ISSPL Limited IPO

01At a glance

What the company does: testing, inspection and certification services for clients in India and overseas, with inspection making up 66.85% of FY26 revenue, certification 22.12% and testing 11.03% (DRHP p.251).

Who pays it: central and state government utilities and departments, public sector undertakings, co-operative federations and private and multinational companies; government bodies were 33.33% of FY26 revenue (DRHP p.252, DRHP p.276).

Why it is raising money: ₹36.97 crore of laboratory and equipment spending plus a 5% contingency of ₹1.85 crore, and ₹20.00 crore to repay loans, with the rest for general corporate purposes (DRHP p.108, DRHP p.109).

How fast it has grown: revenue from ₹167.86 crore in FY24 to ₹255.20 crore in FY26, a CAGR of 23.3%; profit after tax from ₹10.48 crore to ₹19.46 crore, a CAGR of 36.2% (our arithmetic, DRHP p.70).

The one thing to understand: profit and cash have come apart. FY26 profit after tax was ₹19.46 crore, but cash from operations was ₹1.18 crore, as trade receivables rose by ₹24.14 crore in the year (DRHP p.71, DRHP p.72).

02The business, in plain words

A client needs an independent party to check that a pipeline weld, a coal consignment, a food sample or a management system meets a standard. ISSPL sends an inspector to the site, tests the sample in its own laboratory, or audits the system and issues a certificate.

A power utility, a railway body or a manufacturer → wants a third-party inspection, a test report or an ISO certificate → ISSPL deploys inspectors on site or runs the test in its Jaipur, Bengaluru or Bhubaneswar laboratory → it is paid a fee per assignment, test or certification cycle.

The company was incorporated in March 2014 as a company limited by guarantee and, under a slump sale agreement of June 2014, took over the industrial services division, the Indian Register Quality Systems division and the marine advisory division of the Indian Register of Shipping (DRHP p.304).

It later bought two inspection companies, Safess Quality Management and Safess Engineering and Projects, now wholly owned subsidiaries, a Bengaluru laboratory business with its land and building in 2015, and a food, drugs and water testing business from CEG Test House for ₹6.00 crore in 2022 (DRHP p.308, DRHP p.309, DRHP p.311). In 2025 it took a 40% stake in eProtect 360 Solutions, a cybersecurity firm, for ₹3.40 crore (DRHP p.310).

It works through people more than plant: 454 permanent employees and 1,583 contract staff at the date of the DRHP (DRHP p.285). Employee costs were 44.90% of FY26 revenue (DRHP p.417). The company says capacity and capacity utilisation do not apply to its business (DRHP p.281).

Earnings equation: Revenue ≈ assignments executed × fee per assignment. The order book gives one handle: orders executed were ₹154.30 crore in FY26 against ₹127.75 crore in FY25, and the closing order book was ₹161.74 crore (DRHP p.251).

03Where the money comes from

Source: DRHP p.251, DRHP p.252, DRHP p.36. The next largest states in FY26 were West Bengal at 10.81% and Delhi/NCR at 9.52%; the Middle East and Africa were 2.44% (DRHP p.252).

Source: DRHP p.276. The document does not name its customers and does not give the share of the largest one. It says credit exposure to any single customer did not exceed 7% of gross trade receivables at March 2026 (DRHP p.395). In numbers, the top ten were under a quarter of FY26 revenue, and one state was over two-fifths.

04The growth record

Source: DRHP p.70, DRHP p.71, DRHP p.69, DRHP p.250, AP p.5.

• Revenue CAGR FY24 to FY26: 23.3% (our arithmetic, DRHP p.70).
• EBITDA CAGR FY24 to FY26: 27.2% (our arithmetic, DRHP p.250).
• PAT CAGR FY24 to FY26: 36.2% (our arithmetic, DRHP p.70).
• EBITDA margin movement: 11.24% to 11.95%, up 71 basis points over two years, after a peak of 14.47% in FY25 (DRHP p.250).

FY26 profit carries a one-off charge of ₹2.63 crore for the new labour codes, shown as an exceptional item, and ₹0.30 crore of share of profit from the associate (DRHP p.70, DRHP p.419). The company had no share capital in FY24, when it was a company limited by guarantee, so no FY24 earnings per share is given (DRHP p.160).

05What the growth is made of

Revenue rose ₹47.01 crore in FY26. Inspection fees rose 19.28% to ₹170.60 crore, certification fees 37.14% to ₹56.45 crore and testing 17.22% to ₹28.15 crore (DRHP p.418). In FY25 testing grew fastest, at 33.11% (DRHP p.419). The company attributes the increase to growth in its business operations and in the inspection and certification business (DRHP p.417).

Costs rose faster than revenue in FY26. Total expenses rose 24.28% against revenue growth of 22.58%; within other expenses, technical and professional consultancy rose ₹11.51 crore and travel ₹4.93 crore (DRHP p.417, DRHP p.418). That is why EBITDA was almost flat, ₹30.13 crore to ₹30.51 crore, on 22.6% more revenue (DRHP p.250).

The document does not split revenue into number of assignments and fee per assignment, so growth cannot be separated into volume and price.

06Earnings quality

The one that needs explaining is cash. In FY26 trade receivables absorbed ₹24.14 crore and income tax paid was ₹11.22 crore, leaving operating cash of ₹1.18 crore (DRHP p.71, DRHP p.72). Trade receivables doubled from ₹39.46 crore at March 2024 to ₹79.01 crore at March 2026 (DRHP p.69). The company links longer collection to government and PSU clients (DRHP p.34).

07The balance sheet

Source: DRHP p.69. Net debt was ₹17.48 crore, 0.6 times FY26 EBITDA (our arithmetic, DRHP p.69, DRHP p.250). Debt to equity was 0.20 (DRHP p.250).

Contingent liabilities were ₹22.75 crore at March 2026: ₹18.75 crore of guarantees excluding financial guarantees and a ₹4.00 crore corporate guarantee given for a subsidiary (DRHP p.74). The company also lent ₹1.55 crore to its promoter in FY26 (DRHP p.72, DRHP p.75).

After the issue: the objects set aside ₹20.00 crore to repay loans, against ₹20.15 crore outstanding on the listed HDFC Bank facilities at 30 June 2026 (DRHP p.109, DRHP p.155). The fresh issue amount is not yet priced, so the post-issue net worth cannot be stated.

08What the money is for

Source: DRHP p.108, DRHP p.109. General corporate purposes are not yet stated and are capped at 15% of gross proceeds or ₹10.00 crore, whichever is lower (DRHP p.109). The stated objects total ₹58.82 crore before general corporate purposes (our arithmetic, DRHP p.109). The share of the fresh issue each takes cannot be worked out until the price is set.

• Building: four floors on about 8,000 sq. ft. of surplus company-owned land at the Bengaluru campus, to house the solar and appliance laboratories (DRHP p.111).
• Timing: ₹16.69 crore of capital spending in FY27 and the rest, including the whole solar laboratory, in FY28; loan repayment in FY27 (DRHP p.109).
• Orders: none placed. Equipment still to be ordered is ₹29.84 crore, 80.71% of the capital spending, and the civil contractor has been identified but not signed (DRHP p.109).
• Appraisal: no bank or independent agency has appraised the objects (DRHP p.157).

Into the business: all of it; the issue is up to 25,00,000 new shares at a price not yet set (DRHP p.66). To selling shareholders: nothing; there is no offer for sale (DRHP p.1).

09Who is selling

Nobody. The issue is a fresh issue only and the promoter is not offering shares (DRHP p.1, DRHP p.313).

10Promoters

The promoter is ISSPL Services Private Limited, which holds 60,00,600 shares, 99.28% of the company (DRHP p.334). It was incorporated on 28 January 2025 as a company limited by guarantee without share capital, so it has members, not shareholders: Arun Sharma, Vinay Sudhakar Kshirsagar and Ramamirtham Kannan, each with a ₹1,000 guarantee and 33.33% of the votes (DRHP p.334, DRHP p.335). The document describes it as board-run and professionally managed, with no identifiable promoters (DRHP p.334). The company has no promoter group (DRHP p.336).

The three members are also directors of ISSPL Limited: Arun Sharma as non-executive chairman, Vinay Sudhakar Kshirsagar as managing director and Ramamirtham Kannan as a non-executive director (AP p.7, AP p.8). Arun Sharma is also Executive Chairman of the Indian Register of Shipping (DRHP p.317).

How the promoter came to own it: ISSPL Services acquired 100% of the company from ISSPL Development Foundation on 12 March 2025 by a donation agreement, at no cost (DRHP p.335). It then received bonus shares and subscribed to a rights issue at ₹10 a share (DRHP p.99). Its weighted average cost is ₹2.50 a share (AP p.7).

What it is paid: nothing. The document says the promoter has received no amount or benefit since incorporation (DRHP p.336). The managing director was paid ₹0.88 crore in FY26 and ₹0.25 crore in FY25 (DRHP p.75).

Litigation and record: no outstanding litigation involving the promoter (DRHP p.336). Not identified as a wilful defaulter and not debarred by SEBI (DRHP p.336).

11Who already owns it

Source: DRHP p.98. The largest public holders are Sahaya Raj with 5,000 shares, and Arun Sharma, Vinay Sudhakar Kshirsagar, Gautam Chatterjee, Ramamirtham Kannan and Subramanian Priya with 3,000 each (AP p.5). No fund or company other than the promoter holds 1% (DRHP p.100).

If all 25,00,000 shares are issued, the company will have 85,44,000 shares and the promoter's holding will fall to 70.2% (our arithmetic, DRHP p.93, DRHP p.99). The final count depends on the price and lot size (DRHP p.66).

12What changed just before the IPO

• From guarantee company to share company: converted to a company limited by shares on 5 February 2025 (DRHP p.94).
• Change of control: ISSPL Services took 100% on 12 March 2025, by donation from ISSPL Development Foundation (DRHP p.335).
• Bonus issues: 200 shares on conversion in February 2025; 10,000 for every 1 in April 2025; 5 for every 7 in June 2025 (DRHP p.94, DRHP p.96).
• Rights issue: 15,00,150 shares at ₹10 to the promoter in June 2025, ₹1.50 crore (DRHP p.94, DRHP p.72).
• Share split: none in the year before the DRHP (DRHP p.97).
• Pre-IPO placement: 43,400 shares at ₹300 a share on 17 July 2026 to 25 people, among them six directors, raising ₹1.30 crore (DRHP p.94, DRHP p.95, DRHP p.415).
• Public company: converted on 1 April 2026; renamed from IRClass Systems and Solutions Limited to ISSPL Limited on 4 May 2026 (DRHP p.2).
• Associate: 40% of eProtect 360 Solutions for ₹3.40 crore, agreement of 28 August 2025 (DRHP p.310).
• Loans: a ₹9.00 crore working capital demand loan and a ₹2.50 crore term loan taken in FY26; a ₹1.55 crore loan made to the promoter (DRHP p.72, DRHP p.418).
• Managing director's pay: ₹0.25 crore in FY25 to ₹0.88 crore in FY26 (DRHP p.75).
• Auditor: no change of statutory auditor in the last three years (DRHP p.81).

13Capacity and expansion

The company says capacity and capacity utilisation do not apply to its service business (DRHP p.281). It runs laboratories in Jaipur, Bengaluru and Bhubaneswar (DRHP p.276).

Source: DRHP p.108, DRHP p.109, DRHP p.111. The document does not give the number of tests the new laboratories could run or any expected revenue from them.

14Market size and industry structure

As claimed: the Indian third-party TIC market is put at USD 8.5 billion in FY2026 and projected at USD 11.4 billion by FY2030, a CAGR of 7.6%, per the Dun & Bradstreet report dated August 2026, commissioned and paid for by the company for this issue (DRHP p.227, DRHP p.542). Those projections are D&B's, and newboard has not tested them.

The part that is addressable: the D&B report expects testing to be 55.5% of the Indian market in FY2030, inspection 21.0% and certification 23.5% (DRHP p.228). ISSPL is the other way round: two-thirds of its revenue is inspection (DRHP p.251).

What the company is today: ₹255.20 crore of FY26 revenue (DRHP p.70). The document does not state the company's market share.

Structure: the company's own risk factors call the industry highly competitive and fragmented, with multinational inspection agencies, independent laboratories and small local players, and much infrastructure work awarded by tender (DRHP p.35, DRHP p.283).

15Competitive position

The DRHP names no listed peer, so there is no comparison table to fill (DRHP p.160).

What the document offers as reasons clients use it:

• Accreditations and approvals across its verticals, including NABL-accredited laboratories (DRHP p.253).
• Lineage: formerly a division of the Indian Register of Shipping, set up as a separate entity in 2014 (DRHP p.243).
• Repeat work: a significant portion of revenue from repeat customers and framework agreements, a statement the document does not quantify (DRHP p.276).
• Shared systems: its central server and internet connection are owned and maintained by the Indian Register of Shipping under a cost-sharing agreement (DRHP p.281).

Against that, the company says competition is on price in tenders and that skilled inspectors move between firms (DRHP p.283).

16Peers the company named

Peers named in the offer document: none. The DRHP says the company has no peer group company for comparison (DRHP p.160).

Its basis for issue price gives only its own figures: FY26 earnings per share of ₹35.20, weighted average earnings per share of ₹170.62 across three years, and net asset value per share of ₹224.51 at March 2026 (DRHP p.160, DRHP p.161). The weighted average is lifted by FY25 earnings per share of ₹459.06, computed on a much smaller share count before the June 2025 bonus (DRHP p.160). No price-based ratio is possible until a price band is set.

17Risks, in plain words

• Customers: government bodies were 33.33% of FY26 revenue, and the company says they take longer to pay (DRHP p.34); receivable days rose from 86 to 113 over two years (our arithmetic, DRHP p.69, DRHP p.70).
• Cash: FY26 operating cash flow was ₹1.18 crore against profit of ₹19.46 crore (DRHP p.72).
• Geography: Maharashtra was 42.42% of FY26 revenue (DRHP p.36).
• Objects: no equipment ordered; ₹29.84 crore of equipment, 80.71% of the capital spending, is still at quotation stage (DRHP p.109).
• People: 1,583 of the 2,037 staff are on contract (DRHP p.285); employee costs were 44.90% of revenue (DRHP p.417).
• Premises: all offices and laboratories other than Bengaluru are rented on leave and licence (AP p.7).
• Control: the promoter holds 99.28% and would still hold about 70.2% after a full issue (DRHP p.334; our arithmetic, DRHP p.93).
• Compliance record: the company lists past delays in filings with the Registrar of Companies (DRHP p.44).
• SME listing: the shares are to trade on BSE SME (DRHP p.52).

18Litigation and regulatory matters

Source: DRHP p.31, DRHP p.32, DRHP p.430. The eight tax claims total ₹64,884 (DRHP p.31). There are no criminal, regulatory or material civil matters by or against the company, promoter, directors or key managers (DRHP p.32).

19Related-party transactions

FY26 related-party items outside the group (DRHP p.75, DRHP p.76):

• Promoter: loan given ₹1.55 crore; interest on loan ₹0.12 crore.
• eProtect 360 Solutions (associate): technical fees paid ₹0.52 crore.
• Orionsayi Consultant (common director): technical fees paid ₹0.15 crore.
• Key managers: managing director ₹0.88 crore, chief financial officer ₹0.42 crore, chief operating officer ₹0.49 crore, company secretary ₹0.37 crore.
• Directors: sitting fees of ₹1.00 lakh to ₹1.40 lakh each.

What appeared in FY26: the loan to the promoter and the fees to eProtect and Orionsayi, none of which appear in FY25 or FY24 (DRHP p.75). Within the group, the company subscribed ₹3.99 crore to new shares of a subsidiary in FY26 (DRHP p.76).

20What the offer document does not say

• Price band, issue size in rupees, lot size and dates, which is normal at DRHP stage.
• The largest customer's share of revenue, and any customer names.
• Volume and price: no count of assignments, tests or certificates, so growth cannot be split.
• Expected revenue from the new laboratories, or their test capacity.
• Listed peers: the DRHP names none.
• Receivable days: not printed; the figures here are our arithmetic.
• Why ISSPL Development Foundation donated the shares to ISSPL Services, beyond the donation agreement itself (DRHP p.335).

21Five questions for management

1. How much of the ₹79.01 crore of trade receivables at March 2026 is owed by government and PSU clients, and how much is more than a year old?
2. What share of FY26 revenue came from the largest single customer?
3. What revenue does the company expect the solar PV testing laboratory to earn in its first full year, and at what utilisation?
4. Why did technical and professional consultancy costs rise ₹11.51 crore in FY26, and will the new laboratories reduce outsourcing?
5. On what terms, and for how long, was ₹1.55 crore lent to the promoter, and has it been repaid?

2Sources and cited facts

This study was read from 2 documents the company filed. The 103 figures it cites are listed under the document each came from, with the page and the sentence as printed.