Madhavaa Crafts Limited IPO

01At a glance

What the company does: machines close-tolerance metal components such as compressor bearing housings, cylinders, steering-gear housings, manifolds and valve covers to drawings supplied by equipment makers, from one rented CNC machine shop of 3,552 sq. ft. at Malumichampatti, Coimbatore (DRHP p.121, DRHP p.129, DRHP p.133).

Who pays it: original equipment makers and their first-tier suppliers, almost all in Tamil Nadu, Kerala and Karnataka (DRHP p.138). Elgi Equipments Limited alone was 35.75% of FY26 revenue, down from 74.32% in FY25; the top ten customers were 97.31% (DRHP p.23, DRHP p.136). Other named customers include Elgi Sauer Compressors Limited, ZF Rane Automotive India Pvt Ltd and Gilbarco Veeder Root India Pvt Ltd (DRHP p.136).

Why it is raising money: ₹19.1 crore for a new factory at Arasipalayam Village, Coimbatore, on land owned by the promoter Priya Lavaniya, ₹10.5 crore for working capital and ₹2.0 crore to repay loans; the general corporate purposes amount is left blank (DRHP p.76, DRHP p.79). There is no offer for sale (DRHP p.1).

How fast it has grown: revenue from ₹6.0 crore in FY24 to ₹13.6 crore in FY26, about 51.3% a year, and profit after tax from ₹0.49 crore to ₹2.1 crore, about 106.8% a year (our arithmetic, DRHP p.46).

The one thing to understand: the business is small and rests on very few relationships. One customer group was three quarters of revenue until FY25, the top ten customers are above 97% in every year, and 83.9% of the ₹25.5 crore order book at September 22, 2026 is a single scheduling agreement with ZF Rane Automotive India Private Limited that had ₹0.69 crore executed in nearly six months (DRHP p.23, DRHP p.122, our arithmetic, DRHP p.128).

02The business, in plain words

What Madhavaa Crafts does

Madhavaa Crafts is a contract machine shop. A customer such as a compressor maker sends a drawing of a part, for example a bearing housing or a cylinder cover; the company writes the machining programme, builds fixtures and gauges, machines samples, inspects them on a coordinate measuring machine and, once the customer approves the samples, supplies the part in series against purchase orders or annual scheduling agreements (DRHP p.124, DRHP p.134, DRHP p.136). It does not own any product design; it calls itself a build-to-print supplier (DRHP p.27).

An equipment maker needs a machined part to its own drawing → the company buys castings, forgings or steel bar, or receives them from the customer, and turns, mills, drills and bores them on CNC machines, sending heat and surface treatment out to vendors → it delivers inspected parts in its own vehicles to plants mostly in and around Coimbatore, Chennai, Hosur and Tiruchirappalli → it is paid the price of the part, or only a conversion charge when the customer supplied the metal (DRHP p.124, DRHP p.134, DRHP p.138).

The two ways of working matter for the revenue line. On the supply basis the company buys the raw material and its sale price includes the metal; on job-work it is paid only for machining (DRHP p.124). Sale of manufactured components was 91.87% of FY26 revenue and job-work 8.13%, against 78.14% and 21.86% in FY24 (DRHP p.123).

Everything is made in one rented facility at Malumichampatti, leased from the promoter Priya Lavaniya under a rental deed that ends on July 31, 2027 (DRHP p.140). The shop has one Makino horizontal machining centre, two vertical machining centres, two CNC turning centres, a Carl Zeiss coordinate measuring machine and a contour measuring system (DRHP p.139). It runs three eight-hour shifts, 26 days a month, and measures capacity in machine hours: 51,116 hours installed in FY26, of which 44,527 were used, 87.11% (DRHP p.133, DRHP p.135). It had 25 employees at March 31, 2026, 12 of them in production (DRHP p.139).

The company was incorporated on March 27, 2017 as Shivalaya Precision Components Private Limited, renamed twice in 2024 and converted to a public company with a fresh certificate dated November 17, 2025 (DRHP p.2). It has one subsidiary, Madhavaa Kitting Unit Private Limited, incorporated on September 3, 2025, 99% owned, which had no revenue in FY26 and does not yet carry on any business (DRHP p.151, DRHP p.152). In FY26 it began supplying aerospace and defence and hydrogen energy customers, so far only development orders (DRHP p.28).

Earnings equation: Revenue = machine hours used × revenue earned per hour. The document gives hours, not parts or tonnes. Read from the filing: revenue per production hour was about ₹1,505 in FY24 and about ₹3,061 in FY26, because hours rose 12.6% while revenue rose 2.3 times (our arithmetic, DRHP p.46, DRHP p.135). Part of that is the move from job-work, which carries no metal, to supply basis, which does; the document does not split revenue per hour by the two.

03Where the money comes from

The company reports one segment and, apart from ₹0.14 crore of FY24 exports to the UAE, sells only in India (DRHP p.222, DRHP p.123). By customer industry:

Source: DRHP p.123. General engineering, mostly compressor parts, was ₹10.2 crore of FY26 revenue (DRHP p.123). Marine machinery appeared in FY26 at ₹1.1 crore, and Elgi Sauer Compressors Limited, a marine machinery customer, was ₹0.87 crore of it (DRHP p.123, DRHP p.136). The company counts 12 industries served (DRHP p.121).

Madhavaa Crafts customers: how concentrated the revenue is

Source: DRHP p.23. Revenue depends on a few customers in every year: the top ten were above 97% in all three (DRHP p.23). The largest customer in all three years is Elgi Equipments Limited, at ₹4.4 crore in FY24, ₹8.2 crore in FY25 and ₹4.9 crore in FY26 (DRHP p.136, DRHP p.137). In FY26 three unnamed general engineering customers, numbered 2, 3 and 4, together brought ₹5.8 crore, 42.83% of revenue (our arithmetic, DRHP p.136).

The document gives other versions of these numbers. One page puts the largest customer at 76.02% in FY24 and 29.91% in FY26 (DRHP p.130); another puts the top ten at 97.75%, 99.69% and 99.92% (DRHP p.232); the top ten table itself totals 99.92% for FY24 (DRHP p.137). This study uses the table on DRHP p.23.

Read from the filing: in FY25 the fourth largest customer, unnamed and listed under petroleum products, bought ₹61.79 lakh, the same figure as FY25 sales to enterprises in which the directors have significant influence; in FY24 the sixth largest customer bought ₹6.46 lakh, the same as FY24 related-party sales (DRHP p.137, DRHP p.49). The document does not name these customers, so the match is arithmetic, not a disclosure.

Suppliers are concentrated too: the top five were 82.60% of FY26 purchases and the top ten 95.44%, with the largest single supplier at 50.90% (DRHP p.25, DRHP p.137). There are no long-term supply contracts (DRHP p.137).

04The growth record

Madhavaa Crafts financials: revenue, profit and margins

Source: DRHP p.45, DRHP p.46, DRHP p.47, DRHP p.96, converted from ₹ lakh. Revenue went from ₹6.0 crore in FY24 to ₹13.6 crore in FY26 and profit after tax from ₹0.49 crore to ₹2.1 crore (DRHP p.46). Return on net worth on year-end equity was 13.97%, 14.94% and 33.70% (DRHP p.94).

Our arithmetic over FY24 to FY26: revenue grew about 51.3% a year (our arithmetic, DRHP p.46), EBITDA about 60.3% a year (our arithmetic, DRHP p.96) and profit after tax about 106.8% a year (our arithmetic, DRHP p.46). EBITDA margin moved from 26.62% to 30.27%, up 365 basis points, so 26.6% → 30.3% rounded (DRHP p.96). Revenue rose 85.04% in FY25 and 23.71% in FY26 (DRHP p.96). The company states no growth target.

The year ends on March 31 throughout. FY26 is consolidated and FY24 and FY25 standalone, but the subsidiary had no revenue or profit in FY26, so the years compare on the same business (DRHP p.217, DRHP p.151). The accounting policies mention prior-period items adjusted in the restatement without giving amounts in the pages that could be read (DRHP p.222).

What sits around the record:

• Cash: operating cash flow was ₹2.5 crore in FY26, ₹1.3 crore in FY25 and ₹2.5 crore in FY24 (DRHP p.47). Spending on fixed assets was ₹2.6 crore in FY26 (DRHP p.47).
• Other income was ₹1.37 lakh, 0.5% of FY26 profit before tax of ₹2.8 crore (our arithmetic, DRHP p.46).
• Debt: borrowings were ₹4.5 crore at March 31, 2026 (DRHP p.214), debt to equity 0.72 times, so 0.7× (DRHP p.96), and net debt, borrowings less ₹0.26 crore of cash and bank balances, about 1.0× FY26 EBITDA (our arithmetic, DRHP p.45). Return on capital employed was 30.97%, so 31.0% rounded (DRHP p.96).
• Customers and suppliers: the largest customer was 35.75% of FY26 revenue, so 35.8% rounded, the top five 84.95%, so 85.0%, and the top ten 97.31%, so 97.3% (DRHP p.23); the top ten suppliers were 95.44% of FY26 purchases, so 95.4% (DRHP p.25).
• Related-party purchases: purchases from enterprises in which the directors have significant influence were ₹4.8 crore in FY26, 54.9% of the ₹8.8 crore of purchases (our arithmetic, DRHP p.49, DRHP p.224).
• Capacity: plant utilisation was 87.11% in FY26, so 87.1% (DRHP p.135).
• Order book: ₹25.5 crore unexecuted at September 22, 2026, 1.87 times FY26 revenue (DRHP p.122, DRHP p.29).
• Contingent liabilities: none in any of the three years (DRHP p.48).
• Cases against the promoters: one income-tax demand of ₹1,160 against Priya Lavaniya, so 1 tax demand, ₹1,160 (DRHP p.236).
• Industry: the company sits in capital goods and engineering, as a precision engineering machine shop serving equipment makers (DRHP p.121).

05What the growth is made of

Revenue rose ₹7.7 crore from FY24 to FY26 (our arithmetic, DRHP p.46). The company puts FY25 down to “higher orders from our largest customer” and FY26 to higher sale of goods supported by more installed machine hours (DRHP p.226, DRHP p.225).

Volume: production hours rose from 39,549 in FY24 to 40,540 in FY25 and 44,527 in FY26, 12.6% over the two years (our arithmetic, DRHP p.135). Installed hours dipped from 46,800 to 45,686 in FY25 and rose to 51,116 in FY26 (DRHP p.135). Hours explain only a small part of revenue that more than doubled.

Material in the price: sale of manufactured components, where the price includes the metal, went from ₹4.7 crore in FY24 to ₹12.5 crore in FY26, while job-work revenue moved from ₹1.3 crore to ₹1.1 crore (DRHP p.123). Purchases of raw material rose from ₹2.6 crore to ₹8.8 crore (DRHP p.224). Much of the revenue growth therefore carries bought-in material.

Customers: Elgi Equipments Limited rose from ₹4.4 crore to ₹8.2 crore in FY25 and fell back to ₹4.9 crore in FY26; in FY26 the gap was filled by unnamed customers 2, 3 and 4 and by marine compressor parts (DRHP p.137, DRHP p.136, DRHP p.123).

Margin: material cost including inventory change fell from 63.97% of revenue in FY25 to 52.06% in FY26, which the company gives as a main reason profit before tax rose 230% (DRHP p.226). Employee cost fell from ₹0.68 crore to ₹0.51 crore as some work was outsourced, while labour charges for contract labour rose from ₹0.87 crore to ₹1.3 crore (DRHP p.226, DRHP p.225).

The document does not give parts sold, price per part or margin by customer, so the increase cannot be split into volume, price and mix. That is the finding.

06Earnings quality

Cash has kept pace with profit: operating cash flow over the three years was about twice profit after tax, helped by depreciation of ₹0.70 crore to ₹0.87 crore a year (our arithmetic, DRHP p.47). Other income in FY24 and FY25 was mostly creditors written back, ₹0.07 crore in each year (DRHP p.224).

The item that needs explaining is related-party trade. In FY26 the company bought ₹4.8 crore from and sold ₹2.2 crore to enterprises in which the directors have significant influence, and ₹1.3 crore of its ₹3.3 crore of receivables at March 31, 2026, 39.5%, was owed by them (DRHP p.49, DRHP p.50, our arithmetic, DRHP p.45).

At March 31, 2024 those enterprises owed ₹1.1 crore against FY24 sales to them of ₹0.06 crore (DRHP p.50, DRHP p.49). The two enterprises named are Shivalaya Universe Kitting Divisionn and Aadhavan Engineering, both sole proprietorships of Priya Lavaniya (DRHP p.49, DRHP p.167). The pages that could be read do not say what is bought and sold, at what prices, or why the FY24 balance exceeds FY24 sales.

07The balance sheet

At March 31, 2026 total assets were ₹16.5 crore: property, plant and equipment ₹8.2 crore, inventories ₹4.1 crore, trade receivables ₹3.3 crore, short-term loans and advances ₹0.47 crore and cash and bank balances ₹0.26 crore (DRHP p.45). Against them: short-term borrowings ₹3.2 crore, long-term borrowings ₹1.3 crore, trade payables ₹3.6 crore, other current liabilities ₹1.2 crore, short-term provisions ₹0.75 crore, mostly income tax, and net worth ₹6.2 crore (DRHP p.45, DRHP p.228). Current assets were below current liabilities, a current ratio of 0.93 (DRHP p.212).

Borrowings at March 31, 2026 by type: a Bank of Baroda cash credit of ₹2.3 crore against a ₹3.0 crore limit at 7.90%, secured term loans ₹0.64 crore, vehicle loans ₹0.24 crore, unsecured NBFC term loans ₹0.90 crore at 15.50% to 19.00%, and interest-free loans repayable on demand from D Kathirvel, ₹0.25 crore, and Priya Lavaniya, ₹0.15 crore (DRHP p.214, DRHP p.215, DRHP p.216).

The cash credit is secured on stock and book debts, an equitable mortgage of the factory property in the name of Priya Lavaniya and of a residence in the names of both promoters, and personal guarantees of D Kathirvel, Priya Lavaniya and the chief financial officer Muthukumar M (DRHP p.215). Contingent liabilities are nil (DRHP p.48).

Source: DRHP p.45, DRHP p.76, DRHP p.213. The loans to be repaid are listed as outstanding on September 20, 2026, not March 31, 2026, and the issue size in rupees is not set, so the capitalisation statement leaves its post-issue column blank and the after-issue balance sheet cannot be worked out from the document (DRHP p.86, DRHP p.213).

08What the money is for

Madhavaa Crafts IPO objects: what the money is for

Source: DRHP p.76, DRHP p.77. The three stated objects add up to ₹31.6 crore (our arithmetic, DRHP p.76). The issue size in rupees depends on a price not yet set, so the share of each object cannot be worked out (DRHP p.1).

New facility, ₹19.1 crore: ₹16.2 crore for building, civil, finishing, electrical, plumbing, lifts and external works on a single quotation from Priya Engineering Projects Private Limited, and ₹2.9 crore for four CNC machines quoted by Machine Tools (India) Limited on September 17, 2026 (DRHP p.78, DRHP p.79, DRHP p.80). The building is 84.8% of the facility cost (our arithmetic, DRHP p.78).

The one-acre site is owned by the promoter Priya Lavaniya, the land cost is shown as nil, and the document does not state on what terms the company will use the land (DRHP p.78, DRHP p.79). The schedule spends ₹8.1 crore in FY27 and ₹11.0 crore in FY28, with construction from January to September 2027, machinery ordered in October 2027 and commercial operation in January 2028 (DRHP p.77, DRHP p.81).

No machinery orders have been placed, and every approval for the site, from consent to establish to the factory licence and fire certificate, is still to be applied for (DRHP p.36, DRHP p.81).

Working capital, ₹10.5 crore: ₹3.0 crore in FY27 and ₹7.5 crore in FY28 (DRHP p.77). The company estimates working capital rising from ₹2.3 crore at March 2026 to ₹9.1 crore at March 2027 and ₹35.0 crore at March 2028, with inventory of ₹28.5 crore and receivables of ₹22.6 crore by then; the rest is to come from ₹32.2 crore of internal accruals and ₹1.4 crore of borrowings (DRHP p.82, DRHP p.76). Those are the company's estimates; the document does not state the revenue they assume.

Repayment, ₹2.0 crore: seven loans outstanding at September 20, 2026 from Aditya Birla Capital, Clix Capital, Protium Finance, SMFG India Credit, Yes Bank and two from Bank of Baroda, at 7.90% to 19.00% (DRHP p.86 to DRHP p.89). Some carry prepayment charges of up to 7%, and the Aditya Birla loan cannot be prepaid before November 20, 2026 (DRHP p.86, DRHP p.87).

The objects have not been appraised by any bank or financial institution (DRHP p.91). One page says no monitoring agency is needed because the issue is below ₹50.0 crore; a risk factor says one will be appointed (DRHP p.54, DRHP p.36).

Into the business the whole fresh issue of up to 31,00,000 shares, at a price not yet set (DRHP p.1). To selling shareholders nothing; there is no offer for sale (DRHP p.1).

09Who is selling

Madhavaa Crafts IPO offer for sale: who is selling

The cover states that the entire issue is a fresh issue of up to 31,00,000 shares and that details of an offer for sale are not applicable (DRHP p.1). The promoters and promoter group will not take part in the issue (DRHP p.75). No promoter, promoter group member or director bought or sold shares in the six months before filing (DRHP p.71).

10Promoters

The promoters are D Kathirvel and Priya Lavaniya, who together hold 75,00,000 shares, 92.88% before the issue (DRHP p.166). The promoter group table lists Priya Lavaniya as the spouse of D Kathirvel (DRHP p.168). There are no corporate promoters and no other promoter group shareholders (DRHP p.71).

D Kathirvel, aged 43, is Chairman and Managing Director, trained as a machinist at the Government Industrial Training Institute, Coimbatore, holds a BCA, and worked as a machining centre operator and programmer, a training instructor and a sales and applications engineer before starting the company in 2017 (DRHP p.155). Priya Lavaniya, aged 38, is Whole-Time Director, holds a diploma in electronics and communication engineering and a BCA, has been with the company since incorporation and oversees administration and human resources (DRHP p.155). Priya Lavaniya's date of birth is January 09, 1988 on one page and September 01, 1988 on another (DRHP p.153, DRHP p.166).

Pay: D Kathirvel and Priya Lavaniya were paid ₹0.12 crore each in FY26 (DRHP p.157). Directors' remuneration in the related-party note was ₹0.09 crore in FY24, ₹0.14 crore in FY25 and ₹0.24 crore in FY26, so ₹0.09 crore → ₹0.24 crore (DRHP p.49). The new terms allow up to ₹0.12 crore a year each, with an annual increment of up to 50% (DRHP p.156).

Other business: Priya Lavaniya is sole proprietor of Shivalaya Universe Kitting Divisionn and Aadhavan Engineering; D Kathirvel has no other venture (DRHP p.166, DRHP p.167). These are the enterprises behind ₹4.8 crore of FY26 related-party purchases and ₹2.2 crore of sales (DRHP p.49). The document states that the promoters are not involved in any venture in the same line of business (DRHP p.168).

Property and money lent: the company rents its only factory from Priya Lavaniya, the proposed factory is to be built on Priya Lavaniya's land, and the promoters' interest-free loans stood at ₹0.39 crore at March 31, 2026 (DRHP p.140, DRHP p.79, DRHP p.214).

Pledges and guarantees: no promoter shares are pledged (DRHP p.70). The promoters have personally guaranteed the bank loans and mortgaged property for them (DRHP p.215).

Cases: no criminal, regulatory or material civil cases against the promoters; one income-tax demand of ₹1,160 against Priya Lavaniya for assessment year 2016, so 1 tax demand, ₹1,160 (DRHP p.235, DRHP p.236). Neither promoter is a wilful defaulter or barred by SEBI (DRHP p.169).

Promoter economics: the average cost of the promoters' shares is ₹4.00 each, as certified (DRHP p.38). All their shares were acquired at ₹100 per share of ₹100 face value: on incorporation in 2017, by conversion of loans in November 2020, by transfers from Ramaswami Manivannan, Ambika N and Karthigesan in March 2022, and by a further issue of 2,00,000 shares in March 2022 (DRHP p.70, DRHP p.64).

The split of ₹100 shares into ₹10 shares in July 2026 and the 3:2 bonus in September 2026 took their 3,00,000 shares to 75,00,000 (DRHP p.70, DRHP p.65). Two outside companies took shares in September 2026 at ₹218 a share, ₹87.2 after the bonus (DRHP p.99).

11Who already owns it

Madhavaa Crafts promoter holding before and after the IPO

Source: DRHP p.69, DRHP p.68, DRHP p.74; the last row is our arithmetic. There are 80,74,640 shares of ₹10 before the issue and nine shareholders (DRHP p.63, DRHP p.74). The document leaves the after-issue holding blank until the price is fixed (DRHP p.71). If all 31,00,000 new shares are issued, the total becomes 1,11,74,640 and the promoters' 92.88% becomes about 67.1%, so 92.9% → 67.1% (our arithmetic, DRHP p.63).

Multiplier Share and Stock Advisors Private Limited and Komalay Investrade Private Limited each hold 3.55%, so 3.6% rounded before the issue (DRHP p.69). Each was allotted 1,14,678 shares on September 22, 2026 by conversion of a loan at ₹218 a share, and each received 1,72,017 bonus shares four days later (DRHP p.65).

The conversion was worth about ₹5.0 crore in all (our arithmetic, DRHP p.65); the document does not say when these loans were made or what they were for, and the March 2026 balance sheet shows unsecured loans only from the promoters (DRHP p.214). After the issue each would hold about 2.6% (our arithmetic, DRHP p.63). The document says the company has no shareholders' agreements (DRHP p.152).

The other holders came in through a rights issue of 50 shares at ₹100 on September 30, 2025 to five individuals including Muthukumar M and Sridharan, and later transfers; the director Sridharan holds 250 shares (DRHP p.65, DRHP p.75). Certain transfers in March 2026 were made in physical form, which the company says does not appear to comply with the dematerialisation rule for unlisted public companies, and it is filing to compound the matter (DRHP p.32).

12What changed just before the IPO

• Revenue and profit: revenue went from ₹6.0 crore in FY24 to ₹13.6 crore in FY26 and profit after tax from ₹0.49 crore to ₹2.1 crore (DRHP p.46).
• Receivables went from 129 days in FY24 to 69 days in FY26, after 60 days in FY25 (DRHP p.82).
• Promoter pay: directors' remuneration went from ₹0.09 crore in FY24 to ₹0.24 crore in FY26 (DRHP p.49).
• Customer mix: the largest customer's share fell from 74.32% in FY25 to 35.75% in FY26 (DRHP p.23).
• Margin: EBITDA margin went from 18.06% in FY25 to 30.27% in FY26 (DRHP p.96).
• Related-party trade: purchases from enterprises in which the directors have significant influence rose from ₹0.36 crore in FY24 to ₹4.8 crore in FY26 (DRHP p.49).
• Names: Shivalaya Precision Components Private Limited became Shivalaya Master Craft Private Limited in July 2024 and Madhavaa Crafts Private Limited in October 2024 (DRHP p.51).
• Public company: converted with a fresh certificate dated November 17, 2025 (DRHP p.51).
• Subsidiary: Madhavaa Kitting Unit Private Limited incorporated on September 3, 2025 (DRHP p.151).
• Share split: ₹100 shares split into ₹10 shares on July 30, 2026 (DRHP p.64).
• Pre-IPO placement: 2,29,356 shares allotted on September 22, 2026 to Multiplier Share and Stock Advisors Private Limited and Komalay Investrade Private Limited by converting loans at ₹218 a share, ₹87.2 after the bonus (DRHP p.99).
• Bonus issue: 3:2, allotted September 26, 2026, 48,44,784 shares, the last allotment before the IPO, with no price paid (DRHP p.65).
• Auditor change: none in the last three years; SPP & Co. was reappointed for five years from April 1, 2026 (DRHP p.56).
• Board: two independent directors joined on September 25, 2026 and Sridharan became a non-executive director on September 26, 2026; a chief financial officer and company secretary were appointed on September 25, 2026 (DRHP p.158, DRHP p.165).
• Borrowings: new NBFC business loans at 15.50% to 19.00% were taken in late 2025, and a ₹0.50 crore Bank of Baroda term loan in May 2026 (DRHP p.86, DRHP p.88).
• Certifications: ISO 14001 and ISO 45001 certificates valid to August 2029, and a ZED Bronze certificate (DRHP p.141).

13Capacity and expansion

Source: DRHP p.135, DRHP p.81. Plant-level installed capacity was 46,800, 45,686 and 51,116 machine hours in FY24, FY25 and FY26, with 39,549, 40,540 and 44,527 hours used, so utilisation of 84.51%, 88.74% and 87.11% (DRHP p.135). Available hours are taken at 22.5 to 23.5 a day per machine over three shifts and 26 working days a month, certified by the chartered engineer V.K. Balasundaram (DRHP p.133, DRHP p.135).

The issue-funded factory adds four quoted machines: a vertical machining centre, two horizontal turning centres and a vertical turning centre for large-diameter parts, together ₹2.9 crore (DRHP p.79, DRHP p.80). The business chapter speaks of horizontal machining centres, a vertical turning lathe and turn-mill centres, and of parts over one metre in turning diameter that the present shop cannot machine (DRHP p.131). The document does not state the machine hours the new factory adds, so neither capacity in hours nor the step from capacity to revenue can be made here.

14Market size and industry structure

Madhavaa Crafts industry: market size and growth

As claimed: the company has not commissioned an industry report. Its Industry Overview chapter is drawn from websites and publications, chiefly the IMF, IBEF, Business Research Insights and IMARC Group, and the company says it has not verified the data (DRHP p.35, DRHP p.104). The nearest market figure is IMARC Group's, cited from its website: the India precision engineering market was USD 536.0 million in 2025 (DRHP p.119). At the ₹95.89 to the dollar used in the document's machinery quotations, that is about ₹5,140 crore (our arithmetic, DRHP p.79).

The part that is addressable: the company machines parts to drawings for compressor, automotive, hydraulic, marine, petroleum dispenser and similar equipment makers, mostly within Tamil Nadu, Kerala and Karnataka (DRHP p.123, DRHP p.138). The chapter does not size machined components for these industries, or for southern India, so the addressable part cannot be separated from the national figure.

What the company is today: FY26 revenue of ₹13.6 crore is about 0.3% of the IMARC 2025 figure as converted above (our arithmetic, DRHP p.46, DRHP p.119). The years differ, 2025 against FY26, and the IMARC category may not match what the company does, so this is an order of size, not a market share.

Size over time: IMARC Group expects the India precision engineering market to reach USD 996.1 million by 2034, a growth rate of 6.91% a year over 2026 to 2034; this is IMARC's projection as the chapter reports it (DRHP p.119). For the world, the chapter cites Business Research Insights: precision engineering components at about USD 20.96 billion in 2026, projected to reach USD 30.4 billion by 2035, about 4.2% a year (DRHP p.118).

The chapter also reports that the machine tools market, which serves automobiles and textiles, is expected to touch USD 2.5 billion by 2028, growing at 9.4% a year (DRHP p.117). Much of the rest of the chapter is about the national economy: real GDP of ₹3,23,12,034 crore in FY2025-26, up 7.7% (DRHP p.107), and manufacturing at about 17% of GDP (DRHP p.111).

Segments: IMARC divides the Indian market by type (machinery, tools, equipment), material (metals, plastics, composites), component (sensors, actuators, controls, robotics) and end user (automotive, aerospace and defence, electronics, medical, industrial manufacturing) (DRHP p.120). The company sells metal machined components, mostly into industrial equipment, with automotive at 8.61% of FY26 revenue and aerospace and defence only at the development-order stage (DRHP p.123, DRHP p.28).

What drives demand: the chapter names demand from automotive and aerospace, including electric vehicles and defence manufacturing, and the expansion of medical and electronics manufacturing (DRHP p.119, DRHP p.120). It cites engineering goods as India's largest export category at ₹10,82,729 crore in FY26 (DRHP p.116), capital goods at 1.9% of GDP (DRHP p.116), and manufacturing capacity utilisation in the RBI's survey at 75.60% in the third quarter of FY2025-26 (DRHP p.112). The company itself points to the China+1 sourcing shift and to localisation in defence, nuclear and clean energy (DRHP p.136).

Structure: the chapter names no competitors and gives no market shares. The engineering sector is described as the largest industrial sector, with 27% of factories, de-licensed and open to 100% foreign investment (DRHP p.115, DRHP p.116). The business chapter says competition comes from organised and unorganised machine shops in and around Coimbatore and elsewhere, on quality, accuracy, price, capacity, delivery and customer approval, and that some competitors are larger and better financed (DRHP p.141, DRHP p.142). The company names its strengths as approved-supplier status, metrology and its place in the Coimbatore engineering cluster (DRHP p.129, DRHP p.131).

Inputs and trade: raw materials are castings, forgings, steel and stainless bars and plates, tubes, aluminium extrusions and some titanium, bought from domestic suppliers without long-term contracts (DRHP p.137). Material cost was 55.79% of FY26 revenue (DRHP p.26). Most key machines are imported, from Japan and Korea, and part of the new capacity will be imported machinery priced in dollars (DRHP p.30, DRHP p.79). The company exported only once in three years, ₹0.14 crore to the UAE in FY24 (DRHP p.123).

Rules: the chapter on regulations lists the Factories Act, the four labour codes, environmental laws and consumer and competition law (DRHP p.143, DRHP p.144). The company holds a factory licence, a Tamil Nadu Pollution Control Board white category intimation and ISO 9001, 14001 and 45001 certificates, and has applied for a fire certificate for its present unit (DRHP p.238). For aerospace it plans to seek AS9100 (DRHP p.132).

What the chapter says can go wrong: high production cost and capital investment in CNC machines and inspection equipment, which limit small and medium makers, and swings in metal and polymer prices that squeeze margins (DRHP p.119). The company's own SWOT lists raw material price volatility, competition from low-cost and larger suppliers, pricing pressure from equipment makers, cyclicality in end-user industries and changes in trade rules (DRHP p.136). The chapter is mostly generic macroeconomic and sector material, and it does not size the contract machining market the company actually competes in.

15Competitive position

Madhavaa Crafts competitors

Source: DRHP p.96, DRHP p.98, DRHP p.99, DRHP p.214, converted from ₹ lakh. The document gives the peers' net worth, ₹33.0 crore for Ameya Precision Engineers and ₹48.9 crore for Apsis Aerocom, against the company's ₹6.2 crore (DRHP p.98, DRHP p.99, DRHP p.96). It does not describe either peer's products or customers.

What the company puts forward: approved-supplier status with equipment makers that are subsidiaries or joint ventures of international groups, a Makino horizontal machining centre and Zeiss inspection, SAP-based traceability, engineering input at the drawing stage, and closeness to customers in the Coimbatore cluster (DRHP p.129, DRHP p.130, DRHP p.131). It notes that requalifying another supplier costs the customer time and money (DRHP p.129).

Against that: it owns no designs, so customers can move a part to another qualified supplier; it has one rented, space-constrained shop; its key machines are not duplicated; and it is several times smaller than both named peers (DRHP p.27, DRHP p.136, DRHP p.30, DRHP p.98, DRHP p.99). It received a quality award from ELGI Equipments Limited for Q3 of FY 2024-25 (DRHP p.150).

16Peers the company named

Peers named in the offer document: Ameya Precision Engineers Limited and Apsis Aerocom Limited (DRHP p.95).

The document picks them as listed companies whose business profile is comparable (DRHP p.95). Ameya Precision Engineers had revenue of ₹40.2 crore in FY26, about three times the company's, growing 4.27% that year, with a PAT margin of 13.89% and almost no debt (DRHP p.98). Apsis Aerocom had revenue of ₹30.6 crore, about 2.2 times the company's, up 49.56%, with a PAT margin of 24.51% (DRHP p.99).

The document prints their P/E on September 29, 2026 closing prices as 19.62 and 71.43, an average of 45.33 (DRHP p.94, DRHP p.95). The company's FY26 EPS is ₹2.79 after the split and bonus (DRHP p.95). With no price band, no P/E for the company can be stated.

17Risks, in plain words

Madhavaa Crafts IPO risks

Customers: concentration: the top ten customers were 97.31% of FY26 revenue and the largest 35.75%, after 74.32% in FY25 (DRHP p.23) → there are no long-term contracts and customers can cut schedules at short notice (DRHP p.24) → losing one large customer would remove a share of revenue the rest could not quickly replace.

Customers: order book on one agreement: ₹21.4 crore of the ₹25.5 crore order book is one ZF Rane Automotive India Private Limited scheduling agreement due by March 2027 (DRHP p.122), with ₹0.69 crore executed by September 22, 2026 (DRHP p.128) → values under scheduling agreements are the customer's estimates and can be revised (DRHP p.29) → that customer's FY26 revenue was ₹0.62 crore (DRHP p.136).

Promoters: related-party trade: purchases from the promoter's proprietorships were 54.9% of FY26 purchases, and ₹1.3 crore of receivables, 39.5%, was owed by them (our arithmetic, DRHP p.49, DRHP p.50) → the terms of these dealings are not given in the pages that could be read.

Promoters: property: the only factory is rented from Priya Lavaniya to July 31, 2027, and the ₹19.1 crore new factory is to be built on Priya Lavaniya's land with no stated terms (DRHP p.140, DRHP p.79) → the company's main assets would sit on land it does not own.

Business: one shop: all production is in one 3,552 sq. ft. unit with no alternative facility, and its single horizontal machining centre and coordinate measuring machine are not duplicated (DRHP p.23, DRHP p.30) → fire and burglary cover totals ₹11.3 crore (DRHP p.140).

Issue-specific: execution: the new factory is ₹19.1 crore against FY26 revenue of ₹13.6 crore and net worth of ₹6.2 crore; no machinery is ordered and all site approvals are still to be applied for (DRHP p.76, DRHP p.46, DRHP p.45, DRHP p.36, DRHP p.81) → commercial operation is scheduled for January 2028 (DRHP p.81).

Financial: working capital plan: the company plans working capital of ₹35.0 crore by March 2028, of which ₹32.2 crore is to come from internal accruals (DRHP p.82, DRHP p.76) → FY26 profit after tax was ₹2.1 crore (DRHP p.46).

Financial: lender consent: consents from Bank of Baroda, HDFC and Yes Bank and no objection certificates from lenders are pending (DRHP p.29) → proceeding without them could be a default under the loan agreements (DRHP p.30).

Regulation and compliance: physical share transfers in March 2026, gaps in charge filings and late filings with the Registrar of Companies, and past delays in ESIC returns for which penalties were paid (DRHP p.32, DRHP p.35) → the company cannot quantify any penalty and says none will be paid from issue money (DRHP p.32).

Issue-specific: price paid before the issue: the promoters' average cost is ₹4.00 a share and the two outside holders paid ₹87.2 a share after the bonus in September 2026 (DRHP p.38, DRHP p.99).

18Litigation and regulatory matters

Cases against Madhavaa Crafts and its promoters

Criminal: none by or against the company, its subsidiary, promoters, directors or key managerial personnel (DRHP p.234, DRHP p.235). Regulatory: no actions by statutory or regulatory authorities against any of them, and no SEBI or stock exchange action against the promoters in five years (DRHP p.233, DRHP p.235). Civil: no material civil litigation (DRHP p.234). Tax: the company has nine tax proceedings totalling ₹0.13 crore, six direct and three indirect (DRHP p.234). The subsidiary and the other directors have none (DRHP p.235). The company also records historical non-compliance in share transfers, auditor and charge filings and late Registrar of Companies filings, and cannot quantify any penalty (DRHP p.32).

19Related-party transactions

Source: DRHP p.49, converted from ₹ lakh. The enterprises are Shivalaya Universe Kitting Divisionn and Aadhavan Engineering, sole proprietorships of Priya Lavaniya, which the related-party list describes as enterprises where a director has significant influence (DRHP p.49, DRHP p.167). The summary groups transactions by type of party, not by name; the detailed annexure sits in the image pages of the restated statements and could not be read (DRHP p.49).

Balances at March 31, 2026: loans from directors ₹0.39 crore, against ₹1.4 crore at March 2025 and ₹2.2 crore at March 2024; trade payables to the enterprises ₹0.59 crore; trade receivables from them ₹1.3 crore, against ₹1.2 crore and ₹1.1 crore in the two earlier years (DRHP p.49, DRHP p.50). The promoters' loans are interest free and repayable on demand (DRHP p.216). The factory is rented from Priya Lavaniya, but the related-party summary shows no rent line (DRHP p.140, DRHP p.49).

What appeared or changed in the two years before filing: purchases from the enterprises rose from ₹1.0 crore in FY25 to ₹4.8 crore in FY26, sales to them from ₹0.62 crore to ₹2.2 crore, and loans from directors fell by ₹1.8 crore over two years (DRHP p.49). The subsidiary was formed in September 2025 (DRHP p.49). The document identifies no group companies (DRHP p.170).

20What the offer document does not say

The restated financial statements, numbered RFS-1 to RFS-39, sit on PDF pages 173 to 211 as images with no readable text, so the notes behind the summary figures, including the named related-party annexure, receivable ageing and borrowing notes, could not be read (DRHP p.172). Parts sold, price per part, revenue per customer beyond the top ten and margin by customer or by supply against job-work are not given. Customer retention is not disclosed.

What the company buys from and sells to the promoter's proprietorships, and at what prices, is not stated. When and why Multiplier Share and Stock Advisors Private Limited and Komalay Investrade Private Limited lent the company the loans converted in September 2026 is not stated. The terms on which the new factory will use the promoter's land are not stated. The machine hours the new factory adds are not stated.

The issue size in rupees, the price band, general corporate purposes and issue expenses are blank (DRHP p.76). The after-issue shareholding is blank (DRHP p.71). The Indian market for contract machined components is not sized.

Some inconsistencies are recorded as document matters, not business ones: the order book is 29 orders from 12 customers on one page and 31 orders from 13 customers on another (DRHP p.122, DRHP p.29); the largest customer's share and the top ten share differ across pages (DRHP p.23, DRHP p.130, DRHP p.232), as do the top ten suppliers, 95.44% against 91.19% in FY26 (DRHP p.25, DRHP p.232);

the company serves 12 industries on one page and 15 on another (DRHP p.121, DRHP p.130); the existing unit is 3,552 sq. ft. in one place and 1.00 acres in another (DRHP p.133, DRHP p.77); a note gives net asset value on 1,31,55,600 shares after a 5:1 bonus while the bonus was 3:2 and the shares number 80,74,640 (DRHP p.123, DRHP p.65);

the MD&A says the bonus took shares to 75,01,250, leaving out the September 2026 conversion (DRHP p.231); one page says there has been no conversion of loans into equity while two conversions are recorded (DRHP p.150, DRHP p.65); one page says the directors are not related to each other while the promoter group table lists the two promoters as spouses (DRHP p.164, DRHP p.168);

one page says there were no contractual employees at March 2026 while labour charges for contract labour rose in FY26 (DRHP p.139, DRHP p.226); the plant and machinery cost is ₹290.05 lakh in one line and ₹290.50 lakh in the next (DRHP p.79); the monitoring agency statements conflict (DRHP p.54, DRHP p.36); a risk factor says the objects were appraised by banks while the objects chapter says they were not (DRHP p.37, DRHP p.91);

and the KPI notes describe revenue as fees, commission, consultancy and brokerage income (DRHP p.96).

21Five questions for management

1. How much of FY26 revenue growth came from bought-in material in supply-basis parts, and how much from machining value added, per machine hour?
2. What exactly were the ₹4.8 crore of purchases from, and the ₹2.2 crore of sales to, the promoter's two proprietorships in FY26, and why were ₹1.1 crore of receivables from them outstanding at March 2024 against ₹0.06 crore of FY24 sales?
3. On what terms, rent and tenure will the company occupy the promoter's land at Arasipalayam once ₹16.2 crore of buildings are put up on it?
4. What volumes and prices underlie the ₹21.4 crore pending ZF Rane Automotive India scheduling agreement, and how much of it has been executed since September 22, 2026?
5. What revenue does the working capital plan of ₹35.0 crore at March 2028 assume, and how many machine hours will the new factory add?

2Sources and cited facts

This study was read from 2 documents the company filed. The 167 figures it cites are listed under the document each came from, with the page and the sentence as printed.