Mundada Polychem Limited IPO

01At a glance

What the company does: makes drip irrigation pipes, rain and sub-main pipes, mulch film, shade net and shrink film, and irrigation fittings, from HDPE and LLDPE granules at one plant at Chandanpuri, Malegaon, Nashik (DRHP p.137, DRHP p.145).

Who pays it: dealers in the agriculture trade, with a smaller share sold direct to farmers; the largest dealer was 28.94% of FY26 revenue and the top ten 62.32% (DRHP p.138, DRHP p.139). Maharashtra was 99.92% of FY26 revenue (DRHP p.138).

Why it is raising money: ₹1,663.75 lakh for plant and machinery, ₹900.00 lakh to repay borrowings and ₹572.38 lakh for working capital, with general corporate purposes left blank (DRHP p.92).

How fast it has grown: revenue from ₹3,961.49 lakh in FY24 to ₹6,626.76 lakh in FY26, about 29.3% a year, and profit after tax from ₹147.42 lakh to ₹413.93 lakh, about 67.6% a year (our arithmetic, DRHP p.29).

The one thing to understand: the business is entangled with firms the promoters and their relatives control. In FY26 the company bought ₹637.80 lakh of goods and took ₹117.94 lakh of job work from three such firms, and sold ₹672.76 lakh of goods to them, 10.2% of revenue (our arithmetic, DRHP p.33).

02The business, in plain words

Mundada Polychem buys polyethylene granules, extrudes them into pipes and films, moulds drippers and fittings, and sells the result to agricultural dealers, mostly in Maharashtra (DRHP p.145, DRHP p.138). Drip pipes are punched and fitted with emitters, tested for pressure and leaks, and cut to length before dispatch (DRHP p.146).

A farmer needs to irrigate, mulch or shade a field → a dealer stocks drip pipe, film or fittings → Mundada extrudes and moulds them from HDPE and LLDPE granules at Chandanpuri → Mundada keeps what is left after granules, power, labour and interest.

The company was incorporated in September 2021 and became a public limited company on 3 June 2026 (DRHP p.137, DRHP p.266). It runs one manufacturing facility of about 5,577.68 square metres at Nashik, Malegaon (DRHP p.94). It had 67 employees at 31 March 2026, of whom 47 were helpers and 7 operators; 103 joined and 58 left during FY26, an attrition rate of 136.47% (DRHP p.159, DRHP p.42).

Earnings equation: Profit ≈ kilograms sold × (realisation per kg − granule cost per kg) − power, labour and plant costs − interest. In FY26 cost of materials and components consumed was ₹5,403.43 lakh against revenue of ₹6,626.76 lakh, and the company reports a gross margin of 21.69% against 14.99% in FY24 (DRHP p.29, DRHP p.139).

03Where the money comes from

Source: DRHP p.138.

By geography, FY26 revenue was Maharashtra 99.92% and Telangana 0.07%, against Maharashtra 89.09%, Karnataka 7.62% and Andhra Pradesh 2.13% in FY24 (DRHP p.138). The mix moved: films fell from 58.02% of revenue to 29.43% while pipes went from 30.75% to 43.41% and accessories from 11.23% to 27.16% (DRHP p.138).

Source: DRHP p.36, DRHP p.139. Revenue does depend on a few dealers, and that dependence appeared recently: the largest dealer was nothing in FY24 and about three-tenths of revenue in FY25 and FY26 (DRHP p.139). Purchases are also concentrated: the largest supplier was 25.76% of FY26 purchases, down from 62.76% in FY24, and the top ten 80.89% (DRHP p.139). The prospectus names neither the dealers nor the suppliers in those tables.

04The growth record

Source: DRHP p.139, DRHP p.29, DRHP p.30.

Net worth was ₹229.67 lakh, ₹677.14 lakh and ₹1,117.94 lakh; total borrowings ₹966.47 lakh, ₹1,491.26 lakh and ₹1,939.13 lakh; return on equity 104.80%, 53.21% and 46.12%, return on capital employed 21.90%, 18.85% and 23.82%, and debt to equity 4.21, 2.20 and 1.73 (our arithmetic, DRHP p.28, DRHP p.139). Our arithmetic: revenue grew about 29.3% a year from FY24 to FY26, EBITDA about 62.9% and profit about 67.6%; EBITDA margin rose 442 basis points and PAT margin 253 basis points (DRHP p.139).

05What the growth is made of

Product mix and volume, in opposite directions. Read from the filing: production of drip pipe rose from 8,83,324 kg in FY24 to 12,81,861 kg in FY26 and of rain and sub-main pipe from 35,617 kg to 7,18,821 kg, while production of shade net fell from 15,36,648 kg to 10,54,031 kg (DRHP p.140). Pipe revenue rose ₹1,658.71 lakh over the two years and accessories ₹1,355.02 lakh, while film revenue fell ₹348.46 lakh (our arithmetic, DRHP p.138).

Drippers and fittings were made in-house for the first time in FY25: 63,759 kg of drippers that year and 1,12,223 kg in FY26, against nothing in FY24 (DRHP p.140). Read from the filing: accessories and others went from 11.23% of revenue to 27.16%, and the reported gross margin from 14.99% to 21.69%, over the same period in which that in-house production began (DRHP p.138, DRHP p.139). The prospectus does not give realisation or margin per kilogram by product, so the effect of the shift cannot be separated from price.

06Earnings quality

Two items need explaining. First, inventory: stock went from ₹157.01 lakh at March 2024 to ₹295.41 lakh at March 2025 and ₹1,267.11 lakh at March 2026, an increase of ₹971.70 lakh in FY26 alone, against cost of goods sold of ₹5,189.50 lakh, which is 89 days of cost (our arithmetic, DRHP p.28, DRHP p.30). The prospectus does not explain the jump. Second, government grants: the cash flow statement records receipts of government grant of ₹206.20 lakh in FY25 and ₹26.87 lakh in FY26 within investing activities (DRHP p.30).

07The balance sheet

At March 2026 borrowings were ₹1,939.13 lakh: ₹942.57 lakh long-term and ₹996.56 lakh short-term, against ₹966.47 lakh at March 2024 (our arithmetic, DRHP p.28). The objects chapter puts aggregate outstanding borrowings, excluding borrowings from related parties and including finance lease liabilities, at ₹1,934.15 lakh at 31 March 2026 (DRHP p.97). The lenders are the Small Industries Development Bank of India, Bank of Maharashtra and Siemens Financial Services, for solar plant, machinery and working capital, at rates from 8.70% to 11.50% (DRHP p.98).

Property, plant and equipment was ₹1,609.23 lakh, up from ₹825.60 lakh at March 2024; cash and cash equivalents were ₹7.19 lakh; trade receivables ₹624.28 lakh and inventories ₹1,267.11 lakh (DRHP p.28). Contingent liabilities were nil in all three years (DRHP p.31). Trade payables were ₹505.91 lakh, of which six creditors accounted for ₹341.93 lakh (DRHP p.28, DRHP p.265).

After the issue: the prospectus leaves the issue size blank, so the effect on net worth cannot be worked out; ₹900.00 lakh of the proceeds is earmarked to repay borrowings against ₹1,934.15 lakh outstanding at March 2026 (DRHP p.92, DRHP p.97).

08What the money is for

Source: DRHP p.92. The share of the fresh issue each object takes cannot be worked out, because the issue size and price are left blank.

The machinery is eleven items quoted between 27 August and 11 September 2026 by seven vendors, the largest an inline drip irrigation tube extrusion line at ₹708.00 lakh and a package of accessories from a Chinese supplier at ₹260.70 lakh (DRHP p.94, DRHP p.95).

A chartered engineer has certified that the new machines would add annual capacity of about 1,785 MT of flat drip tubing, 2,040 MT of flat dripper mould output, 1,530 MT of inspected drippers, 3,060 MT of accessories and 765 MT of hydrocole drip tubing (DRHP p.95). No orders had been placed as at the date of the draft, and the prospectus lists that as a risk (DRHP p.96, DRHP p.47).

The money is to be deployed across Fiscal 2027 and Fiscal 2028 (DRHP p.93).

Into the business the whole issue: it is entirely a fresh issue, with the number of shares and the amount left blank (DRHP p.91). To selling shareholders nothing: there is no offer for sale (DRHP p.91).

09Who is selling

No one. The issue is entirely new shares issued by the company; the prospectus records no offer for sale (DRHP p.91). The number of shares to be issued is left blank in this draft (DRHP p.91).

10Promoters

The promoters are Bhavna Sagar Mundada, Kiran Pritesh Mundada, Sagar Vijaykumar Mundada and Pritesh Vijaykumar Mundada, who hold 25,79,990 shares, 85.9997% of the capital before the issue; Tara Vijaykumar Mundada, of the promoter group, holds a further 14.0000% (DRHP p.84). Sagar Vijaykumar Mundada is managing director and chairman and Pritesh Vijaykumar Mundada whole time director, both since 28 September 2021; Kiran Pritesh Mundada is a non-executive director (DRHP p.32). The prospectus states the four promoters bring more than 12 years of combined experience in manufacturing, polymer processing and agricultural technologies (DRHP p.138).

Promoter economics: Bhavna Sagar Mundada and Kiran Pritesh Mundada subscribed to the memorandum at ₹10 a share on incorporation and hold 9,90,000 shares each after two splits (DRHP p.82). Sagar Vijaykumar Mundada and Pritesh Vijaykumar Mundada each bought one share at ₹220 from Tara Vijaykumar Mundada on 15 May 2026, and each received 2,99,990 shares from the same transferor on 11 September 2026 at nil consideration, eleven days before this draft was filed (DRHP p.83). No promoter shares are pledged (DRHP p.84). Promoter remuneration was ₹15.98 lakh in FY24, across three of them, and ₹36.00 lakh in FY26 across two (our arithmetic, DRHP p.32).

Related entities: Balaji Irrigation System is a proprietorship of a director, and Balaji Plastic Industries and Mundada Drip Irrigation System Private Limited are entities in which relatives of a director have significant influence; all three trade with the company in both directions (DRHP p.32, DRHP p.33). Litigation touching the promoters is set out in section 23.

11Who already owns it

Before the issue there are 30,00,000 shares of ₹1 each held by 7 shareholders: the four promoters with 85.9997%, Tara Vijaykumar Mundada of the promoter group with 14.0000%, and two public holders with 5 shares each (DRHP p.84). Promoters and promoter group together hold 99.9997% (DRHP p.84).

The capital has never been raised for cash beyond the subscription on incorporation: the 3,00,000 shares of ₹10 each issued in September 2021 were sub-divided into ₹5 shares on 23 April 2026 and again into ₹1 shares on 31 August 2026, giving 30,00,000 shares (DRHP p.82, DRHP p.83). Everything since has been transfers between the promoters and a promoter group member. Because the issue size is left blank, the shareholding after the issue is not stated (DRHP p.84).

12What changed just before the IPO

• The company became a public limited company on 3 June 2026, having been incorporated in September 2021 (DRHP p.266).
• The face value was split from ₹10 to ₹5 on 23 April 2026 and from ₹5 to ₹1 on 31 August 2026 (DRHP p.82).
• On 11 September 2026 Tara Vijaykumar Mundada transferred 2,99,990 shares each to Sagar Vijaykumar Mundada and Pritesh Vijaykumar Mundada at nil consideration (DRHP p.83).
• The statutory auditor changed twice in three years: CA Rajesh Jakhotya resigned in June 2024, Satish K. Kasliwal & Associates was appointed on 18 June 2024 in casual vacancy and resigned on 28 April 2026, and A O Mittal & Associates LLP was appointed on 4 May 2026 (DRHP p.72).
• The board changed: two independent directors ceased in June 2026 and two were appointed on 14 August 2026; a chief financial officer was appointed on 22 April 2026 and a company secretary on 12 September 2026, the previous one having ceased in June 2026 (DRHP p.32).
• In-house production of drippers and fittings began in FY25 and rose in FY26 (DRHP p.140).
• The largest dealer went from nothing in FY24 to 30.06% of revenue in FY25 and 28.94% in FY26 (DRHP p.139).
• Inventories rose from ₹295.41 lakh at March 2025 to ₹1,267.11 lakh at March 2026 (DRHP p.28).
• Purchases from Mundada Drip Irrigation System Private Limited began in FY26 at ₹217.13 lakh, with a further ₹108.94 lakh of job work (DRHP p.33).
• A suo-motu application was filed on 11 September 2026 for adjudication of penalties for delay in filing Form INC-20A, the declaration for commencement of business, which was filed on 30 April 2026 against a due date of 27 March 2022 (DRHP p.264, DRHP p.44).

13Capacity and expansion

Source: DRHP p.140. Mulch film production was 23,892 kg, 31,407 kg and 58,850 kg over the three years, at 2.63% utilisation in FY26, and fittings 11,812 kg in FY26 at 5.25% (DRHP p.140). The prospectus gives utilisation as a percentage but does not print installed capacity in that table.

Read from the filing: drip pipe is the only line running near its limit, at 93.43%, while shade net, shrink film and mulch film ran at under half; the ₹1,663.75 lakh of machinery is directed at drip tubing, drippers and accessories rather than at film (DRHP p.140, DRHP p.94, DRHP p.95). The prospectus does not say when the new lines would be commissioned, only that the money is to be deployed across Fiscal 2027 and Fiscal 2028 (DRHP p.93).

14Market size and industry structure

As claimed: the industry chapter reproduces material on Indian agriculture from the India Brand Equity Foundation and government sources, including that India's smart agriculture market reached ₹6,033 crore in 2024 and is projected to grow at 20.54% a year to ₹33,325 crore by 2033, and it describes the Per Drop More Crop scheme and the Micro Irrigation Fund (DRHP p.132, DRHP p.136). It does not state a size for the micro irrigation products market or for any market this company sells into, and the company did not commission an industry report for this draft.

The part that is addressable: drip pipes, agricultural films and irrigation fittings sold to dealers, almost entirely in Maharashtra, which was 99.92% of FY26 revenue (DRHP p.138).

What the company is today: one plant, 67 employees and ₹6,626.76 lakh of FY26 revenue (DRHP p.159, DRHP p.29). Because the chapter sizes no relevant market, the company's share cannot be worked out from the filing.

On structure, the prospectus says it faces competition from organised and unorganised players in the agricultural irrigation products industry, and that demand is seasonal and tied to agricultural activity and irrigation requirements (DRHP p.37, DRHP p.54). It also states that certain data in the draft has not been independently verified (DRHP p.53).

15Competitive position

The prospectus names no competitor outside the peer table. It says competition comes from organised and unorganised players and that the company does not have long-term contracts with most customers, working on a purchase order basis (DRHP p.37, DRHP p.43). The reasons it gives for dealers buying from it are a portfolio spanning pipes, films and accessories from one platform, a semi-automated and integrated plant with warehousing, and quality procedures at raw material, in-process and finished stages (DRHP p.138, DRHP p.141).

Against that, some of the company's trade names and its logo are not registered as trademarks (DRHP p.49), some manufacturing premises are leased (DRHP p.45), and it outsources the manufacture of certain components to third parties (DRHP p.37).

16Peers the company named

Peers named in the offer document: Mahindra EPC Industries Limited and R M Drip and Sprinklers Systems Limited (DRHP p.106).

Source: DRHP p.106; peer prices taken from NSE on 11 September 2026, peer financials from consolidated results for the year to 31 March 2026. The prospectus says it has chosen peers in the plastic products industry for broad comparison (DRHP p.105). Mahindra EPC Industries' revenue is about 4.7 times Mundada's and R M Drip's about 3.0 times (our arithmetic, DRHP p.106). The prospectus gives the industry P/E as a high of 29.98, a low of 28.49 and an average of 29.24, but no price band exists yet, so this study works out no valuation (DRHP p.105).

17Risks, in plain words

Related-party trade on both sides: in FY26 the company bought ₹637.80 lakh of goods and ₹117.94 lakh of job work from, and sold ₹672.76 lakh to, three firms controlled by a director or by relatives of a director (our arithmetic, DRHP p.33) → a material part of both the cost base and the order book is set inside the family → related-party sales were 10.2% of revenue and related-party purchases ₹755.74 lakh against total purchases of about ₹6,161 lakh (our arithmetic, DRHP p.33, DRHP p.139).

Dealers: the largest dealer was 28.94% of FY26 revenue and the top five 48.80%, against 15.14% for the top five in FY24 (DRHP p.36, DRHP p.139) → the concentration is new and there are no long-term contracts → business runs on purchase orders (DRHP p.43).

One state, one crop cycle: Maharashtra was 99.92% of FY26 revenue and demand is seasonal, tied to agricultural and irrigation activity (DRHP p.138, DRHP p.37) → a poor monsoon or a state policy change moves the whole company → the prospectus lists seasonal fluctuation as a separate risk factor (DRHP p.37).

Inventory and working capital: inventories rose from ₹295.41 lakh to ₹1,267.11 lakh in FY26, 89 days of cost of goods sold (our arithmetic, DRHP p.28) → cash is tied up in stock in a seasonal business → operating cash flow over three years was ₹363.39 lakh against ₹802.62 lakh of profit (our arithmetic, DRHP p.30).

Debt: borrowings were ₹1,939.13 lakh at March 2026, double the ₹966.47 lakh at March 2024, at rates up to 11.50% (our arithmetic, DRHP p.28, DRHP p.98) → finance costs were ₹188.61 lakh in FY26, against profit before tax of ₹549.76 lakh → ₹900.00 lakh of the proceeds is to repay part of it (DRHP p.29, DRHP p.92).

Compliance record: the prospectus records late filings with the Registrar of Companies including the declaration for commencement of business, filed more than four years late, and a suo-motu application for adjudication of penalties filed on 11 September 2026 (DRHP p.44, DRHP p.264) → past non-compliance with provident fund and state insurance requirements and with rules on registration of charges is also disclosed (DRHP p.41, DRHP p.42).

People: 103 of the workforce joined and 58 left in FY26, an attrition rate of 136.47%, on a headcount of 67 (DRHP p.42, DRHP p.159) → a semi-automated plant still needs trained operators → the prospectus lists labour disruption as a separate risk (DRHP p.39).

Issue-specific: no orders have been placed for the machinery the issue is to fund (DRHP p.47), the fund requirement has not been appraised by any bank or institution (DRHP p.91), and the issue size, price and the sum for general corporate purposes are left blank (DRHP p.92).

18Litigation and regulatory matters

There is no criminal litigation against the company, no action by statutory or regulatory authorities against it, and no litigation against the group company (DRHP p.261, DRHP p.264). The prospectus reports no material fraud, no wilful defaulter classification and no economic offence proceedings (DRHP p.265).

19Related-party transactions

Source: DRHP p.32, DRHP p.33; the sales and job work totals are our arithmetic on the rows in that annexure.

At March 2026 the company was owed ₹170.76 lakh by Balaji Plastic Industries, ₹159.40 lakh by Mundada Drip Irrigation System Private Limited and ₹0.38 lakh by Balaji Irrigation System, and owed ₹31.92 lakh and ₹34.99 lakh to two of them (DRHP p.33). What appeared in the two years before the filing: purchases from and job work by Mundada Drip Irrigation System Private Limited, both new in FY26, totalling ₹326.07 lakh (our arithmetic, DRHP p.33). What fell away: sales to Balaji Irrigation System went from ₹1,308.14 lakh in FY24 to ₹316.79 lakh in FY26 (DRHP p.33).

20What the offer document does not say

The dealers and suppliers are not named in the concentration tables, so the dealer that is 28.94% of revenue is not identified. Realisation and margin per kilogram by product are not disclosed, so the rise in gross margin from 14.99% to 21.69% cannot be split between mix and price. Installed capacity in kilograms is not printed alongside the utilisation percentages. Why inventories rose by ₹971.70 lakh in FY26 is not explained.

The basis on which goods are priced in the trade with Balaji Plastic Industries, Balaji Irrigation System and Mundada Drip Irrigation System Private Limited is not set out. The size of the micro irrigation products market is not stated. The number of shares offered, the price, the issue amount and the sum for general corporate purposes are all left blank in this draft.

21Five questions for management

1. On what basis are prices set in the trade with Balaji Plastic Industries, Balaji Irrigation System and Mundada Drip Irrigation System Private Limited, and how do they compare with unrelated counterparties?
2. What is the realisation and the gross margin per kilogram for films, pipes and accessories separately in each of FY24, FY25 and FY26?
3. Why did inventories rise by ₹971.70 lakh in FY26 to 89 days of cost of goods sold, and what is in that stock?
4. Why is shade net utilisation down to 47.05% from 84.85% in FY25, and what is the installed capacity in kilograms behind each utilisation percentage?
5. What throughput do the new drip tubing and dripper lines need to cover the ₹1,663.75 lakh of capital expenditure, and when are they expected to be commissioned?

1Sources and cited facts

This study was read from 1 document the company filed. The 91 figures it cites are listed under the document each came from, with the page and the sentence as printed.