Microfilter Polymers Limited IPO

01At a glance

What the company does: makes PP filter cartridges, PP wound cartridges, copper and alkaline filters and other parts used in domestic, industrial and commercial reverse osmosis systems, assembles purifiers, and executes water treatment, sewage treatment, effluent treatment and EPC work, partly as a sub-contractor (DRHP p.183, DRHP p.184).

Who pays it: business customers, almost all in Maharashtra. The largest customer brought 27.27% of FY26 revenue, the top five 74.27% and the top ten 89.32% (DRHP p.33). No customer is named. Maharashtra was 95.60% of FY26 revenue (DRHP p.31).

Why it is raising money: ₹23.3 crore of the fresh issue is for machinery, utilities and a rooftop solar and battery system at a second plant in MIDC Hingna, Nagpur, and ₹7.6 crore for repaying bank borrowings; the general corporate purposes amount is blank (DRHP p.125). The 9,60,000 offer for sale shares go to the selling shareholders, not the company (DRHP p.123).

How fast it has grown: revenue from ₹16.2 crore in FY24 to ₹52.1 crore in FY26, about 79.5% a year, and profit after tax from ₹1.2 crore to ₹6.5 crore, about 128.4% a year (our arithmetic, DRHP p.78, DRHP p.79).

The one thing to understand: profit has not turned into cash. Operating cash flow was negative in each of the three years, −₹1.7 crore in FY26, while borrowings went from nil at March 2024 to ₹13.0 crore at March 2026 (DRHP p.80, DRHP p.50). The order book at September 21, 2026 is ₹61.6 crore, larger than FY26 revenue, and 97% of it is two pipe supply orders placed in August 2026 (DRHP p.216, DRHP p.217, our arithmetic).

02The business, in plain words

What Microfilter Polymers does

Microfilter Polymers turns polypropylene granules and yarn into the filter cartridges that sit inside a home or office reverse osmosis purifier: sediment cartridges, wound cartridges, copper and alkaline filters, filter housings and clamps (DRHP p.188, DRHP p.191, DRHP p.234). It also assembles complete purifiers, from an 8 litre per hour home unit and an 18 litre gravity purifier to industrial plants of 250 to 25,000 litres per hour (DRHP p.191, DRHP p.192). It sells under the names Microfilter, Jordan and Axtron, none of them yet registered as a trademark, and makes white-label products that customers market under their own brands (DRHP p.183, DRHP p.55).

A purifier maker or a factory needs filter parts or a treatment plant → the company buys PP granules and yarn in India → it moulds, spins and winds cartridges, assembles systems, or designs and installs a plant → it invoices the product, the project or the service (DRHP p.183, DRHP p.185, DRHP p.234).

The second half of the business is project work: water treatment plants, sewage treatment plants, effluent treatment plants and EPC contracts, from design and drawings to installation, testing and commissioning, sometimes as a sub-contractor (DRHP p.185, DRHP p.186). It also trades in equipment it does not make, and earns from installation and maintenance (DRHP p.186). It started recently selling on Amazon, Meesho and Flipkart (DRHP p.238).

The company was incorporated on July 5, 2021, became a public company with a fresh certificate dated August 28, 2024, and bought the business of Janak Sons Industries, the promoters' partnership firm, for ₹3.50 crore with effect from December 31, 2023 (DRHP p.3, DRHP p.85). It works from one plant at W-19, MIDC Hingna, Nagpur, of 680 sq. mtr. with 235.68 sq. mtr. built up (DRHP p.194). It had 18 full-time employees at March 31, 2026, seven of them factory workers (DRHP p.236, DRHP p.237).

Earnings equation: Revenue = tonnes moulded × price per tonne for filter parts, plus project value × share completed for plants and EPC. The document gives tonnes made (1,575.58 MT in FY26) but no prices and no project count, so the equation cannot be filled in from the filing (DRHP p.45).

03Where the money comes from

By line of business (₹ crore):

Source: DRHP p.186, DRHP p.187, converted from ₹ lakh. Manufacturing was 54.92% of FY26 revenue, EPC 15.42% and trading 9.55% (DRHP p.186, DRHP p.187). No segment profit is given.

By place: Maharashtra 98.03% of FY24 revenue and 95.60% of FY26 (DRHP p.31). Exports: ₹0.21 crore to the Maldives in FY26, nil before (DRHP p.188).

Microfilter Polymers customers: how concentrated the revenue is

Source: DRHP p.33. Revenue depends on a few customers: the top five brought ₹38.7 crore of FY26 revenue of ₹52.1 crore (DRHP p.33). In FY26 the largest customer, ₹14.2 crore, bought manufactured goods, traded goods and installation; the second, ₹12.3 crore, bought manufactured goods and EPC work (DRHP p.34). No customer is named and there are no long-term contracts (DRHP p.57).

Suppliers: the largest was 21.98% of FY26 purchases, the top five 55.15% and the top ten 72.07% (DRHP p.37). None is named.

04The growth record

Microfilter Polymers financials: revenue, profit and margins

Source: DRHP p.77, DRHP p.78, DRHP p.79, DRHP p.80, DRHP p.153, DRHP p.154, converted from ₹ lakh. PAT margin is on total income, as the document computes it (DRHP p.154).

Revenue: ₹16.2 crore in FY24 to ₹52.1 crore in FY26 (DRHP p.78). Profit after tax: ₹1.2 crore to ₹6.5 crore (DRHP p.79). Growth over FY24 to FY26: revenue about 79.5% a year (our arithmetic, DRHP p.78), EBITDA about 129.8% a year (our arithmetic, DRHP p.153), profit after tax about 128.4% a year (our arithmetic, DRHP p.79). EBITDA margin: 10.94% to 17.92%, up 698 basis points, so 10.9% to 17.9% (DRHP p.153).

The company puts the margin rise down to materials falling from 69.40% of revenue in FY24 to 55.42% in FY26 (DRHP p.352). The year ends on March 31 throughout. FY24 includes the Janak Sons business only from December 31, 2023, and the company held no fixed assets before that business came in (DRHP p.85, DRHP p.326). Restatement moved profit little: FY26 profit was ₹6.4 crore audited and ₹6.5 crore restated (DRHP p.336). The FY26 financials were re-audited by a peer-reviewed firm because the statutory auditor holds no peer review certificate (DRHP p.31).

What sits around the record:

• Cash: operating cash flow −₹1.7 crore in FY26, −₹3.9 crore in FY25, −₹0.18 crore in FY24 (DRHP p.79). In FY26 inventory absorbed ₹8.1 crore and loans and advances ₹3.3 crore (DRHP p.79).
• Other income: ₹0.36 crore in FY26, ₹0.34 crore of it creditors written back; about 4.2% of FY26 profit before tax of ₹8.7 crore (our arithmetic, DRHP p.331, DRHP p.78).
• Debt: borrowings ₹13.0 crore at March 31, 2026 (DRHP p.50), debt to equity 0.79 times, so 0.8× (DRHP p.154). Cash was ₹5.4 crore, so net debt ₹7.5 crore, about 0.8× FY26 EBITDA (our arithmetic, DRHP p.80, DRHP p.153). RoCE was 32.59% in FY26, so 32.6% (DRHP p.154). Finance cost ₹0.92 crore in FY26 against ₹0.20 crore in FY25 (DRHP p.78).
• Customers and suppliers: largest customer 27.27%, so 27.3% (DRHP p.33); top five 74.27%, so 74.3% (DRHP p.33); top ten 89.32%, so 89.3% (DRHP p.33); top ten suppliers 72.07% of FY26 purchases, so 72.1% (DRHP p.37).
• Related parties: related-party expense transactions ₹1.6 crore in FY26, 3.54% of total expenses (DRHP p.46).
• Capacity: the plant ran at 93.78% of installed capacity in FY26, so 93.8% (DRHP p.45).
• Contingent liabilities: ₹0.23 crore at March 31, 2026 (DRHP p.81).
• Order book: ₹61.6 crore at September 21, 2026 (DRHP p.217).
• Use of the issue: ₹23.3 crore for capital expenditure and ₹7.6 crore for debt repayment (DRHP p.125).

05What the growth is made of

Revenue rose ₹35.9 crore from FY24 to FY26 (our arithmetic, DRHP p.78).

Manufacturing: from ₹8.7 crore to ₹28.6 crore, which the company links to more installed capacity and new products (DRHP p.186, DRHP p.47). Installed capacity rose from 960 MT to 1,680 MT and output from 795 MT to 1,575.58 MT (DRHP p.44, DRHP p.45). Two new lines, melt blown and wound cartridges, started in FY25 (DRHP p.44).

New project lines: sewage and effluent treatment plants went from nil to ₹3.9 crore and installation and maintenance from nil to ₹2.2 crore (DRHP p.186, DRHP p.187). EPC work went from ₹2.8 crore to ₹8.0 crore (DRHP p.186, DRHP p.187).

Trading: ₹4.5 crore in FY24, 27.91% of revenue, ₹1.6 crore in FY25 and ₹5.0 crore in FY26 (DRHP p.187).

Acquisition: the Janak Sons business came in from December 31, 2023, so FY24 carries about one quarter of it and FY25 the first full year (DRHP p.85). The document does not give Janak Sons' own revenue.

The document gives tonnes but no prices, and no split of revenue by product, so the increase cannot be separated into volume and price. That is the finding.

06Earnings quality

The item that needs explaining is working capital. Inventory went from ₹2.9 crore at March 2024 to ₹14.0 crore at March 2026: ₹5.2 crore raw materials, ₹3.1 crore work in progress and ₹5.7 crore finished goods (DRHP p.78, DRHP p.328). Advances to suppliers were ₹4.6 crore at March 2026 (DRHP p.330). Of ₹12.2 crore of receivables, ₹11.1 crore was under six months old and ₹0.63 crore was two to three years old (DRHP p.329). FY26 other income includes ₹0.34 crore of creditors written back (DRHP p.331).

07The balance sheet

At March 31, 2026 total assets were ₹42.3 crore: inventories ₹14.0 crore, trade receivables ₹12.2 crore, short-term loans and advances ₹7.0 crore, cash ₹5.4 crore and property, plant and equipment ₹2.9 crore (DRHP p.77, DRHP p.78). Against them: short-term borrowings ₹10.5 crore, long-term borrowings ₹2.5 crore, trade payables ₹5.5 crore, other current liabilities ₹4.6 crore, short-term provisions ₹2.7 crore and net worth ₹16.4 crore (DRHP p.77).

Borrowings at March 31, 2026 (DRHP p.345, DRHP p.346):

• SIDBI STEP working capital term loan ₹2.0 crore at 8.80%.
• SIDBI plant and machinery term loan ₹1.0 crore.
• Bank of Maharashtra cash credit ₹4.6 crore at 11.00%.
• TJSB Sahakari Bank cash credit ₹5.3 crore at 9.85%.
• Interest-free loan from Shailendra Mangal ₹0.10 crore.

TJSB also sanctioned ₹17.0 crore of term loans for buying and renovating the second plant and for machinery, not drawn at March 31, 2026 (DRHP p.346). The loans carry personal guarantees of Shailendra Mangal and Ritu Mangal, the TJSB loans also of Samrudhi Mangal, and a mortgage on a Nagpur flat owned by Shailendra Mangal and Ritu Mangal (DRHP p.347, DRHP p.348). Income tax of ₹0.80 crore for FY25 was unpaid at March 31, 2026 (DRHP p.42).

Source: DRHP p.367, DRHP p.125. The capitalisation statement leaves the post-issue column blank (DRHP p.367).

08What the money is for

Microfilter Polymers IPO objects: what the money is for

Source: DRHP p.125, DRHP p.145. 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.124).

Facility II, ₹23.3 crore: ₹18.2 crore of plant, machinery and utilities and ₹5.1 crore for a solar and battery system (DRHP p.127). The machinery is 13 injection moulding machines of 260 to 650 tonnes from Electronica Plastic Machines (₹3.7 crore) and Futech Machinery (₹6.0 crore), and dryers, conveying and weighing systems from Admach Systems (₹8.5 crore) (DRHP p.131, DRHP p.132, DRHP p.135).

The solar part is a 600 kWp rooftop system (₹1.8 crore) and a 2,090 kWh battery (₹3.3 crore) from Kalpa Power (DRHP p.137). No orders are placed (DRHP p.125). The plot is leasehold land of 10,500 sq. mtr. assigned from Neco Heavy Engineering and Casting Private Limited on May 25, 2026; the document does not state its price (DRHP p.128, DRHP p.129). Commercial production is planned from April 2027 (DRHP p.140).

A transformer and power works of ₹2.2 crore are to be paid from own funds and loans, not the issue (DRHP p.136).

Debt repayment, ₹7.6 crore: up to ₹5.0 crore of the TJSB Sahakari Bank cash credit, ₹0.89 crore of the SIDBI plant loan and ₹1.7 crore of the SIDBI STEP loan; these stood at ₹8.8 crore on August 31, 2026 (DRHP p.143). SIDBI charges 3.00% for prepayment, to be met from internal accruals (DRHP p.143, DRHP p.142).

The objects have not been appraised by any bank, and no monitoring agency is appointed because the fresh issue is under ₹50 crore (DRHP p.52).

Into the business the fresh issue of up to 50,00,000 shares, at a price not yet set (DRHP p.3). To selling shareholders up to 9,60,000 shares, at a price not yet set (DRHP p.3).

09Who is selling

Microfilter Polymers IPO offer for sale: who is selling

Source: DRHP p.123, DRHP p.124; the last column is our arithmetic. Together they hold 19,57,095 shares and offer 9,60,000, which is 16.1% of the 59,60,000 shares in the issue (DRHP p.124, our arithmetic). Each is classed as a public selling shareholder, and all except Simstreet gave Simstreet a power of attorney to act for them (DRHP p.124). Their average cost per share ranges from ₹4.18 to ₹31.95 after the bonus issues (DRHP p.64).

10Promoters

The promoters are Shailendra Mangal, Ritu Mangal and Samrudhi Mangal (DRHP p.283). The document states that Shailendra Mangal and Ritu Mangal are spouses and that Samrudhi Mangal is their daughter (DRHP p.265).

Shailendra Mangal, 49, is Chairman and Managing Director, a commerce graduate with more than 10 years in water purification (DRHP p.262). Ritu Mangal, 45, is Whole Time Director, an arts graduate with more than 10 years in the industry, handling packaging, advertising and human resources (DRHP p.262). Samrudhi Mangal, 20, is a non-executive director, studying for a BBA and handling social media and e-commerce (DRHP p.262). The document says the business is highly dependent on Shailendra Mangal (DRHP p.59).

Pay: remuneration was ₹0.10 crore for the two executive promoters together in FY24 and ₹0.60 crore in FY26, ₹0.30 crore each (DRHP p.84). The approved limit for Shailendra Mangal is up to ₹0.60 crore a year (DRHP p.266).

Other businesses: the promoter group includes Janak Sons Industries, JBS Techno Trade, YES Polymer and Micro Power Private Limited (DRHP p.290). Janak Sons Industries is in a similar line of business (DRHP p.288). The company bought goods of ₹0.51 crore from Yes Polymers in FY26 (DRHP p.84). The document says there is no group company (DRHP p.289).

Guarantees and loans: the promoters guarantee the bank loans and have mortgaged their flat for them (DRHP p.347). Shailendra Mangal lent ₹0.24 crore in FY26 and was repaid ₹0.40 crore; ₹0.10 crore was owed at March 31, 2026 (DRHP p.83, DRHP p.84). No promoter shares are pledged (DRHP p.113).

Cases: no criminal or regulatory cases against the promoters (DRHP p.370). Matters against the promoters, twelve on tax and two statutory, are stated at ₹0.65 crore in all (AP p.11).

Promoter economics: the promoters subscribed 10,000 shares at ₹10 in July 2021; Shailendra Mangal sold 1,864 of those shares at ₹5,000 each on March 8, 2024 to eight buyers, about ₹0.93 crore (DRHP p.104, DRHP p.112, our arithmetic). Their remaining shares grew through a 398:1 bonus in December 2024 and a 2:1 bonus in August 2026 (DRHP p.112, DRHP p.113). The document puts their average cost at ₹0.01 a share (DRHP p.64).

11Who already owns it

Microfilter Polymers promoter holding before and after the IPO

Source: DRHP p.110. There are 1,41,00,660 shares of ₹10 before the issue and 41 shareholders (DRHP p.102, DRHP p.259). Promoters hold 97,38,792 shares, 69.07% (DRHP p.111). If all 50,00,000 new shares are issued, the total becomes 1,91,00,660 shares and the promoters' 69.1% becomes about 51.0% (our arithmetic, DRHP p.102, DRHP p.111). The promoters offer no shares. The document leaves the after-issue holding blank (DRHP p.114).

Minerva Ventures Fund came in at ₹25,500 a share in the preferential allotment of March 27, 2024 (DRHP p.105). Simstreet Advisors Private Limited bought 1,74,762 shares from Avyukt Investment Holdings at ₹20 a share on January 30, 2025, ₹6.67 after the bonus (DRHP p.158).

12What changed just before the IPO

• Revenue and profit: revenue ₹16.2 crore in FY24 to ₹52.1 crore in FY26 (DRHP p.78); profit after tax ₹1.2 crore to ₹6.5 crore (DRHP p.79).
• Receivables: about 160 days of revenue at March 2024 and 86 at March 2026 (our arithmetic, DRHP p.78).
• Promoter pay: ₹0.10 crore in FY24 to ₹0.60 crore in FY26 (DRHP p.84).
• Borrowings: nil at March 2024 to ₹13.0 crore at March 2026 (DRHP p.80, DRHP p.50).
• Business bought from the promoters: Janak Sons Industries, on a slump sale for ₹3.50 crore, from December 31, 2023 (DRHP p.85).
• Promoter share sale: 1,864 shares at ₹5,000 on March 8, 2024 (DRHP p.112).
• Pre-IPO placement: 1,091 shares at ₹25,500 on March 27, 2024 and 689 shares at ₹25,500 on April 30, 2024, the last priced allotment (DRHP p.104).
• Bonus issues: 398:1, allotted December 24, 2024, 46,88,440 shares; and 2:1, allotted August 11, 2026, 94,00,440 shares (DRHP p.105).
• Conversion: public company by special resolution of May 27, 2024, fresh certificate dated August 28, 2024 (DRHP p.3).
• Auditor: TSKK and Co LLP resigned in August 2023; MTS and Associates resigned on August 23, 2024; M S Rathi & Associates was appointed the same day (DRHP p.53, DRHP p.54).
• Officers: chief executive, chief financial officer and company secretary all appointed from December 7, 2024 (DRHP p.83).
• Second plant: leasehold of Plot F-09/17, MIDC Hingna assigned on May 25, 2026 (DRHP p.365).
• Approvals: a factory licence was obtained on December 22, 2025 with effect from January 1, 2024, and pollution board consents in September and November 2025 (DRHP p.36).
• Dividend: none in the last three years (DRHP p.293).

13Capacity and expansion

Source: DRHP p.44, DRHP p.45, DRHP p.129, DRHP p.140; the Facility II addition is our arithmetic. Utilisation was 82.81%, 86.06% and 93.78% over FY24 to FY26 (DRHP p.45). Expanded capacity is put at 7,200 MT: 1,921.20 MT from machines bought with own funds and loans, including 1,050 MT of LDPE pipe lines, and 3,598.80 MT from the issue (DRHP p.129). Three moulding machines costing ₹1.7 crore were already financed by TJSB Sahakari Bank (DRHP p.129).

The pollution board permits 600 MT a year at Facility I, against production of about 1,000 to 1,150 MT, and an increase has been applied for (DRHP p.37). Facility II holds a consent to establish for 50 MT a month, and an expansion application was made on September 29, 2026 (DRHP p.141). The document gives tonnes but not prices, so the step from capacity to revenue cannot be made here.

14Market size and industry structure

Microfilter Polymers industry: market size and growth

As claimed: the industry chapter is not a commissioned report. It is drawn from public sources: the IMF World Economic Outlook, IBEF pages, a NITI Aayog white paper on wastewater and a CIEL HR hiring study, and the company says it has not verified it (DRHP p.165, DRHP p.168, DRHP p.181, DRHP p.182). It gives no size for the water purifier, filter cartridge, water treatment or EPC markets in rupees.

The part that is addressable: the company sells filter parts and purifiers for reverse osmosis systems, and water, sewage and effluent treatment plants, almost all in Maharashtra (DRHP p.183, DRHP p.31). The nearest measure the chapter gives is wastewater volume. It puts India's sewage generation in urban centres at 72,368 million litres a day and in rural areas at 39,604 million litres a day for 2020-21 (DRHP p.180).

What the company is today: FY26 revenue of ₹52.1 crore (DRHP p.78). The chapter gives no rupee market to set it against, so no market share can be worked out.

Size over time: the chapter's figures are economy-wide. India's real GDP is estimated at ₹3,23,12,034 crore in FY2025-26, up 7.7% (DRHP p.168). Manufacturing is about 17% of GDP, and manufacturing GVA grew 11.60% in FY2025-26 (DRHP p.172, DRHP p.173). The IMF projects global growth of 3.0% in 2026 and 3.4% in 2027, and India's at 6.4% (DRHP p.166, DRHP p.167). On wastewater, a study cited in the chapter puts global wastewater at 380 billion cubic metres a year and projects it to rise 24% by 2030 and 51% by 2050 (DRHP p.180). These are the sources' estimates and projections, not figures from the company's accounts.

Segments: the chapter covers manufacturing, infrastructure, wastewater and EPC as separate topics (DRHP p.172, DRHP p.176, DRHP p.180, DRHP p.182). It does not split water treatment into purifiers, cartridges, municipal plants or industrial effluent plants, so the company's segment is not sized.

What drives demand: the chapter names the gap in sewage treatment. Installed urban treatment capacity is 31,841 million litres a day, operational capacity 26,869, and only 28% of urban sewage, 20,236 million litres a day, was treated, leaving a gap of 35,700 million litres a day even after proposed capacity (DRHP p.181). It also names urbanisation (DRHP p.180), government infrastructure spending, with the National Infrastructure Pipeline at ₹213 trillion across about 14,563 projects (DRHP p.177), and manufacturing schemes such as PLI (DRHP p.171). Worldwide, about 40% of wastewater is said to be discharged untreated (DRHP p.181).

Structure: the chapter names no competitors and gives no market shares. The risk factors describe the company's markets as competitive and fragmented, with listed and unlisted Indian companies and many regional players, and with relatively low barriers to entry for some products (DRHP p.61). The company names two listed peers in water treatment engineering, Enviro Infra Engineers Limited and Effwa Infra & Research Limited (DRHP p.152).

Inputs and trade: the chapter does not cover raw materials or trade. The business chapter says the main raw material is virgin polypropylene granules and yarn, bought in India at suppliers' rates without long-term contracts (DRHP p.234). The risk factors say raw material prices can swing and may not be passed on (DRHP p.37, DRHP p.58).

Rules: the chapter does not discuss licences. Elsewhere the document says water purifiers need BIS registration under IS 16240 under the Water Purification Rules, which the company is still obtaining, and that registration under the Plastic Waste Management Rules, 2016 and the E-Waste Rules, 2022 is still to be obtained (DRHP p.36). STP and ETP work is designed to meet discharge standards (DRHP p.186).

What the chapter says can go wrong: the Middle East conflict, higher energy and food prices, tariffs and trade fragmentation (DRHP p.165, DRHP p.166); a widening shortage of experienced engineers in EPC (DRHP p.182). The company says its business is not seasonal (DRHP p.364).

15Competitive position

Microfilter Polymers competitors

Source: DRHP p.154, DRHP p.156, converted from ₹ lakh. The peers' PAT margins are on total income, as the document computes them (DRHP p.157). The document does not say whether either peer makes filter cartridges.

What the company puts forward: experienced promoters, existing customer relationships, ISO 9001:2015, CE and RoHS certificates, and in-house design and engineering for STP, ETP and WTP projects (DRHP p.214, DRHP p.215). Against that, it names its own weaknesses as limited geographic presence, high initial costs and a high working capital need that limits how many projects it can take (DRHP p.232). Its design and engineering work rests on one key person (DRHP p.52), and none of its brand names is registered (DRHP p.56).

16Peers the company named

Peers named in the offer document: Enviro Infra Engineers Limited, Effwa Infra & Research Limited (DRHP p.152).

Both are listed water and wastewater treatment engineering companies. Enviro Infra's FY26 revenue of ₹1,145.6 crore is about 22 times the company's, and Effwa's ₹253.3 crore about five times (our arithmetic, DRHP p.156). The document gives their P/E as 18.90 and 28.89 at September 15, 2026 prices, an average of 23.89 (DRHP p.151, DRHP p.152). The company's FY26 EPS is ₹4.59 on ₹10 shares after the bonus issues (DRHP p.152). With no price band, no P/E for the company can be stated.

17Risks, in plain words

Microfilter Polymers IPO risks

Regulation: tax demand: a GST demand for FY2022-23 of ₹2.88 crore, ₹1.60 crore tax and ₹1.28 crore interest, after a scrutiny of mismatched returns; the company replied on March 25, 2026 and it is pending (DRHP p.369) → an adverse outcome would be paid from the company's own funds → the demand equals about 18% of March 2026 net worth of ₹16.4 crore (our arithmetic, DRHP p.369, DRHP p.77).

Regulation: plant approvals: the factory ran without a valid factory licence until December 31, 2023 and without pollution board consent until September 26, 2025, and it produces about 1,000 to 1,150 MT against 600 MT permitted (DRHP p.36, DRHP p.37) → the board can restrict output at the only plant → the plant made all of FY26's 1,575.58 MT (DRHP p.45). BIS registration for purifiers is still pending (DRHP p.36).

Financial: cash and working capital: operating cash flow was negative in all three years (DRHP p.79) → growth is paid for with bank credit → borrowings rose from nil to ₹13.0 crore and working capital is about 40% of revenue (DRHP p.80, our arithmetic, DRHP p.78).

Customers: the top five brought 74.27% of FY26 revenue and Maharashtra 95.60% (DRHP p.33, DRHP p.31) → losing one large customer would cut revenue sharply → the largest brought ₹14.2 crore (DRHP p.34).

Business: order book: the ₹61.6 crore order book is 97% two pipe supply orders of ₹43.5 crore and ₹16.4 crore placed in August 2026, due by December 2026, and nothing is invoiced yet (DRHP p.216, DRHP p.217, our arithmetic) → ductile iron and steel pipes are not among the products the company lists as made at its plant → the company warns the order book may not turn into revenue (DRHP p.51).

Issue-specific: the new plant: no machinery is ordered, and approvals for Facility II, including the factory licence and fire certificate, had not been applied for when the risk factors were written (DRHP p.46, DRHP p.52) → delays push back output → the capex from the issue is ₹23.3 crore against FY26 fixed assets of ₹2.9 crore (DRHP p.125, DRHP p.77).

Promoters and compliance: PF and ESIC were paid up to 608 days late, some ROC forms were filed up to 1,741 days late, and a compounding case over late AGMs is pending (DRHP p.43, DRHP p.49, DRHP p.41) → penalties and further action are possible → the regional director's order levied ₹0.09 crore, still unpaid as the case moved between forums (DRHP p.41).

Business: people: 18 full-time employees at March 2026, with attrition of 90.91% in FY25 and 28.57% in FY26 (DRHP p.236, DRHP p.237) → project work rests on labour and one design engineer → installation and commissioning costs were 18.96% of FY26 revenue (DRHP p.55).

18Litigation and regulatory matters

Cases against Microfilter Polymers and its promoters

Criminal: none by or against the company, promoters, directors or key managerial personnel (DRHP p.369, DRHP p.370, DRHP p.373). Regulatory: no action by SEBI or the exchanges against the promoters (DRHP p.370). Tax: the company's six tax matters total ₹3.4 crore and the promoters' twelve ₹0.60 crore, six of them against Janak Sons Industries (DRHP p.35, DRHP p.36). Contingent liabilities: ₹0.23 crore, which does not include the GST demand (DRHP p.81). Creditors: two material creditors were owed ₹4.1 crore at March 31, 2026 (DRHP p.375).

19Related-party transactions

Source: DRHP p.83, DRHP p.84, converted from ₹ lakh. Key managerial personnel were paid ₹1.0 crore in FY26 in short-term benefits (DRHP p.85). The promoters' personal guarantees cover the SIDBI, Bank of Maharashtra and TJSB Sahakari Bank loans (DRHP p.85).

What appeared or changed in the two years before filing: the Janak Sons business came in from December 31, 2023 and its rent stopped; the Facility I leasehold was assigned from the firm by a deed of August 20, 2025; promoter remuneration rose; promoter loans began in FY25; and purchases from Yes Polymers began in FY25 (DRHP p.85, DRHP p.39, DRHP p.84). The company says these transactions are at arm's length (DRHP p.85).

20What the offer document does not say

Customers and suppliers are not named. Prices and revenue by product are not given, so growth cannot be split into volume and price. Segment profit is not given. The price paid for the Facility II leasehold is not stated, although ₹2.45 crore was advanced and a ₹13.8 crore property loan was sanctioned for it (DRHP p.330, DRHP p.346). Janak Sons Industries' own revenue and profit before the transfer are not given.

The industry chapter does not size the water purifier, filter or treatment plant market (DRHP p.165). How the company will make or source ductile iron and spirally welded pipes for the two largest orders is not explained (DRHP p.216). The issue size in rupees, the price band, general corporate purposes and offer expenses are blank (DRHP p.125, DRHP p.145). The after-issue shareholding is blank (DRHP p.114).

Some inconsistencies are recorded as document matters, not business ones: return on net worth is 39.46% in the peer table and 49.16% elsewhere for FY26 (DRHP p.152, DRHP p.154); the board table gives Ritu Mangal a different DIN and other directorships from the promoter chapter (DRHP p.262, DRHP p.284); the Facility I leasehold is said to be acquired in FY2023-24 in one note and assigned by a deed of August 20, 2025 in another (DRHP p.324, DRHP p.39); and the risk factors say Facility II approvals are not yet applied for while the objects chapter shows a consent to establish granted on July 27, 2026 (DRHP p.52, DRHP p.141).

21Five questions for management

1. How many tonnes of each cartridge type and how many purifiers were sold in FY24, FY25 and FY26, and at what average price, so that growth can be split into volume and price?
2. Who will make the ductile iron and spirally welded pipes in the ₹61.6 crore order book, what margin do those orders carry, and how much working capital will they need by December 2026?
3. What was paid for the Facility II leasehold, how was it funded, and how much of the TJSB property loan has been drawn since March 2026?
4. What is the status of the ₹2.88 crore GST demand for FY2022-23, and has the unpaid FY25 income tax of ₹0.80 crore been paid?
5. When will BIS registration for purifiers and the pollution board's higher permitted capacity for Facility I be granted, and what output is allowed until then?

2Sources and cited facts

This study was read from 2 documents the company filed. The 190 figures it cites are listed under the document each came from, with the page and the sentence as printed.