Sollfege Smart Electronics Limited IPO

01At a glance

Sollfege Smart Electronics IPO date, price band and lot size

What the company does: purchases premium audio, video, smart home, lighting control, security and lifestyle products from brand owners and national distributors, offers them through showrooms and on projects, and designs and installs the systems; it manufactures nothing (RHP p.131, RHP p.133).

Who pays it: homeowners, architects, interior designers, builders and corporate and institutional buyers; business customers were 55.29% of FY26 revenue and individual buyers 44.71% (RHP p.140). The largest customer was 24.94% of FY26 revenue and the top ten 67.32%, none of them named (RHP p.138).

Why it is raising money: ₹854.28 lakh to fit out and lease twelve new showrooms, ₹967.47 lakh of working capital, mostly display and saleable stock for those showrooms, and ₹180.00 lakh of general corporate purposes (RHP p.91).

How fast it has grown: revenue rose from ₹1,853.02 lakh in FY24 to ₹2,220.93 lakh in FY26, about 9.5% a year, and profit after tax from ₹175.93 lakh to ₹219.13 lakh, about 11.6% a year (our arithmetic, RHP p.61).

The one thing to understand: the profit has not turned into cash. Three years of profit add up to ₹607.71 lakh, while operating cash flow over the same years adds up to an outflow of ₹17.91 lakh, because trade receivables rose from ₹139.39 lakh to ₹948.19 lakh and inventory from ₹696.86 lakh to ₹1,349.70 lakh (our arithmetic, RHP p.60, RHP p.61, RHP p.62). Debtor days went from 27 to 156 and inventory days from 186 to 332 (RHP p.101).

02The business, in plain words

What Sollfege Smart Electronics does

The company was set up in 2012 as Denn Audio Private Limited to distribute high-end audio and video equipment, and now describes itself as a distributor and integrator of premium audio, video, home automation, smart living, lifestyle and wellness products for homes, offices and institutions (RHP p.131). It opened its first Kolkata store in 2013, a Gurgaon showroom in 2019 and a Bhubaneswar showroom in 2024 (RHP p.174). It currently operates three showrooms, in Kolkata, Gurgaon and Bhubaneswar, with experience centres in Kolkata and Gurgaon where customers can try systems set up as a living room would be (RHP p.132).

A homeowner or an architect wants a home theatre, whole-house music or automated lighting → the company's sales and technical staff design a system from brands such as Bose, Yamaha, Panasonic, Lutron, Sonos, Devialet, Focal, Epson and LG → the company purchases the products from the brand owners, national distributors or local dealers, delivers and installs them → the customer pays for the products, and, in a small but growing share, for the installation service (RHP p.133, RHP p.138).

The Prospectus is plain that this is a trading business: it has no plant or machinery, does no research and development, and capacity and utilisation do not apply to it (RHP p.133, RHP p.143, RHP p.156). Trading was 98.20% of FY26 revenue and services 1.80% (RHP p.138). It had 32 employees including directors as of August 2026, of whom nine are in sales and marketing and seven each in technical operations and service (RHP p.137).

Earnings equation: Revenue = products sold × selling price + installation charges, and Profit ≈ revenue − purchase cost of the goods sold − showroom rent, staff and marketing − interest on the stock and receivables. In FY26 purchases of ₹1,914.63 lakh less a stock build-up of ₹429.60 lakh gave a cost of goods sold of ₹1,485.03 lakh, 66.9% of revenue (our arithmetic, RHP p.61).

03Where the money comes from

Sollfege Smart Electronics customers: how concentrated the revenue is

Source: RHP p.139, RHP p.140. By state, West Bengal was 58.42% of FY26 revenue, Odisha 16.07%, Delhi 10.13% and Maharashtra 8.52% (RHP p.139). Bihar was 43.84% of FY24 revenue, ₹812.44 lakh, and 0.58% of FY26 revenue (RHP p.139). Online sales were 0.51% of FY26 revenue (RHP p.140). The top five brands were 41.27% of FY26 trading revenue, none named (RHP p.20).

Source: RHP p.138. Revenue depends on a few customers: ten accounts took two thirds of FY26 revenue, and the largest customer was worth ₹553.95 lakh in FY26 and ₹808.52 lakh in FY24 (RHP p.138). One related company is a customer: sales to AMBO Agritec Ltd., a listed company of which Umesh Kumar Agarwal is a director, were ₹104.67 lakh in FY24, ₹431.57 lakh in FY25 and ₹288.97 lakh in FY26, which is 5.6%, 20.5% and 13.0% of revenue (our arithmetic, RHP p.65, RHP p.178). Purchases are concentrated too: the largest supplier was 59.01% of FY26 purchases, the top five 80.51% and the top ten 88.10% (RHP p.155).

04The growth record

Sollfege Smart Electronics financials: revenue, profit and margins

Source: RHP p.61, RHP p.62, RHP p.110. Total borrowings were ₹286.54 lakh, ₹445.70 lakh and ₹698.15 lakh, a debt to equity ratio of 0.76, 0.47 and 0.60 (RHP p.110). Return on net worth was 46.90%, 22.56% and 18.86%, and return on capital employed 54.65%, 27.79% and 23.57% (RHP p.110). The company computes its PAT margin on total income, 8.87%, 9.99% and 9.86% (RHP p.110); on revenue it is 9.5%, 10.1% and 9.9% (our arithmetic, RHP p.61).

Our arithmetic over FY24 to FY26 (RHP p.61, RHP p.110): revenue about 9.5% a year higher, EBITDA about 52.0% a year higher and profit after tax about 11.6% a year higher; the EBITDA margin rose 867 basis points. EBITDA as the company defines it excludes other income, which is why FY24 EBITDA of ₹173.25 lakh is below FY24 profit before tax of ₹252.74 lakh: other income was ₹130.60 lakh in FY24, ₹26.84 lakh in FY25 and ₹1.52 lakh in FY26 (RHP p.61, RHP p.110). Earnings a share are stated after the July 2025 bonus issue, ₹4.35, ₹3.52 and ₹3.63 (RHP p.108).

05What the growth is made of

The two halves of the period look different. FY25 revenue rose ₹248.26 lakh, 13.40%, which the Prospectus puts down to higher sales of audio solutions and a broader customer base across states; audio rose from ₹622.91 lakh to ₹933.87 lakh (RHP p.139, RHP p.248). FY26 revenue rose ₹119.64 lakh, 5.69%, of which trading contributed ₹84.33 lakh and installation services ₹35.31 lakh; by product, video rose ₹50.90 lakh, smart living ₹20.74 lakh and audio ₹12.68 lakh (RHP p.246).

The profit line moved differently from revenue. Cost of goods sold, purchases plus the change in stock, fell from 73.8% of revenue in FY24 to 70.3% in FY25 and 66.9% in FY26, so the gross margin rose from 26.2% to 33.1% (our arithmetic, RHP p.61). That is where the EBITDA margin came from. Profit after tax grew far less, because FY24 profit carried ₹130.60 lakh of other income, of which ₹50.51 lakh was sundry creditors written back and ₹61.66 lakh customer advances forfeited, while FY26 carried ₹1.52 lakh (RHP p.218). Finance costs also rose from ₹34.80 lakh to ₹75.31 lakh (RHP p.61).

The Prospectus does not disclose units sold, average selling prices, or gross margin by brand or product, so the increase cannot be separated into volume, price and mix, and the Prospectus does not explain the rise in gross margin. That is the finding.

06Earnings quality

The item that needs explaining is working capital. In FY25 receivables rose ₹651.94 lakh and payables ₹561.36 lakh; in FY26 inventory rose ₹429.60 lakh and receivables another ₹156.86 lakh, and operating cash flow was negative by ₹65.66 lakh (RHP p.62). The Prospectus attributes the receivables to growth, a wider customer base and project-based sales that need credit, and the stock to demonstration products and a wider range of premium brands (RHP p.102). A second item is the FY24 profit: ₹112.17 lakh of it came from writing back creditors and forfeiting customer advances, while ₹32.37 lakh of sundry balances were written off in expenses (our arithmetic, RHP p.218, RHP p.220).

07The balance sheet

At March 31, 2026 total assets were ₹3,037.47 lakh: inventories ₹1,349.70 lakh, trade receivables ₹948.19 lakh, property plant and equipment ₹552.80 lakh, long-term loans and advances ₹143.04 lakh, short-term loans and advances ₹23.52 lakh and cash of ₹11.76 lakh (RHP p.60). Against that, trade payables were ₹875.24 lakh, of which ₹757.22 lakh is owed to a single creditor, other current liabilities ₹148.97 lakh and borrowings ₹698.15 lakh, leaving net worth of ₹1,161.85 lakh (RHP p.60, RHP p.257).

Borrowings were ₹351.63 lakh secured and ₹346.52 lakh unsecured (RHP p.234). The secured debt is a Bank of Baroda cash credit line of ₹300.00 lakh with ₹223.57 lakh drawn, HDFC Bank loans against premises and a car loan; the cash credit carries personal guarantees of Umesh Kumar Agarwal, Mihir Kumar Dutta and Raghav Nahar (RHP p.234, RHP p.235).

The unsecured debt is mostly business loans from banks and finance companies at 15.50% to 19.50% a year, plus interest-free loans on demand of ₹20.91 lakh from AMBO Credit Pvt. Ltd. and ₹13.00 lakh from Umesh Kumar Agarwal (RHP p.236). A further ₹50.00 lakh business loan was sanctioned by Axis Finance Limited on August 17, 2026 (RHP p.239). There are no contingent liabilities, guarantees or commitments (RHP p.63).

After the issue: the Prospectus puts shareholders' funds at ₹3,339.85 lakh with the whole ₹2,178.00 lakh added, and total debt to shareholders' funds at 0.21 against 0.60 before, with debt unchanged at ₹698.15 lakh because no part of the issue repays borrowings (RHP p.91, RHP p.233).

08What the money is for

Sollfege Smart Electronics IPO objects: what the money is for

Source: RHP p.91, RHP p.104. All of it is scheduled for FY2026-27 (RHP p.105).

The showrooms are ten in West Bengal, one in Assam and one in Haryana, of 500 to 2,500 square feet each, to be leased on letters of intent already obtained; interiors are estimated at ₹750.51 lakh from quotations dated July 9, 2026 and rent deposits at ₹103.77 lakh, and no order has been placed (RHP p.92, RHP p.93, RHP p.95, RHP p.96).

The ten West Bengal sites are of about 500 to 600 square feet, with interiors of ₹36.74 lakh to ₹43.99 lakh each, while the Guwahati and Gurugram sites are costed at ₹147.40 lakh and ₹184.58 lakh (RHP p.93, RHP p.96). The launch is scheduled for December 2026 to February 2027 (RHP p.97).

The working capital object is stock for the new showrooms, ₹292.85 lakh of display stock and ₹674.61 lakh of saleable stock, priced from supplier quotations; the company estimates its working capital gap rising to ₹2,186.31 lakh at March 2027 (RHP p.100, RHP p.101). None of the objects has been appraised by a bank or financial institution, and CARE Ratings Limited is the monitoring agency (RHP p.106).

Into the business the whole issue: up to 39,60,000 new shares at ₹55, ₹2,178.00 lakh, of which ₹2,001.75 lakh is net proceeds (RHP p.91). To selling shareholders nothing: there is no offer for sale (RHP p.1).

09Who is selling

Sollfege Smart Electronics IPO offer for sale: who is selling

No one. The issue is a fresh issue of up to 39,60,000 shares at ₹55, of which 2,00,000 shares worth ₹110.00 lakh are reserved for the market maker, MNM Stock Broking Private Limited, leaving a net issue of 37,60,000 shares worth ₹2,068.00 lakh (RHP p.2, RHP p.59). Half the net issue, 18,80,000 shares, is for individual investors applying for the minimum of two lots, and half for other investors (RHP p.59).

The lot is 2,000 shares and the minimum application two lots, so 4,000 shares or ₹2,20,000 (our arithmetic, RHP p.2, RHP p.279). The issue is underwritten 15% by the lead manager, Finshore Management Services Limited, and 85% by MNM Stock Broking Private Limited (RHP p.72, RHP p.73). Bidding runs from September 30 to October 5, 2026 (RHP p.2).

10Promoters

The sole promoter is Umesh Kumar Agarwal, aged 44, Managing Director, a first director since incorporation in November 2012 and Managing Director from August 13, 2024 for three years, with a master of science degree from the University of Glamorgan (RHP p.178, RHP p.193).

Umesh Kumar Agarwal is also a director of Ambo Agritec Limited, The Desi Svaad Private Limited, Ambo Retail India Limited, Ambo Steel and Power Limited and Indraprastha Towers Private Limited, and the Prospectus states that the position at Ambo Agritec Limited is also Managing Director (RHP p.178, RHP p.49). Ambo Agritec Limited, a listed maker of biscuits, edible oils and snacks, is the company's only group company; its promoters hold 48.78% of it (RHP p.262).

The Prospectus lists the promoter group as Om Prakash Agarwal (father), Sushila Agarwal (mother), Geetanjali Saberwal Agarwal (spouse), Saroj Agarwal and Manoj Agarwal (brothers), and others (RHP p.196). The Managing Director was paid nothing in FY26 under a ceiling of ₹9.00 lakh a year, and the related-party statement shows no remuneration to Umesh Kumar Agarwal in any of the three years (RHP p.64, RHP p.182). Payments to the promoter group are listed in section 24.

Promoter economics: the stated average cost of acquisition is ₹5.89 a share against the issue price of ₹55 (RHP p.28).

The holding began with 5,000 shares at ₹10 in 2012, grew through a 100 for 1 bonus issue in March 2019 and gifts of shares from Manoj Agarwal and Nandini Agarwal in 2017 and 2023, then 5,00,000 shares at ₹71 in January 2025 on conversion of a ₹355.00 lakh loan, and 45,25,500 bonus shares in the 3 for 1 issue of July 2025 (RHP p.64, RHP p.83, RHP p.84).

The Prospectus computes the weighted average cost of the last primary transaction, that ₹71 conversion, at ₹17.75 after the bonus, and the issue price at 3.10 times it (RHP p.112). None of the promoter's shares is pledged (RHP p.83).

On regulatory matters: BSE directed the depositories to freeze the demat account and shareholding of Umesh Kumar Agarwal because Ambo Agritec Limited missed several filings under the SEBI listing regulations for 2023, and unfroze them on December 4, 2024 after the filings were made and penalties paid (RHP p.22, RHP p.23). There are no criminal, regulatory, material civil or tax proceedings against the promoter (RHP p.252, RHP p.254). Umesh Kumar Agarwal left Health Bloom Diagnostics Private Limited on August 21, 2024 and Umesh Agarwal HUF on April 2, 2025 (RHP p.195).

11Who already owns it

Sollfege Smart Electronics promoter holding before and after the IPO

Source: RHP p.81, RHP p.84. The five public holders are Jayanta Kumar Das, the chief financial officer, Vikash Mohta, a non-executive director, and Sourish Mukherjee, Vidisha Chakraborty and Vrinda Daga, who each bought 100 shares from the promoter at ₹10 in May 2023 before the bonus (RHP p.79, RHP p.83, RHP p.84). There is no private equity, venture capital, institutional or employee stock option holding (RHP p.80, RHP p.81).

On full allotment the count rises to 1,00,00,000 shares and the promoter would hold 60.34%, with the promoter and promoter group together at 60.38% (RHP p.59, RHP p.83, RHP p.84). The securities premium account is nil before the issue and ₹1,782.00 lakh after it (RHP p.77).

12What changed just before the IPO

• The promoter's loan became equity. Umesh Kumar Agarwal advanced ₹395.00 lakh in FY25, and ₹355.00 lakh of it was converted into 5,00,000 shares at ₹71 on January 8, 2025 (RHP p.64, RHP p.78).
• A 3 for 1 bonus issue on July 29, 2025 created 45,30,000 shares out of reserves and took the count from 15,10,000 to 60,40,000 (RHP p.78).
• The company became a public company on November 20, 2024 and took its present name on November 24, 2025 (RHP p.173).
• The statutory auditor changed. J.B.S. & Co. resigned on May 15, 2024 citing preoccupation with other assignments, and Dokania S. Kumar & Co. was appointed on June 12, 2024 (RHP p.73).
• Residential property was bought from related parties. In FY25 the company bought property worth ₹156.00 lakh from Rajib Nahar and ₹166.50 lakh from Estates B S Nahar, both listed as related parties, ₹322.50 lakh in all; the properties are two flats of 1,680 and 1,565 square feet in the Monalisa Building, 17 Camac Street, Kolkata, held for residential purposes (our arithmetic, RHP p.64, RHP p.157). The promoter's address in the Prospectus is in the same building (RHP p.193). Purchases of fixed assets were ₹477.90 lakh in FY25 (RHP p.62).
• Receivables and inventory rose sharply: debtor days from 27 to 156 and inventory days from 186 to 332 between FY24 and FY26 (RHP p.101).
• Business customers overtook individual buyers, from 20.94% of revenue in FY24 to 55.29% in FY26 (RHP p.140).
• A board and management layer was added. A non-executive director and two independent directors joined in August and September 2025, a chief financial officer and company secretary from September 1, 2025, and a general manager for sales and marketing on November 13, 2025 (RHP p.178, RHP p.191, RHP p.192).
• Old filings were brought up to date. Annual accounts and returns for FY2018-19 were filed on August 30, 2026, 2,486 days late, and nine half-yearly MSME returns were filed in March 2026 (RHP p.22). A compounding application for the late FY2018-19 annual general meeting was filed on March 19, 2026 (RHP p.28).
• No pre-IPO placement and no share split: there has been no issue of shares, other than bonus shares, in the 18 months before the Prospectus, and the face value has been ₹10 since incorporation (RHP p.78, RHP p.111).

13Capacity and expansion

Capacity and utilisation do not apply, since the company does not manufacture (RHP p.143). It stores stock in a single godown in Kolkata, an 850 square foot flat provided rent-free by Ambo Exports Private Limited (RHP p.46, RHP p.158). The issue takes the network from three showrooms to fifteen, on the company's own count (RHP p.101).

Two of the twelve proposed sites carry the same addresses as premises the company already rents: A26/5, Golf Course Road, DLF Phase I, Gurugram, and House No. 270, Gitanagar, Guwahati (RHP p.93, RHP p.158). The Prospectus does not say whether those two replace, enlarge or add to the existing premises.

It gives no sales per showroom target or payback for the new sites; showroom revenue in FY26 was ₹2,014.82 lakh for Kolkata, ₹120.98 lakh for Bhubaneswar and ₹85.13 lakh for Gurgaon (RHP p.140).

14Market size and industry structure

Sollfege Smart Electronics industry: market size and growth

As claimed: the industry chapter is taken from IBEF and other public sources, not from a commissioned report, and has not been independently verified (RHP p.117). Pages 117 to 125 cover the world and Indian economies; only the consumer durables part, pages 125 to 130, bears on this business. It states that India's consumer durables market is expected to reach ₹3 lakh crore by FY29, that the smart home market was ₹8,000 crore in 2023 and is projected at ₹36,000 crore by 2028 according to Redseer Strategy Consultants, and that the headphones market was about ₹22,433 crore in 2025 (RHP p.127, RHP p.129).

The part that is addressable: premium audio, video and home automation sold through showrooms and projects, mostly in West Bengal, Odisha, Delhi and Maharashtra (RHP p.139). The Prospectus does not size the premium segment, those regions, or design and installation work.

What the company is today: ₹2,220.93 lakh of FY26 revenue from three showrooms, 90.72% of it booked through Kolkata (RHP p.140). Set against the 2023 smart home figure, that is about 0.3%, though the years differ and the company also offers audio and video (our arithmetic, RHP p.127, RHP p.140).

Size over time: the chapter gives few past years. It cites a report by EY Parthenon and CII for growth of 11% a year, reaching ₹3 lakh crore by 2029 (RHP p.128). The smart home projection is a 4.5-fold rise over five years, and the chapter states no annual rate for it (our arithmetic, RHP p.127). Redseer Strategy Consultants expects the wider home category, smart and non-smart, to grow from ₹90,000 crore in 2023 to ₹1,40,000 crore by 2028, and the chapter expects headphones to grow 2.45% a year over 2025 to 2030 (RHP p.127, RHP p.129).

Segments: the chapter divides consumer durables into consumer electricals, such as fans and lighting, and white goods, such as washing machines, televisions, refrigerators and air conditioners (RHP p.125). It has no premium tier. The company reports its own lines instead: in FY26 audio was 42.62% of revenue, smart living 41.80%, video 13.78% and service charges 1.80% (RHP p.139).

What drives demand: the chapter names rising disposable incomes, affluence, premiumization and demand for smart appliances (RHP p.127); awareness of smart technologies and urbanisation (RHP p.126); the September 2025 cut in GST on televisions above 32 inches from 28% to 18% (RHP p.127); and electrification taking demand into tier 3 and 4 towns (RHP p.130).

Structure: the chapter says an estimated 30% of the consumer durables industry is still unorganised and that the market is shifting to organised players (RHP p.125). The companies it names, such as Daikin, Voltas, Dixon and Haier, are manufacturers; it names no distributor or integrator and does not discuss barriers to entry (RHP p.126, RHP p.129). The business chapter describes a competitive field of organised and unorganised players: global brands selling directly, national distributors, electronics chains, boutique AV dealers, automation specialists and online retailers, with most brands sold through a limited number of authorised dealers and prices easy to compare (RHP p.155).

Inputs and trade: the chapter does not discuss the prices or origin of the products the company trades in; it notes a shift to local manufacturing of consumer durables to reduce dependence on imports (RHP p.130). Elsewhere the Prospectus says the company purchases from global suppliers and domestic vendors at prices exposed to exchange rates and duties, mostly without long-term or fixed-price arrangements (RHP p.25). Its FY26 purchase table lists only Indian locations, led by Haryana at 40.84% (RHP p.155).

Rules: the chapter does not list the licences the business needs. It mentions 100% FDI in single brand retail, a plan to raise the FDI limit in multi-brand retail to 51%, and a request from the Ministry of Consumer Affairs that large consumer durables companies share data on service centres and repair policy (RHP p.130).

What the chapter says can go wrong: on its own sector, that the festive rebound of September and October 2025 depends for its continuation on broader economic conditions (RHP p.126). The rest is general: the IMF outlook it reproduces calls global risks tilted to the downside, from trade tensions, a correction in AI-linked investment and geopolitical tensions (RHP p.117, RHP p.121). Elsewhere the Prospectus says the company holds buffer stock against supplier lead times, import dependencies and seasonal swings in demand (RHP p.103).

15Competitive position

Sollfege Smart Electronics competitors

The Prospectus names no competitor and gives no figures for any other company, so no comparison table can be built from it (RHP p.109, RHP p.155). The company's own figures for FY26 are revenue of ₹2,220.93 lakh, an EBITDA margin of 18.02%, return on capital employed of 23.57% and borrowings of ₹698.15 lakh (RHP p.110).

Why a customer chooses this company rather than another, on the Prospectus's own account: authorised dealership of premium brands, trained technical teams, design and installation as one contract, early involvement with architects and builders, a quotation platform and after-sales service (RHP p.141, RHP p.142). Against that, it has no long-term customer contracts, a business the Prospectus itself describes as having low repeat purchases, no customer financing tie-ups, and one supplier providing 59.01% of FY26 purchases (RHP p.45, RHP p.46, RHP p.155).

16Peers the company named

Sollfege Smart Electronics listed peers

Peers named in the offer document: none. The Prospectus states that no listed company in India offers products or services across its business segments, so a strict comparison is not possible (RHP p.109).

There is therefore no peer set chosen by the issuer to examine.

17Valuation at the issue price

Sollfege Smart Electronics IPO valuation and P/E

At the fixed issue price of ₹55, with all 39,60,000 new shares added to the 60,40,000 in issue (our arithmetic, RHP p.59):

Source: RHP p.59, RHP p.61, RHP p.109. On the net asset value of ₹33.40 a share that the Prospectus states for the position after the issue, the price is 1.6 times book (our arithmetic, RHP p.109). Enterprise value, taking March 2026 borrowings of ₹698.15 lakh and cash of ₹11.76 lakh, is ₹6,186.39 lakh, 15.5 times FY26 EBITDA of ₹400.24 lakh (our arithmetic, RHP p.60, RHP p.110). On the weighted average EPS of ₹3.71 the price is 14.82 times, and it is 5.5 times the face value of ₹10 (RHP p.108, RHP p.109).

The Prospectus names no listed peers, so there is no peer range to place the issue in (RHP p.109). At ₹55 the issue is priced at 25.1 times FY26 profit on the enlarged share count and 15.2 times FY26 EPS as the Prospectus computes it on the shares before the issue.

18Risks, in plain words

Sollfege Smart Electronics IPO risks

Cash tied up in stock and receivables: receivables were ₹948.19 lakh and inventory ₹1,349.70 lakh at March 2026, against FY26 revenue of ₹2,220.93 lakh (RHP p.60, RHP p.61) → a trading business that holds stock for most of a year and waits five months to be paid has to fund both → operating cash flow was negative in FY24 and FY26, and ₹225.50 lakh of receivables were more than six months old (RHP p.62, RHP p.217).

One city: the Kolkata showroom booked 90.72% of FY26 revenue (RHP p.140) → a slowdown in one local market reaches almost all of the business → the expansion adds ten more West Bengal sites out of twelve (RHP p.92).

Customers and suppliers: the top ten customers were 67.32% of FY26 revenue and the largest supplier 59.01% of purchases, and there are no long-term customer contracts (RHP p.45, RHP p.138, RHP p.155) → losing a large account or a supply line moves revenue quickly → the largest customer's share has swung from 43.63% to 17.38% to 24.94% in three years (RHP p.138).

Related parties: sales to AMBO Agritec Ltd. were ₹288.97 lakh in FY26 and ₹431.57 lakh in FY25, and ₹322.50 lakh of property was bought from related parties in FY25 (our arithmetic, RHP p.64, RHP p.65) → transactions with the promoter's other companies and relatives can carry terms that differ from arm's length → the Managing Director also runs Ambo Agritec Limited, which the Prospectus lists as a risk to management time (RHP p.49).

Debt cost: ₹346.52 lakh of the ₹698.15 lakh of borrowings is unsecured, mostly at 15.50% to 19.50% a year, and finance costs rose from ₹40.86 lakh to ₹75.31 lakh in FY26 (RHP p.61, RHP p.234, RHP p.236) → none of the issue is set aside to repay debt → the ₹180.00 lakh of general corporate purposes may be used for repayment, among other things (RHP p.104).

Compliance record: the Prospectus lists years of late company filings, including FY2018-19 accounts filed 2,486 days late, a late annual general meeting under compounding, consolidated accounts not prepared for FY2020-21, and late GST and provident fund filings (RHP p.22, RHP p.28, RHP p.29, RHP p.30) → penalties or compounding fees may follow → interest on delayed statutory dues rose from ₹0.36 lakh to ₹8.46 lakh in FY26 (RHP p.247).

Issue-specific: no order has been placed for the showroom interiors or stock, the quotations are valid until January 5, 2027, the objects have not been appraised, and issue expenses of ₹176.25 lakh are 8.09% of the issue (RHP p.43, RHP p.93, RHP p.104, RHP p.106).

19Litigation and regulatory matters

Cases against Sollfege Smart Electronics and its promoters

There are no criminal proceedings and no statutory or regulatory actions against the company, the promoter or the directors, and no dues outstanding to the provident fund or state insurance authorities (RHP p.251, RHP p.252, RHP p.253). The group company figure covers seven income-tax demands of ₹139.31 lakh, fifteen TDS matters of ₹11.08 lakh and four GST demands of ₹64.00 lakh, three of them under writ petitions, and a commercial suit claiming ₹14.11 lakh plus damages of ₹62.76 lakh over an undelivered soya meal contract (RHP p.253, RHP p.254, RHP p.255, RHP p.256). These are demands and claims, not settled amounts.

20Related-party transactions

Source: RHP p.64, RHP p.65. The property and consultancy rows are our arithmetic on the lines the table lists.

The related-party statement classes Om Prakash Agarwal, Manoj Agarwal, Rajib Nahar and Sushila Agarwal as relatives of key management personnel, and AMBO Agritec Ltd. and Estates B.S. Nahar as enterprises owned or significantly influenced by key management personnel or their relatives (RHP p.231).

What appeared in the two years before the filing: the ₹355.00 lakh loan conversion, the FY25 property purchases after advances of ₹39.39 lakh and ₹168.17 lakh paid in FY24, consultancy fees to the promoter's parents from FY25, and directors' pay, sitting fees and officer salaries from FY26, including ₹3.78 lakh to Mihir Kumar Dutta, ₹4.70 lakh to Jayanta Kumar Das and ₹2.79 lakh to MD Naim (RHP p.64).

Loans from Om Prakash Agarwal and Sushila Agarwal of ₹38.50 lakh and ₹46.00 lakh were taken and repaid within FY24 (RHP p.64). The ₹136.16 lakh that AMBO Agritec Ltd. owed at March 2025 had been received by March 2026 (RHP p.65).

21What the offer document does not say

No customer, supplier or brand in the concentration tables is named, so the 24.94% customer and the 59.01% supplier cannot be identified. Units sold, average selling prices and gross margin by product or brand are not disclosed, so the rise in gross margin from 26.2% to 33.1% cannot be explained from the document. The Prospectus does not say what made Bihar 43.84% of FY24 revenue or why it fell to 0.58%.

It gives no sales, rent or profit by showroom beyond revenue, and no expected sales or payback for the twelve new sites. It does not say how the proposed Gurugram and Guwahati sites relate to the premises already rented at the same addresses. The age of the ₹1,349.70 lakh of inventory is not given. The relationship of Rajib Nahar, Nandini Agarwal, Raghav Nahar and Ambo Exports Private Limited to the promoter is not specified.

Market data is from public sources and not verified.

22Five questions for management

1. What share of the ₹1,349.70 lakh of inventory at March 2026 is display stock, and how much of it is more than a year old?
2. What explains the rise in gross margin from 26.2% of revenue in FY24 to 33.1% in FY26: mix, brand terms or pricing?
3. Who was the customer worth ₹808.52 lakh in FY24, and does that account explain the ₹812.44 lakh of Bihar revenue that year?
4. On what terms are the sales to AMBO Agritec Ltd. made, and what products made up the ₹288.97 lakh of FY26 sales to it?
5. What revenue does each new 500 to 600 square foot West Bengal showroom need to cover its rent, staff and the interest on its stock, and are the Gurugram and Guwahati sites new or the existing ones enlarged?

1Sources and cited facts

This study was read from 1 document the company filed. The 126 figures it cites are listed under the document each came from, with the page and the sentence as printed.