotations into lower margins; imports that strengthen buyers' bargaining and expose makers that use imported controls; carbon rules that make efficiency guarantees and performance disputes matter more (DRHP p.152, DRHP p.153, DRHP p.154). It adds high initial investment, unreliable electricity, fuel price swings and the price sensitivity of smaller buyers (DRHP p.161). Much of the chapter is national economy material (GDP, consumption, FDI) that does not size this company's segment (DRHP p.126 to DRHP p.142).

15Competitive position

Ace Furnaces competitors

Source: DRHP p.163, converted from ₹ lakh. John Cockerill India's figures are for the calendar year to December 2025, and its revenue was ₹666.6 crore in CY23 (DRHP p.163).

What the company puts forward: repeat customers, a customised range across four furnace types, project execution from design to commissioning, quality inspection and an experienced engineering team (DRHP p.109). Against that: the company is under a third of each peer's revenue, works from one leased plant of about 1,078 square metres, has no long-term contracts with customers or suppliers, and ten customers brought 64.68% of FY26 revenue (DRHP p.178, DRHP p.31, DRHP p.37). Its RoCE and fixed asset turnover of 38.57 times are far above the peers' because it owns little plant (DRHP p.163).

16Peers the company named

Peers named in the offer document: John Cockerill India Limited and Megatherm Induction Limited (DRHP p.111).

The document picks them after a review of listed companies with similar activities and products (DRHP p.163). Megatherm makes induction melting and heating equipment and is about 3.4 times the company's FY26 revenue (our arithmetic, DRHP p.163). John Cockerill India builds rolling mills and processing lines, with furnaces as part of those lines, and reports on a calendar year (DRHP p.162, DRHP p.163).

The document prints their P/E on September 29, 2026 prices as 377.36 for John Cockerill India and 19.73 for Megatherm, an average of 198.55 (DRHP p.110). The company's FY26 EPS is ₹10.72 on 80,00,000 shares (DRHP p.110). With no price band, no P/E for the company can be stated.

17Risks, in plain words

Ace Furnaces IPO risks

Financial: cash and receivables: operating cash flow of −₹3.8 crore in FY26 against ₹8.6 crore of profit (DRHP p.66) → profit is being held up in customer dues → ₹5.2 crore of receivables were over six months old and ₹1.9 crore was written off in FY26 (DRHP p.265, DRHP p.33).

Customers: the top ten customers were 64.68% of FY26 revenue, none named, on project orders (DRHP p.37) → revenue depends on winning new large orders each year → the largest single customer was 18.03% of FY24 revenue (DRHP p.37).

Business: project timing: each project takes six to twelve months and revenue is recognised at milestones (DRHP p.100) → delays at a customer's site move revenue between years → the order book was ₹68.2 crore at August 31, 2026, about two-thirds of FY26 revenue (DRHP p.178, our arithmetic).

Business: product swings: heat-treatment furnaces fell from 55.72% of revenue in FY25 to 13.96% in FY26 while bell furnaces rose from 11.57% to 31.24% (DRHP p.168) → the mix can shift sharply from one year to the next → soaking pit furnaces, new in FY26, were 13.28% (DRHP p.168).

Suppliers: steel was 23.59% of FY26 purchases and the bell furnace motor comes only from Germany or France (DRHP p.31, DRHP p.38) → fixed-price contracts carry steel price risk → imported materials were 4.06% of FY26 raw material purchases (DRHP p.38).

Regulation and compliance: the company has filed adjudication applications for past company law lapses, has not filed MSME returns since 2019, and has paid statutory dues late (DRHP p.35, DRHP p.48) → penalties may follow → late GST payments covered ₹4.9 crore in FY26 (DRHP p.48).

Business: one leased plant: all fabrication is at one leased unit whose licence runs to October 2028, and its fire no-objection certificate is still to be obtained (DRHP p.190, DRHP p.44) → any disruption stops production → the no-objection certificate for the manufacturing unit expired on September 2, 2025 and is being renewed (DRHP p.44).

Issue-specific: the selling promoters' average cost is ₹0.63, ₹6.25 and ₹3.44 a share (DRHP p.91) → the offer price, not yet set, will be set against that cost → the bonus shares that make up most of their holding were allotted in July 2026 (DRHP p.83).

18Litigation and regulatory matters

Cases against Ace Furnaces and its promoters

Criminal: none by or against the company, promoters, directors or key managerial personnel (DRHP p.311, DRHP p.312, DRHP p.313). Regulatory: no actions by statutory or regulatory authorities against the company or its promoters and directors (DRHP p.311, DRHP p.312). Tax: the summary puts the company's 15 tax matters at ₹0.24 crore, the directors' three at under ₹0.01 crore and the promoters' two at ₹0.04 crore (DRHP p.43).

Two TDS demands settled under Vivad se Vishwas in 2022 still show as outstanding on the portal (DRHP p.312). Corporate law: the company has applied for adjudication on CARO reporting errors for FY20 to FY23, received adjudication orders for FY24 and FY25 which it plans to appeal, and applied for adjudication on deposit returns and on paying interim dividends from FY16 to FY26 without a separate bank account (DRHP p.35). Statutory dues: PF, ESI, GST, TDS and professional tax were paid late on several occasions in FY24 to FY26 (DRHP p.48).

19Related-party transactions

Source: DRHP p.281, converted from ₹ lakh. The company had no sales to or purchases from related parties in any year (DRHP p.281). Directors' outstanding balances of ₹1.6 crore at March 2024 were cleared by March 2025 (DRHP p.281).

What appeared or changed in the two years before filing: Amjad Ahmed Sheikh and Prashant Dattatray Patil, paid as directors in FY24 and FY25, drew nothing in FY26; Rhea Kailash Nasta was paid from FY26; salaries to three relatives began in FY26; and commission to directors stopped after FY24 (DRHP p.281). The promoters say no property taken by the company in the last three years involved them (DRHP p.231).

20What the offer document does not say

Customers are not named. Furnace counts by type, tonnage handled and prices are not given, so growth cannot be split into volume and price. Installed capacity and utilisation are not stated (DRHP p.182). The commissioned industry report does not size the Indian industrial furnace market or the company's segment, and gives no market shares.

The board changes table for the last three years does not record when Amjad Ahmed Sheikh and Prashant Dattatray Patil ceased to be directors, though both were paid as directors in FY25 (DRHP p.218, DRHP p.281). The interest due to small suppliers on late payments is not quantified (DRHP p.253). The issue size in rupees, the price band, general corporate purposes and offer expenses are blank (DRHP p.97). The after-issue shareholding is blank (DRHP p.88).

Some inconsistencies are recorded as document matters, not business ones: FY26 exports are ₹9.7 crore in the business chapter and the accounts but ₹9.5 crore in the MD&A (DRHP p.171, DRHP p.297); dues to small enterprises at March 2026 are ₹3.3 crore in the balance sheet and ₹4.0 crore in the creditors table (DRHP p.64, DRHP p.315); the plant move is placed in FY25 in the risk factors, while the leave and licence for the new plant starts on November 1, 2025, which is FY26 (DRHP p.36, DRHP p.190); and the sector-wise revenue table totals FY25 ₹90,000 below the accounts (DRHP p.172, DRHP p.65).

21Five questions for management

1. How many furnaces of each type were delivered in FY24, FY25 and FY26, at what average contract value, so that FY26 growth can be split between the number of projects and their size?
2. Of the ₹26.9 crore of receivables at March 31, 2026, how much has since been collected, and which projects make up the ₹5.2 crore older than six months?
3. What were the ₹1.9 crore of balances written off in FY26, and were any of them amounts retained by customers against performance?
4. How much of the ₹68.2 crore order book at August 31, 2026 comes from the top five customers, and how much is export?
5. What working capital per rupee of revenue does the projection of ₹42.5 crore at March 2028 assume, and how much of the increase comes from paying suppliers sooner?

1Sources and cited facts

This study was read from 1 document the company filed. The 181 figures it cites are listed under the document each came from, with the page and the sentence as printed.