LGC Engineering Limited IPO

01At a glance

What the company does: makes precision steel castings by the lost wax (investment casting) process at one plant in the Tubinakere Industrial Area, Mandya, Karnataka, to customers' drawings; investment castings were 99.90% of FY26 revenue (DRHP p.122, DRHP p.130).

Who pays it: equipment makers in earth moving (55.98% of FY26 revenue), oil and gas (14.55%), automotive (10.23%), railways (7.09%) and general engineering (6.64%) (DRHP p.130). No customer is named. The largest single customer took 48.51% of FY26 revenue, and exports to the United Kingdom were the same amount, ₹14.2 crore (DRHP p.131).

Why it is raising money: ₹7.9 crore of the fresh issue for working capital and ₹1.8 crore to repay State Bank of India term loans, with general corporate purposes left blank (DRHP p.84). The offer for sale proceeds go to the selling promoter, not the company (DRHP p.84).

How fast it has grown: revenue went from ₹26.7 crore in FY24 to ₹14.4 crore in FY25 and ₹29.2 crore in FY26, about 4.7% a year over the two years, and profit after tax from ₹1.7 crore to ₹0.31 crore and ₹1.8 crore, about 3.7% a year (our arithmetic, DRHP p.52).

The one thing to understand: the record moves with export orders. When exports fell from ₹13.6 crore in FY24 to ₹3.0 crore in FY25, revenue fell 45.86% and profit 80.98%; when they came back to ₹14.9 crore in FY26, so did revenue (DRHP p.231, DRHP p.236).

02The business, in plain words

What LGC Engineering does

Investment casting is a way of making metal parts close to their final shape. A wax copy of the part is made in a die, coated in layers of ceramic slurry, the wax is melted out, and molten steel is poured into the hollow shell; when it cools the shell is broken off and the part is ground, shot-blasted, heat treated and inspected (DRHP p.141, DRHP p.142). LGC Engineering does these steps in-house and sends machining, plating, painting, X-ray radiography and coining to subcontractors; it has no machining capability of its own (DRHP p.25).

Equipment maker → a cast steel component to its drawing (links, clamp levers, valve bodies, impellers, brackets, switchgear parts) → the company melts steel scrap and ferro alloys and casts the part by the lost wax process → it is paid per part under purchase orders, mostly without long-term contracts (DRHP p.136, DRHP p.137, DRHP p.138, DRHP p.32).

The business began as a partnership firm, LGC Engineering, on October 15, 2012, and became LGC Engineering Limited, a public company, on April 15, 2024 (DRHP p.2). The firm kept trading until June 6, 2024, so FY25 combines about two months of the firm and ten months of the company (DRHP p.162, DRHP p.202). The plant covers 4,018 square metres, holds ISO 9001:2015 and Pressure Equipment Directive (PED) certification, and is owned on land allotted by the Karnataka Industrial Areas Development Board (DRHP p.122, DRHP p.147).

New parts go through sample development of 5 to 10 pieces before the customer approves full production (DRHP p.140). The company had 44 employees on its payroll and 45 contract workers on August 31, 2026 (DRHP p.145). It received an award from Automotive Axles in 2023 (DRHP p.122).

Earnings equation: Revenue = tonnes of castings sold × realisation per tonne. The document gives production, not sales: 263.66 tonnes in FY24, 240.49 in FY25 and 287.75 in FY26 (DRHP p.130). Revenue per tonne produced was about ₹0.10 crore in FY24 and FY26 and about ₹0.06 crore in FY25 (our arithmetic, DRHP p.130, DRHP p.52).

03Where the money comes from

Source: DRHP p.130. Medical, defence, infrastructure and scrip sales make up the rest, each under 3% (DRHP p.130). By geography, exports were 50.99% of revenue in FY24, 21.15% in FY25 and 51.10% in FY26; the United Kingdom alone was 48.00%, 15.32% and 48.51% (DRHP p.131). Within India, Tamil Nadu, Karnataka and Andhra Pradesh take almost all domestic sales (DRHP p.131). All sales are to private customers, none to government (DRHP p.132).

LGC Engineering customers: how concentrated the revenue is

Source: DRHP p.131. Revenue depends on a few customers: one customer took 48.51% of FY26 revenue, and the top ten 87.43% (DRHP p.131). The largest customer's revenue in FY26 and FY24, ₹14.2 crore and ₹12.8 crore, equals the United Kingdom export figure in both years (DRHP p.131). Read from the filing: the largest customer appears to be a single United Kingdom buyer in the earth moving segment, though the document does not say so. Purchases are concentrated too: the top supplier was 58.59% of FY26 purchases and the top ten 86.58% (DRHP p.139).

04The growth record

LGC Engineering financials: revenue, profit and margins

Source: DRHP p.52, DRHP p.53, DRHP p.97. In rupees, revenue went from ₹26.7 crore in FY24 to ₹29.2 crore in FY26 and profit after tax from ₹1.7 crore to ₹1.8 crore (DRHP p.52). EBITDA is the company's definition, which excludes other income (DRHP p.99).

Our arithmetic over FY24 to FY26: revenue grew about 4.7% a year (our arithmetic, DRHP p.52), EBITDA about 21.7% a year (our arithmetic, DRHP p.97) and profit after tax about 3.7% a year (our arithmetic, DRHP p.52). EBITDA margin moved from 9.4% to 12.6% (DRHP p.97), up 328 basis points, and PAT margin from 6.01% to 5.98%, down 3 basis points (DRHP p.97). Year by year, revenue fell 45.86% in FY25 and rose 102.30% in FY26, and profit after tax fell 80.98% and rose 465.29% (DRHP p.234, DRHP p.236).

Operating cash flow was ₹2.0 crore in FY26 (DRHP p.53), an inflow in all three years. Other income of ₹0.48 crore, mostly duty drawback, export incentives and exchange gains, was 17.8% of FY26 profit before tax of ₹2.7 crore (our arithmetic, DRHP p.52); in FY24 it was 32.0% (our arithmetic, DRHP p.52). Net debt was about 3.0 times FY26 EBITDA (our arithmetic, DRHP p.97), borrowings of ₹11.3 crore less cash of ₹0.21 crore (DRHP p.51). Debt to equity was 1.8× in FY26 (DRHP p.97) and return on capital employed 37.6% (DRHP p.97). Capacity utilisation was 48.0% in FY26 (DRHP p.130).

The year end is March 31 throughout, but FY25 joins the partnership firm's April 1 to June 6, 2024 accounts (revenue ₹2.5 crore) with the company's June 7, 2024 to March 31, 2025 accounts (₹12.0 crore) (DRHP p.202). FY24 is the partnership firm's year, prepared under the accounting standards that applied to a firm (DRHP p.27).

05What the growth is made of

Revenue rose ₹2.5 crore from FY24 to FY26 (our arithmetic, DRHP p.52). Production rose 9.1% over the same years, from 263.66 to 287.75 tonnes, while revenue rose 9.5% (our arithmetic, DRHP p.130, DRHP p.52). Read from the filing: on those figures the two-year increase is mostly volume, with revenue per tonne produced about level at ₹0.10 crore. Production is not sales, and inventory of finished goods rose in the same period, so this is an approximation (DRHP p.235).

The FY25 dip and FY26 recovery are a matter of export orders. The company says FY25 revenue fell “primarily on account of lower export orders”, with export sales down from ₹13.6 crore to ₹3.0 crore and earth moving revenue from ₹14.0 crore to ₹4.1 crore (DRHP p.230, DRHP p.231, DRHP p.236). In FY26 exports rose to ₹14.9 crore “on account of the revival of orders from outside India”, and domestic sales rose 24.92%, led by railways, oil and gas and automotive (DRHP p.234).

The document does not give tonnes sold, prices per tonne or the order book, so the increase cannot be separated precisely into volume and price. That is the finding.

06Earnings quality

The item that needs explaining is inventory. Inventory rose from ₹6.4 crore at March 2024 to ₹10.2 crore at March 2025 and ₹12.9 crore at March 2026 (DRHP p.51). The company says finished goods grew in FY25 because production continued at FY24 levels while exports fell, and in FY26 because it “maintained higher inventory levels in anticipation of higher orders” (DRHP p.237, DRHP p.235). Closing finished goods were ₹7.6 crore at March 2026 (DRHP p.235). Inventory holding of 283 days is the main reason the working capital object exists (DRHP p.88).

Two smaller points. Employee costs fell 21.86% in FY26 while revenue doubled, because fewer contract workers were needed and some were used on factory construction and capitalised (DRHP p.235). And a deferred tax charge of ₹0.47 crore in FY26 took the tax line to ₹0.92 crore (DRHP p.234).

07The balance sheet

At March 31, 2026 total assets were ₹25.4 crore: tangible fixed assets ₹6.3 crore, capital work in progress ₹1.3 crore, inventories ₹12.9 crore, trade receivables ₹2.8 crore and cash ₹0.21 crore (DRHP p.51). Against that: borrowings ₹11.3 crore, trade payables ₹3.9 crore, other current liabilities and provisions ₹3.1 crore, and net worth ₹6.4 crore (DRHP p.51).

Borrowings at March 2026 were ₹10.0 crore secured from State Bank of India, of which ₹7.8 crore drawn on an ₹8.0 crore cash credit, ₹1.7 crore on a machinery and building term loan, ₹0.41 crore on a rooftop solar loan and ₹0.10 crore on a car loan; and ₹1.4 crore unsecured, interest-free loans from Geetha Krishna (₹1.3 crore) and Arjun Krishna Shastry (₹0.11 crore) (DRHP p.225, DRHP p.208, DRHP p.55). All three promoters have given personal guarantees for the State Bank of India loans (DRHP p.226). There are no contingent liabilities (DRHP p.54). Capital commitments are not stated.

Source: DRHP p.97, DRHP p.84, our arithmetic. The after-issue borrowing figure applies the full ₹1.8 crore to the March 2026 balance; the loans to be repaid had ₹1.8 crore outstanding on September 30, 2026 (DRHP p.91). Net worth after the issue cannot be stated because the price is blank (DRHP p.70).

08What the money is for

LGC Engineering IPO objects: what the money is for

Source: DRHP p.84, DRHP p.85; the percentages are our arithmetic on the ₹9.7 crore of objects that carry an amount, because the fresh issue amount is not set. General corporate purposes are capped at 15% of the gross proceeds or ₹10 crore, whichever is less (DRHP p.85).

Working capital: ₹4.0 crore in FY27 and ₹3.9 crore in FY28 (DRHP p.85). The company estimates its working capital gap rising from ₹10.1 crore at March 2026 to ₹14.6 crore at March 2027 and ₹18.1 crore at March 2028, with inventory days held at 275 and receivable days at 45; these are the company's own estimates for sizing the object (DRHP p.87, DRHP p.88). The rest is to come from internal accruals and short-term borrowings (DRHP p.88).

Debt repayment: ₹1.8 crore against two State Bank of India term loans sanctioned January 21, 2025, one for machinery and building at 8.35% and one for rooftop solar at 8.60%, with ₹1.8 crore outstanding on September 30, 2026, in FY27 (DRHP p.91, DRHP p.85). The text calls it a cash credit repayment while the table lists the two term loans (DRHP p.91). The objects have not been appraised by a bank, and there is no monitoring agency because the issue is under ₹50 crore (DRHP p.86, DRHP p.59).

Into the business 19,72,000 new shares; the rupee amount depends on the price, which is not set (DRHP p.48). To selling shareholders 3,50,000 shares from Arjun Krishna Shastry, 7.87% of the pre-issue capital; not priced at this stage (DRHP p.48).

09Who is selling

LGC Engineering IPO offer for sale: who is selling

Source: DRHP p.48 for the shares; the percentage of the holding is our arithmetic. The offer for sale is 3,50,000 shares by one selling shareholder (DRHP p.48), alongside a fresh issue of 19,72,000 shares (DRHP p.48). The offer for sale is 15.1% of the 23,22,000 shares in the issue (our arithmetic, DRHP p.48). Arjun Krishna Shastry's weighted average cost of acquisition is ₹10.00 a share (DRHP p.1), and the shares have been held for more than a year (DRHP p.71). The selling promoter bears the share of issue expenses attributable to the offer for sale (DRHP p.85).

10Promoters

The promoters are Arjun Krishna Shastry, Deepika Gerty Laxmi and Geetha Krishna (DRHP p.186). The document states that Arjun Krishna Shastry is the spouse of Deepika Gerty Laxmi and the son of Geetha Krishna (DRHP p.171). C R Krishna, the father of Arjun Krishna Shastry, is in the promoter group and holds 100 shares (DRHP p.76, DRHP p.147).

Arjun Krishna Shastry, 44, is managing director, a founding partner of the firm in 2012, with a mechanical engineering degree and an MBA from the University of Oxford, and over 13 years in steel component manufacturing (DRHP p.170). Deepika Gerty Laxmi, 40, is whole-time director, a co-founding partner and a qualified dental surgeon, responsible for human resources and vendor coordination (DRHP p.170). Geetha Krishna, 71, is chairman and a non-executive director and runs Trade Links, a kitchen equipment supply business; the university records of Geetha Krishna's degrees could not be traced and rest on an affidavit (DRHP p.170, DRHP p.30).

Other ventures: Arjun Krishna Shastry owns Acme Auto Gas, a proprietorship, and Geetha Krishna owns Trade Links; neither promoter is a director of any other company (DRHP p.190). C R Krishna's proprietorship, Little Gas Company, supplies the company: ₹0.73 crore of goods in FY26 (DRHP p.193, DRHP p.55). There are no group companies (DRHP p.248).

Pay: Arjun Krishna Shastry drew no pay in FY26, and Deepika Gerty Laxmi was paid ₹0.06 crore (DRHP p.173). Promoter remuneration was ₹0.05 crore in FY24, as partner's pay to Deepika Gerty Laxmi, and ₹0.06 crore in FY26 (DRHP p.55). The approved ranges are ₹0.30 to ₹0.70 crore a year for the managing director and ₹0.12 to ₹0.30 crore for the whole-time director, within a ₹1.8 crore annual ceiling for all directors (DRHP p.172, DRHP p.173, DRHP p.174).

Pledges and guarantees: no promoter shares are pledged (DRHP p.76). All three promoters guarantee the State Bank of India loans personally (DRHP p.226).

Cases: the promoters face income tax demands only, less than ₹0.01 crore in all (DRHP p.242). No criminal, regulatory or material civil case involves them, and none has been declared a wilful defaulter or debarred (DRHP p.241, DRHP p.191).

Promoter economics: every share the promoters hold was allotted on April 15, 2024 at ₹10 when the firm's partners' capital of ₹4.4 crore was converted into 44,48,965 shares (DRHP p.72). There has been no bonus issue and no other allotment since (DRHP p.207, DRHP p.72), and no purchase or sale by the promoters in the six months before filing (DRHP p.77). The FY24 partners' capital of ₹4.6 crore was reduced by ₹0.33 crore moved to a loan account from the directors in the firm's final April to June 2024 accounts (DRHP p.207).

11Who already owns it

LGC Engineering promoter holding before and after the IPO

Source: DRHP p.76, DRHP p.74. The promoters hold 99.9% before the issue and 63.8% after (DRHP p.76), assuming the full 64,20,965 shares are issued (DRHP p.70). The three public holders are Manishkumar Prayagchand Agarwal and Hitiksha Manishkumar Agarwal with 2,500 shares each and Rajanna Amaresha with 100, all subscribers at conversion at ₹10 (DRHP p.72). No fund, institution or company outside the promoter group holds shares. There is no employee stock option scheme (DRHP p.73).

1,284,193 promoter shares are to be locked in for three years as the minimum promoter contribution (DRHP p.78). The issue is 36.16% of the post-issue capital (DRHP p.2).

12What changed just before the IPO

• Revenue and profit: revenue went from ₹26.7 crore in FY24 to ₹29.2 crore in FY26 and profit after tax from ₹1.7 crore to ₹1.8 crore (DRHP p.52), after a fall to ₹14.4 crore and ₹0.31 crore in FY25 (DRHP p.52).
• Receivable days shortened from 52 in FY24 to 36 in FY26 (DRHP p.88), while inventory days went from 150 to 283 (DRHP p.88).
• Promoter pay went from ₹0.05 crore in FY24 to ₹0.06 crore in FY26 (DRHP p.55).
• Conversion to a company: the partnership firm became LGC Engineering Limited, a public company, in April 2024 (DRHP p.2), and the last allotment before the IPO was at ₹10 a share, April 2024, when partners' capital was converted (DRHP p.72). Authorised capital rose from ₹5 crore to ₹8 crore on December 14, 2024 (DRHP p.71).
• No bonus issue (DRHP p.207), and no issue of shares of 5% or more of the capital in the 18 months before filing (DRHP p.100).
• Auditor change: the first auditor, Dokania S. Kumar & Company of Kolkata, appointed May 12, 2024, resigned on September 4, 2025 citing preoccupation; Subek Agarwal & Associates of Mysore was appointed on September 16, 2025, so the auditor changed from Dokania S. Kumar & Company to Subek Agarwal & Associates, September 2025 (DRHP p.66, DRHP p.67).
• Board turnover: two independent directors appointed on October 30, 2024 resigned in July 2025; two new independent directors joined on July 16, 2026 (DRHP p.175). The company secretary appointed in October 2024 resigned on July 25, 2025 and the present one joined on April 1, 2026 (DRHP p.184).
• New promoter loans: ₹1.4 crore of interest-free unsecured loans from Geetha Krishna and Arjun Krishna Shastry appeared in FY26 (DRHP p.208).
• Capacity spending: a factory building and rooftop solar plant were capitalised in FY25, and ₹1.3 crore of capital work in progress was open at March 2026 (DRHP p.238, DRHP p.51).
• Late filings: the document lists 17 late company law filings since 2024, the longest 520 days, and late GST, provident fund and ESI returns (DRHP p.26, DRHP p.27, DRHP p.28).

13Capacity and expansion

Source: DRHP p.130, DRHP p.139. Utilisation was 43.94% in FY24 and 40.08% in FY25, on production of 263.66 and 240.49 tonnes (DRHP p.130). The figures come from a chartered engineer's certificate of September 9, 2026, and the company warns they rest on assumptions about product mix (DRHP p.34).

None of the issue money goes to new capacity (DRHP p.84). The plant was running at under half its stated capacity in each of the three years, so the business could grow volumes without new equipment; whether it does depends on orders, which the document does not disclose as an order book. The document does not say what volume the working capital increase assumes.

14Market size and industry structure

LGC Engineering industry: market size and growth

As claimed: the industry chapter is not a commissioned report. It is drawn from the India Brand Equity Foundation website (ibef.org) and other public sources, which the company has not verified (DRHP p.106, DRHP p.40). The one figure that bears directly on this business is India's foundry and casting market, which the chapter puts at ₹1,98,000 crore in 2025 (DRHP p.117).

The part that is addressable: steel investment castings sold to equipment makers in earth moving, oil and gas, automotive, railways and general engineering, in India and abroad (DRHP p.130, DRHP p.131). The chapter does not size investment castings separately from other castings, and it does not size the export market for castings at all.

What the company is today: FY26 revenue of ₹29.2 crore (DRHP p.52), about 0.015% of the chapter's foundry and casting market (our arithmetic, DRHP p.117). The chapter gives no market share for the company.

Size over time: the chapter's source projects the foundry and casting market at ₹5,21,100 crore by 2034, a growth rate of 10.78% a year over 2026 to 2034; this is the source's projection, not a newboard figure (DRHP p.117). For related markets it gives capital goods production of ₹5,69,900 crore in FY25, up from ₹2,66,672 crore in FY21, with earthmoving and mining machinery at ₹80,750 crore (DRHP p.117), and a construction equipment market of ₹69,046 crore in 2025 that it projects at ₹1,02,827 crore by 2030 (DRHP p.120).

Segments: the chapter divides engineering by product (capital goods, heavy electricals, machine tools, boilers, generators, fasteners, construction equipment) rather than by casting process (DRHP p.117, DRHP p.118). The company's segment, investment castings, sits inside the foundry and casting figure. Its largest end market, earth moving, ties to the earthmoving and construction equipment industry, which the chapter says grew 26% to 135,650 units in FY24 (DRHP p.120).

What drives demand: capacity expansion in infrastructure, electricity, mining, oil and gas, refining, steel and automobiles (DRHP p.116); government capital expenditure of ₹15,48,000 crore announced for FY27 (DRHP p.120); production-linked incentives for automobiles and components, which had drawn ₹35,657 crore of investment by September 2025 (DRHP p.118); and defence exports of ₹23,622 crore in FY25 (DRHP p.113). The chapter's first five pages cover the world and Indian economy in general and size nothing in castings (DRHP p.106 to DRHP p.110).

Structure: engineering is India's largest industrial sector, with 27% of factories, and it is de-licensed with 100% foreign investment allowed automatically (DRHP p.116). The chapter names no investment casting competitor. The business chapter says the company competes with other investment casting makers and, indirectly, with machining and forging (DRHP p.144); the two listed peers it picks are Thaai Casting Limited and Investment & Precision Castings Ltd (DRHP p.96).

Inputs and trade: the chapter does not discuss steel scrap or ferro alloy prices. The company buys all its raw material in India, 89.60% of it from Karnataka in FY26, and imports nothing (DRHP p.139). On trade, the chapter says engineering goods exports were ₹9,86,328 crore in FY25, with the United States, UAE, Saudi Arabia, Germany and Italy the top destinations (DRHP p.117); the company's main export market, the United Kingdom, is not among them (DRHP p.131).

Rules: the plant needs a factory licence, consent to operate from the Karnataka State Pollution Control Board (valid to September 30, 2029) and compliance with the Factories Act, pollution, hazardous waste and foreign trade laws (DRHP p.124, DRHP p.246, DRHP p.150, DRHP p.151, DRHP p.152, DRHP p.159). It holds ISO 9001:2015 and PED quality certificates, the latter from TUV NORD (DRHP p.246). The chapter itself does not discuss licensing for foundries.

What the chapter says can go wrong: it quotes the IMF's view that global risks lean to the downside, from protectionism, tariffs and supply chain disruption (DRHP p.107), which matters to a company exporting half its output. The risk factors add dependence on the cyclical end sectors, raw material prices it may not pass on, and exchange rates it does not hedge (DRHP p.22, DRHP p.25, DRHP p.42).

15Competitive position

LGC Engineering competitors

Source: DRHP p.97, DRHP p.98, consolidated figures for the peers. The document says the peers are "not strictly comparable" in nature, turnover and size (DRHP p.96). Thaai Casting's revenue is about five times the company's and Investment & Precision Castings' about six and a half times (our arithmetic, DRHP p.96).

What the company puts forward: the full lost wax process under one roof with in-house heat treatment and testing, customer-specific manufacturing across many end industries, ISO 9001:2015 and PED certification, a location near Bengaluru, Hosur and Coimbatore, and a pending patent on a casting material (DRHP p.133, DRHP p.134, DRHP p.144). Against that: one plant, no in-house machining, one customer at 48.51% of revenue, a top supplier at 58.59% of purchases, and no long-term supply contracts with most customers (DRHP p.29, DRHP p.25, DRHP p.131, DRHP p.139, DRHP p.32).

16Peers the company named

Peers named in the offer document: Thaai Casting Limited and Investment & Precision Castings Ltd (DRHP p.96).

Thaai Casting had FY26 revenue of ₹145.6 crore, basic EPS of ₹5.35, return on net worth of 11.86% and a P/E of 24.50 at ₹131.10 on September 29, 2026 (DRHP p.96, DRHP p.97). Investment & Precision Castings had revenue of ₹188.4 crore, EPS of ₹11.76, return on net worth of 11.46% and a P/E of 129.09 at ₹1,518.10 (DRHP p.96). The company's FY26 EPS is ₹3.99, net asset value per share ₹14.31 and return on net worth 27.90% (DRHP p.96). Thaai Casting's borrowings are larger than its net worth, at a debt to equity of 1.11 (DRHP p.98). With no price band, no P/E for the company can be stated.

17Risks, in plain words

LGC Engineering IPO risks

Customers: one customer took 48.51% of FY26 revenue (DRHP p.131) → when United Kingdom orders fell in FY25, revenue fell 45.86% and profit 80.98% (DRHP p.236) → the top ten customers were 87.43% of FY26 revenue, and most have no long-term contract (DRHP p.131, DRHP p.32).

Exports and currency: exports were 51.10% of FY26 revenue (DRHP p.131) → the company does not hedge foreign exchange (DRHP p.42) → exchange gains and export incentives were most of FY26 other income, 17.8% of profit before tax (our arithmetic, DRHP p.52, DRHP p.214).

Suppliers: the top supplier provided 58.59% of FY26 purchases and the top ten 86.58% (DRHP p.139) → there are no long-term supply contracts (DRHP p.24) → machining, plating, X-ray and other steps are outsourced, ₹1.5 crore in FY26 (DRHP p.25).

Working capital: inventory was ₹12.9 crore at March 2026, 283 days (DRHP p.51, DRHP p.88) → stock built for orders that do not come would have to be carried or written down (DRHP p.24) → ₹7.9 crore of the issue goes to funding this cycle (DRHP p.84).

One site: all manufacturing is at one plant in Mandya (DRHP p.29) → a breakdown, power cut or accident stops all output (DRHP p.28) → utilisation was 47.95% in FY26 (DRHP p.130).

Financial: borrowings were ₹11.3 crore against net worth of ₹6.4 crore (DRHP p.97) → State Bank of India provides all the secured debt, at rates linked to its external benchmark, guaranteed by the promoters (DRHP p.42, DRHP p.225, DRHP p.226) → finance costs were ₹1.1 crore in FY26, 40.5% of profit before tax (our arithmetic, DRHP p.52).

Compliance: 17 company law filings were late, one by 520 days, and some GST and payroll returns were late (DRHP p.26, DRHP p.28) → the first statutory auditor resigned in September 2025 (DRHP p.66) → some licences are still in the partnership firm's name (DRHP p.125).

Issue-specific: the promoters' cost is ₹10 a share (DRHP p.30) → the selling promoter receives the offer for sale money (DRHP p.31) → general corporate purposes, issue expenses and the price are blank, and there is no monitoring agency (DRHP p.85, DRHP p.40).

18Litigation and regulatory matters

Cases against LGC Engineering and its promoters

Criminal: no case against the company, the promoters or the directors (DRHP p.240, DRHP p.241). The only criminal matter listed involves the company secretary, Kanthanahalli Parvati Ramachandra, who represented a former employer, Cyient DLM Private Limited, as complainant in a case before the Mysuru courts and has since left that employer (DRHP p.242).

Tax: the company's ₹0.02 crore demand, including interest, was raised against the firm in June 2020 and no action has been taken on it (DRHP p.243). The summary table counts three tax matters against promoters while two are described (DRHP p.242, DRHP p.243). Regulatory and civil: none (DRHP p.240, DRHP p.241). There are no dues in dispute with creditors; ₹1.3 crore was owed to 36 micro and small enterprises at March 2026 (DRHP p.243).

19Related-party transactions

Source: DRHP p.55, DRHP p.224. Little Gas Company is a sole proprietorship of C R Krishna, father of Arjun Krishna Shastry (DRHP p.193, DRHP p.224). The registered office is rented from C R Krishna, less than ₹0.01 crore in FY26, on an 11-month lease to January 2027 (DRHP p.55, DRHP p.147). The chief financial officer also has an advance from the company outstanding (DRHP p.55).

What appeared in the two years before filing: the promoter loans of ₹1.4 crore and the office rent, both new in FY26 (DRHP p.55). Purchases from Little Gas Company have run each year (DRHP p.55). The related-party list names two former independent directors, Vasanth Kumar and Ravi Shrichand Agrawal, with no transactions (DRHP p.224, DRHP p.175).

20What the offer document does not say

Customers and suppliers are not named. The order book, sales in tonnes and realisation per tonne are not given, so growth cannot be split into volume and price. Margins by end industry are not given; the company reports one segment (DRHP p.239). Capital commitments are not stated. The fresh issue amount, price band, general corporate purposes and issue expenses are blank. The industry chapter does not size investment castings or the export market.

Some inconsistencies are recorded as document matters, not business ones: the top ten customers' FY26 share is 87.52% in a risk factor and 87.43% in the tables (DRHP p.24, DRHP p.131); one risk factor gives inventory in reverse year order, ₹6.4 crore for FY26 instead of ₹12.9 crore (DRHP p.24, DRHP p.51); the industry P/E line reads highest 124.09, lowest 45.66 and average 148.27, an average above the highest (DRHP p.96);

the peer KPI note describes the peers as companies "who provide logistic services" (DRHP p.98); the debt repayment text calls the loan a cash credit while the table lists two term loans (DRHP p.91); the litigation summary counts three promoter tax cases and describes two (DRHP p.242, DRHP p.243); and investment castings are 99.37% of FY25 revenue in one table and 100.00% in a risk factor (DRHP p.130, DRHP p.23).

21Five questions for management

1. How many tonnes were sold in FY24, FY25 and FY26, and at what average price per tonne?
2. What share of FY26 revenue came from the largest customer's orders under contract, and what is the order book from that customer for FY27?
3. Of the ₹12.9 crore of inventory at March 2026, how much is finished goods held against specific purchase orders, and how old is the rest?
4. Why did Dokania S. Kumar & Company resign as auditor in September 2025, and were any matters raised in the handover?
5. What does Little Gas Company supply, and at what price compared with other suppliers?

1Sources and cited facts

This study was read from 1 document the company filed. The 153 figures it cites are listed under the document each came from, with the page and the sentence as printed.