R.D.Engineers (India) Limited IPO

01At a glance

What the company does: designs, fabricates and supplies custom heavy-engineered static process equipment to customer drawings, being pressure vessels, columns, cyclones, heat exchangers, plates, pipelines and fittings, from a single plant at Nashik, Maharashtra (DRHP p.32, DRHP p.164, DRHP p.43).

Who pays it: 16 customers in FY26, across machinery and equipment, metals, oil and gas, pharmaceuticals and recycling (DRHP p.156, DRHP p.164). The largest was 32.25% of FY26 revenue and the top ten 98.08% (DRHP p.29).

Why it is raising money: up to ₹2,089.05 lakh for civil construction, a plate-rolling machine and a crawler crane at the existing plant, and up to ₹850.00 lakh to repay borrowings (DRHP p.109).

How fast it has grown: revenue from ₹1,505.57 lakh in FY24 to ₹6,201.00 lakh in FY26, but by way of ₹1,059.89 lakh in FY25; profit from ₹164.42 lakh to ₹773.16 lakh, by way of ₹101.92 lakh (DRHP p.74).

The one thing to understand: the profit did not become cash. Net cash from operating activities was ₹1,454.65 lakh in FY24, ₹416.90 lakh in FY25 and ₹14.62 lakh in FY26, the year profit after tax reached ₹773.16 lakh (DRHP p.75, DRHP p.74).

02The business, in plain words

A refinery, a chemical plant, a steel mill or a pharmaceutical maker needs a vessel, a column or a heat exchanger built to its own drawings and codes. R.D. Engineers quotes on the specification, buys the carbon steel and stainless-steel plate, pipe, forgings and flanges, rolls and welds the shell, tests it, and ships it; where the contract says so, it supervises erection and commissioning at the customer's site (DRHP p.161, DRHP p.162, DRHP p.163).

A plant owner or an engineering contractor issues a specification → R.D. Engineers quotes, wins the order and buys plate and fittings → it rolls, welds, inspects and tests the equipment at Nashik → it is paid against milestones, from engineering through dispatch to site support.

The company was incorporated on May 6, 1992 (DRHP p.95). It had 36 permanent employees at July 31, 2026, and engages third-party service providers for worker-related services (DRHP p.155, DRHP p.49). The plant at Nashik occupies 5,359.98 square metres of a 10,005 square metre site, leaving 4,645.02 square metres open, of which 1,855.73 square metres is needed for the proposed machinery (DRHP p.111).

Earnings equation: Profit ≈ order value − plate, pipe and bought-out components − welding and fabrication labour − interest. In FY26 the cost of raw materials consumed was ₹4,529.70 lakh against revenue of ₹6,201.00 lakh, with employee cost ₹201.91 lakh, other expenses ₹513.19 lakh and finance cost ₹227.20 lakh (DRHP p.74).

03Where the money comes from

Source: DRHP p.29, DRHP p.156. No customer is named.

The concentration understates how much the customer base turns over. By state, Gujarat was ₹2,234.31 lakh of FY26 revenue (36.03%) and Rajasthan ₹734.54 lakh (11.85%), while Assam, which had been 49.17% of FY25 revenue, and Bihar, which had been 32.34%, produced nothing at all in FY26 (DRHP p.157). In FY24 Bihar had been 34.13% (DRHP p.157).

By product, pressure vessels, cyclones, columns, plates, pipelines and fittings together were 95.67% of FY26 revenue, 88.37% of FY25 and 97.82% of FY24 (DRHP p.32). By industry, machinery and equipment was ₹2,935.34 lakh of FY26 revenue (47.34%) against ₹15.15 lakh in FY25 (1.43%) (DRHP p.157).

Revenue does depend on a few buyers, almost entirely: ten customers were 98.08% of FY26 revenue and in FY25 ten customers were the whole of it (DRHP p.29). There are no long-term agreements; work comes as individual work orders, project-specific contracts, purchase orders or tender awards (DRHP p.30).

04The growth record

Source: DRHP p.73, DRHP p.74, DRHP p.75. EBITDA, its margin, the PAT margin and borrowings are our arithmetic on those statements, using the prospectus's own definition of EBITDA as profit before tax plus depreciation plus interest less other income, and adding the long-term and short-term borrowing lines (DRHP p.21).

Revenue compounded at 102.9% a year from FY24 to FY26 and profit at 116.8%, by our arithmetic (DRHP p.74). Those rates hide the shape: revenue fell 29.6% in FY25 before rising 485.06% in FY26, by our arithmetic and the company's own figure (DRHP p.74, DRHP p.266). In a business of custom one-off orders, a year is a small sample.

The company explains the FY25 dip itself: capital work in progress of ₹1,163.72 lakh in FY24 was capitalised into property, plant and equipment of ₹1,493.90 lakh in FY25, funded partly by borrowing, and it states that capital locked in fixed assets, reduced long-term funding and weaker operating cash generation contributed to project delays and slower execution (DRHP p.269).

05What the growth is made of

Revenue rose from ₹1,059.89 lakh in FY25 to ₹6,201.00 lakh in FY26, an increase of ₹5,141.11 lakh, which the company attributes to a higher level of order execution and completion during the year together with higher-value projects (DRHP p.266). What the document supports beyond that:

Different customers, in different states. Gujarat went from ₹74.32 lakh to ₹2,234.31 lakh and Rajasthan from ₹15.34 lakh to ₹734.54 lakh, while Assam went from ₹521.11 lakh to nil and Bihar from ₹342.78 lakh to nil (DRHP p.157). The number of customers served rose from 10 to 16 (DRHP p.156).

A different industry mix. Machinery and equipment went from ₹15.15 lakh to ₹2,935.34 lakh, 47.34% of FY26 revenue (DRHP p.157).

One large order. The largest customer alone was ₹2,000.00 lakh, 32.25% of FY26 revenue, against ₹521.11 lakh for the largest customer a year earlier (DRHP p.29).

The prospectus does not disclose tonnage fabricated, number of units delivered or average order value, so the increase cannot be separated into volume and price. That sentence is the finding. It states that the value of individual orders varies with scope, specification, complexity and customer requirements (DRHP p.266).

06Earnings quality

The line that needs explaining is the FY26 cash flow. Profit before tax of ₹1,017.10 lakh and depreciation and interest added back give ₹1,393.82 lakh before working capital; receivables absorbed ₹1,632.11 lakh and inventories ₹509.20 lakh, while payables released ₹1,660.90 lakh and other current liabilities absorbed ₹618.52 lakh, leaving ₹267.97 lakh generated before tax and ₹14.62 lakh after it (DRHP p.75). In other words, the year's profit is currently sitting in receivables and stock, and the payables that funded part of it stood at ₹2,279.77 lakh at the year end, by our arithmetic, against ₹618.87 lakh a year earlier (DRHP p.73).

A second point is the record itself. The prospectus discloses that certain documents relating to the 1992 incorporation and later allotments were not available at the Registrar of Companies, and that the book running lead manager relied on minutes, management representations, a physical inspection report and statutory registers instead (DRHP p.95). It also discloses delays in filings with the Registrar of Companies, discrepancies and non-compliances in financial reporting or records, and missing original purchase invoices for some older plant and machinery (DRHP p.37, DRHP p.40, DRHP p.46).

07The balance sheet

At March 31, 2026 borrowings were ₹2,341.92 lakh, of which ₹1,381.01 lakh were long term and ₹960.91 lakh short term, by our arithmetic, against ₹1,987.92 lakh a year earlier (DRHP p.73). Cash and cash equivalents were ₹365.31 lakh, of which ₹357.84 lakh sat in deposit accounts, so net debt was ₹1,976.61 lakh, by our arithmetic (DRHP p.73, DRHP p.76). Net worth was ₹1,529.72 lakh, so the debt to equity ratio was 1.53, by our arithmetic (DRHP p.73).

Inventories were ₹3,121.89 lakh and trade receivables ₹1,754.73 lakh, together ₹4,876.62 lakh, or 78.6% of FY26 revenue, by our arithmetic (DRHP p.73, DRHP p.74). Trade payables were ₹2,279.77 lakh, of which ₹123.43 lakh were due to micro and small enterprises, by our arithmetic (DRHP p.73). Property, plant and equipment was ₹1,333.81 lakh (DRHP p.73).

Contingent liabilities were ₹301.98 lakh at March 2026: ₹228.33 lakh of commercial proceedings before a city civil or commercial court, ₹39.17 lakh under sections 138 and 141 of the Negotiable Instruments Act, 1881, ₹17.11 lakh of income tax proceedings and ₹17.37 lakh of tax deducted at source proceedings (DRHP p.77). The company also owes ₹1,113.79 lakh of unsecured loans to related parties, of which ₹1,040.62 lakh is to Somraj Dua, described as a relative of the promoter and directors (DRHP p.78).

If the issue proceeds, up to ₹850.00 lakh of borrowings would be repaid, which on the March 2026 balance would leave about ₹1,491.92 lakh, by our arithmetic, before any new drawing (DRHP p.109, DRHP p.73). No monitoring agency has been appointed to watch the use of proceeds (DRHP p.62).

08What the money is for

Source: DRHP p.109, and our arithmetic on the ₹2,939.05 lakh of stated objects. General corporate purposes are blank ([●]) and cannot exceed 15% of the amount raised or ₹1,000 lakh, whichever is less (DRHP p.109). Both objects are scheduled for deployment in the year to March 2027 (DRHP p.109).

The machinery is meant to lift a stated limit on what the plant can make. The company says its capability is limited in rolling and forming thicker and larger plates and in handling heavy fabricated components, and proposes a fully hydraulic three-roll plate rolling machine with programmable controls and conical bending, able on the supplier's specification to take plates up to about 3,000 mm wide and roll up to about 125 mm thick, and a SANY SCC3500A-8 crawler crane for lifting and moving heavy assemblies (DRHP p.111). The site has 4,645.02 square metres open, of which 1,855.73 square metres is needed for the proposed machines (DRHP p.111).

Debt repayment would reduce a finance cost of ₹227.20 lakh in FY26, which was 22.3% of profit before tax, by our arithmetic (DRHP p.74).

Into the business the fresh issue of up to 43,00,000 equity shares, before offer expenses (DRHP p.93). To the selling shareholder the proceeds of up to 10,50,000 shares offered by Devan Somraj Dua; at draft stage that is a share count, not an amount (DRHP p.70).

The company will receive no proceeds from the offer for sale (DRHP p.61).

09Who is selling

Source: DRHP p.70, DRHP p.100, and our arithmetic on the percentage. The prospectus records that the offered shares have been held for at least one year before the filing and are eligible for an offer for sale (DRHP p.70). No other shareholder is selling.

10Promoters

Devan Somraj Dua is the sole promoter and is chairman and managing director (DRHP p.1, DRHP p.78). The holding is 88,03,949 shares, 80.04% of the capital before the offer (DRHP p.100). The prospectus records that the company's operations and client relationships are significantly dependent on the promoter (DRHP p.51).

Promoter economics. The company issued shares only four times in 34 years, all for cash at ₹100 a share: 30 shares on subscription to the memorandum in May 1992, 4,970 in March 1997, 20,000 in March 1998 and 75,000 in March 2009, of which Devan Somraj Dua took 4,730 (DRHP p.95, DRHP p.96). On June 1, 2026 each ₹100 share was sub-divided into ten ₹10 shares, taking the count from 1,00,000 to 10,00,000; on August 28, 2026 a bonus issue of 1,00,00,000 shares in the ratio 10:1 took it to 1,10,00,000, of which Devan Somraj Dua received 80,03,590 (DRHP p.94, DRHP p.95, DRHP p.96).

The prospectus carries a risk factor stating that the promoter, who is also the selling shareholder, has subscribed to and purchased equity shares, and another that the promoter and directors may have interests in the company beyond reimbursement of expenses (DRHP p.60, DRHP p.54). Certain borrowings are secured by immovable properties and supported by personal guarantees (DRHP p.53).

Remuneration to Devan Somraj Dua was ₹18.00 lakh in each of the three years (DRHP p.78). Unsecured loans of ₹202.27 lakh were taken from and ₹211.28 lakh repaid to the same person in FY26, leaving ₹51.63 lakh outstanding; a relative, Somraj Dua, lent ₹630.00 lakh during FY26, taking that balance from ₹410.62 lakh to ₹1,040.62 lakh (DRHP p.78).

The board is newly constituted for a listing: three independent directors were appointed in March and August 2026 and a company secretary in April 2026, and the prospectus records that none of the directors has prior experience serving in a listed company (DRHP p.78, DRHP p.56).

11Who already owns it

Source: DRHP p.100, DRHP p.93, and our arithmetic for the column after the offer on 1,53,00,000 shares, assuming the whole offer is taken up and the promoter sells 10,50,000 shares. The company has one class of shares, no convertible instruments and no securities premium account before the offer (DRHP p.94, DRHP p.93).

Two non-promoter holders of just under 10% each received bonus shares in August 2026, 9,98,000 apiece, which implies each held 99,800 shares before the bonus (DRHP p.96). There is no private equity, no venture capital and no institutional holding disclosed (DRHP p.100).

12What changed just before the IPO

• FY24: capital work in progress of ₹1,163.72 lakh, a factory modernisation, and operating cash flow of ₹1,454.65 lakh (DRHP p.73, DRHP p.75).
• FY25: the capital work was capitalised into property, plant and equipment of ₹1,493.90 lakh; revenue fell to ₹1,059.89 lakh and profit to ₹101.92 lakh, which the company links to capital locked in fixed assets and weaker cash generation causing project delays (DRHP p.73, DRHP p.74, DRHP p.269).
• FY26: revenue rose to ₹6,201.00 lakh and profit to ₹773.16 lakh, while operating cash flow fell to ₹14.62 lakh (DRHP p.74, DRHP p.75).
• FY26: trade receivables rose from ₹122.62 lakh to ₹1,754.73 lakh and trade payables from ₹618.87 lakh to ₹2,279.77 lakh, by our arithmetic (DRHP p.73).
• FY26: Somraj Dua lent the company ₹630.00 lakh, taking related-party loans outstanding from ₹491.50 lakh to ₹1,113.79 lakh (DRHP p.78).
• March 25, 2026 and August 6, 2026: three independent directors appointed (DRHP p.78).
• April 27, 2026: a company secretary and compliance officer appointed (DRHP p.78).
• June 1, 2026: each ₹100 share sub-divided into ten shares of ₹10 (DRHP p.94).
• August 3 and August 27, 2026: the board and the shareholders approved the offer (DRHP p.70).
• August 28, 2026: bonus issue of 1,00,00,000 shares, ten for one (DRHP p.95).
• September 1, 2026: the promoter authorised the offer for sale of up to 10,50,000 shares (DRHP p.70).

13Capacity and expansion

The prospectus states no installed capacity, and says why: the manufacturing is customised and project-specific, so no fixed installed capacity is determinable (DRHP p.52).

Source: DRHP p.111, DRHP p.43. The areas are certified by a chartered engineer, Ankit Gupta, by a certificate dated August 24, 2026 (DRHP p.111).

What the issue adds is the ability to make bigger equipment rather than more of the same: a plate-rolling machine for plates up to about 3,000 mm wide and about 125 mm thick, with pre-bending up to about 76 mm, and a crawler crane to move heavy assemblies, together with industrial sheds (DRHP p.111). The prospectus does not state what tonnage or order value the new equipment would let the company take on, and it records that a portion of the net proceeds is for capital expenditure on which the company has given estimates rather than firm orders (DRHP p.56).

The single site is itself a stated risk: the sole manufacturing facility is in Maharashtra, so operations are highly dependent on that one location (DRHP p.43).

14Market size and industry structure

As claimed: the prospectus states that the industry information it contains has been derived from an industry report, and carries a risk factor that certain data in the document has not been independently verified (DRHP p.62).

Its industry chapter describes the capital goods sector as expected to grow on the back of order-book execution, with project-based companies likely to record execution growth of about 15% in FY26, and notes the Defence Acquisition Council approving acquisition proposals worth ₹79,000 crore in October 2025 (DRHP p.147).

This study does not repeat a market size for process equipment, because the document does not give one that can be attributed to a named report and date.

The part that is addressable: custom static process equipment for plants in engineering and machinery, metals, oil and gas, pharmaceuticals and recycling, bought against the customer's own drawings and codes (DRHP p.164).

What the company is today: revenue of ₹6,201.00 lakh from one plant at Nashik, serving 16 customers (DRHP p.74, DRHP p.156).

Structure, as far as the document supports it: orders come individually, through work orders, project-specific contracts, purchase orders or tender awards, with no committed volumes (DRHP p.30). Customers may reduce, defer, reschedule or cancel capital expenditure programmes, appoint competing suppliers for part of a project, change approved makes and specifications, or bring the work in house (DRHP p.30). Raw materials, chiefly carbon steel and stainless-steel plate, pipe, forgings and flanges, are bought from approved suppliers without long-term contracts (DRHP p.162, DRHP p.33). Bank guarantees and other security must be furnished on certain contracts (DRHP p.50).

15Competitive position

The prospectus does not print a comparison of accounting ratios against named listed peers in the pages read, so this study sets none out; going outside the offer document for one is not what this format does.

What the document offers as the basis on which the company competes: a record since 1992; in-house engineering that prepares design calculations, general arrangement and fabrication drawings, welding procedures and inspection and test plans; material traceability from incoming inspection through manufacture; and the ability to supply single items or multi-equipment project packages across several industries (DRHP p.162, DRHP p.164). Sixteen customers were served in FY26 (DRHP p.156).

What it does not show: repeat-order rates, tender win rates, any measure of market share, or a customer list. The pattern in the state-wise table, where the states producing half of one year's revenue produce nothing the next, suggests the work is won order by order rather than through standing relationships, and the prospectus says exactly that about its contracting arrangements (DRHP p.157, DRHP p.30). Trademark applications are pending and not yet registered (DRHP p.44).

16Peers the company named

Peers named in the offer document: none appear in the pages of the basis for the offer price read for this study (DRHP p.123).

Because no peer set is set out at this stage, there is no peer price to earnings ratio, no peer return on net worth and no peer net asset value to set against the company's own. The company's own FY26 figures are earnings per share of ₹7.03 after the bonus issue and the share split, and ₹77.32 before them (DRHP p.74).

A reader should treat the FY26 earnings per share with the same caution as the revenue: it rests on one year in which a single customer was 32.25% of revenue, after a year in which profit was ₹101.92 lakh (DRHP p.29, DRHP p.74). The absence of a peer comparison is stated here rather than filled in from outside the document.

17Risks, in plain words

Lumpy revenue: revenue was ₹1,505.57 lakh in FY24, ₹1,059.89 lakh in FY25 and ₹6,201.00 lakh in FY26 (DRHP p.74) → a year tells a reader very little about the next one → the states that produced 81.51% of FY25 revenue, Assam and Bihar, produced nothing in FY26 (DRHP p.157).

Customers: ten customers were 98.08% of FY26 revenue and the largest 32.25% (DRHP p.29) → one deferred capital programme removes a large part of a year → there are no long-term agreements, and customers may cancel, reschedule or bring work in house (DRHP p.30).

Cash: net cash from operating activities fell from ₹1,454.65 lakh in FY24 to ₹416.90 lakh in FY25 and ₹14.62 lakh in FY26 (DRHP p.75) → profit is held in receivables and stock rather than banked → inventories and receivables were ₹4,876.62 lakh at March 2026, 78.6% of the year's revenue, by our arithmetic (DRHP p.73, DRHP p.74).

Debt and related-party funding: borrowings were ₹2,341.92 lakh and unsecured loans owed to related parties ₹1,113.79 lakh at March 2026, by our arithmetic (DRHP p.73, DRHP p.78) → the business runs on borrowed money, part of it from the promoter's family → certain borrowings may be recalled by lenders at any time, carry variable rates, and are secured by immovable property and personal guarantees (DRHP p.57, DRHP p.45, DRHP p.53).

One site: the sole manufacturing facility is at Nashik, Maharashtra (DRHP p.43) → a stoppage there stops everything → the premises from which the company operates, including the registered office, are not owned (DRHP p.42).

Records: documents relating to the 1992 incorporation and certain later allotments were not available at the Registrar of Companies, and the lead manager relied on minutes, management representations and registers (DRHP p.95) → a reader cannot verify the early capital history from the public record → the prospectus also discloses delayed filings, discrepancies and non-compliances in financial reporting or records, and missing original purchase invoices for some older plant (DRHP p.37, DRHP p.40, DRHP p.46).

Estimating and executing: profit depends on estimating cost, technical requirement and timeline correctly at quotation (DRHP p.47) → an error is absorbed by the fabricator → bank guarantees must be furnished on certain contracts, and delays or defects in design, manufacture, testing or delivery carry liability (DRHP p.50, DRHP p.49).

Litigation: contingent liabilities were ₹301.98 lakh at March 2026, including ₹228.33 lakh of commercial proceedings and ₹39.17 lakh under the Negotiable Instruments Act (DRHP p.77) → an adverse outcome is a cash cost → that is 38.6% of FY26 profit after tax, by our arithmetic (DRHP p.74).

Issue-specific: no monitoring agency has been appointed for the use of proceeds, and the deployment is based on management estimates (DRHP p.62, DRHP p.56).

18Litigation and regulatory matters

Source: DRHP p.77. These are the claims against the company not acknowledged as debt, as the prospectus classifies them.

The prospectus states that there are outstanding litigations involving the company, its directors, its promoter, its key managerial personnel, senior management and group companies, and that it has significant contingent liabilities relating primarily to tax matters (DRHP p.35, DRHP p.58). The commercial claim of ₹228.33 lakh has stood unchanged across all three years shown (DRHP p.77).

19Related-party transactions

Source: DRHP p.78, and our arithmetic in adding the individual lines. The related parties are the promoter Devan Somraj Dua, the chief financial officer and whole-time director Gadakh Sukdeo Shivram, three independent directors, the company secretary, two relatives named Somraj Dua and Veena Dua, and a promoter group entity, Seair Global Private Limited (DRHP p.78).

What changed: Somraj Dua lent ₹630.00 lakh during FY26 and none of it was repaid in the year, taking that balance from ₹410.62 lakh to ₹1,040.62 lakh, which is two thirds of the company's net worth, by our arithmetic (DRHP p.78, DRHP p.73). A new arrangement also appears in FY26: the chief financial officer made payments of ₹210.13 lakh on the company's behalf and was reimbursed the same amount (DRHP p.78). Purchases from Seair Global Private Limited stopped after FY25 (DRHP p.78).

20What the offer document does not say

• No customer is named in the concentration tables (DRHP p.29).
• Tonnage fabricated, units delivered and average order value are not disclosed, so growth cannot be split into volume and price (DRHP p.266).
• Installed capacity is not stated, because the company says it is not determinable for customised work (DRHP p.52).
• The order book at any date is not quantified in the pages read (DRHP p.30).
• What the new plate-rolling machine and crane would add in tonnage or order value is not stated (DRHP p.111).
• Repeat-order rates, tender win rates and any measure of market share are not disclosed (DRHP p.156).
• No comparison with named listed peers is set out at this stage (DRHP p.123).
• The early capital history cannot be verified from the Registrar of Companies record, and the lead manager relied on the company's own documents (DRHP p.95).
• The price band, the bid lot and the rupee size of the offer are blank at this stage (DRHP p.93).

21Five questions for management

1. What was the order book at August 31, 2026, split by customer, industry and expected delivery date (DRHP p.30)?
2. Why did net cash from operating activities fall to ₹14.62 lakh in the year profit after tax reached ₹773.16 lakh, and how much of the March 2026 receivable balance has since been collected (DRHP p.75, DRHP p.73)?
3. How many of the 16 customers served in FY26 had also bought in FY25 or FY24, and what share of FY26 revenue came from repeat customers (DRHP p.156)?
4. On what terms is the ₹1,040.62 lakh owed to Somraj Dua, and when is it repayable (DRHP p.78)?
5. What additional order value could the proposed plate-rolling machine and crawler crane let the company bid for, and what would utilisation of them need to be to cover their depreciation (DRHP p.111)?

1Sources and cited facts

This study was read from 1 document the company filed. The 124 figures it cites are listed under the document each came from, with the page and the sentence as printed.