Vetrivel Explosives Limited IPO

01At a glance

What the company does: manufactures emulsion and slurry explosives, detonating cord and Pentaerythritol Tetranitrate (PETN) at a 7.92 acre licensed plant at T. Murungapatty village, Tiruchirappalli district, Tamil Nadu, and also earns revenue from a hotel and a hotel management college in Salem district (DRHP p.105, DRHP p.163).

Who pays it: 265 customers in FY26, all of whom had bought before, across public sector and large mining companies, infrastructure and construction firms, private mine and quarry operators and export buyers (DRHP p.110, DRHP p.118). The document does not name its current customers. Tamil Nadu, Kerala, Karnataka and Andhra Pradesh brought 96.63% of FY26 revenue, and Vietnam the remaining 3.37% (DRHP p.111).

Why it is raising money: ₹43.7 crore of the net proceeds goes to repaying or prepaying borrowings, all of it scheduled for FY 2027-28, with the rest for general corporate purposes capped at the lower of 15% of the gross amount raised or ₹10.0 crore (DRHP p.75, DRHP p.76). There is no offer for sale (DRHP p.1).

How fast it has grown: revenue went from ₹250.8 crore in FY24 to ₹232.1 crore in FY26, a fall of about 3.8% a year, while profit after tax went from ₹10.5 crore to ₹14.6 crore, about 17.8% a year (our arithmetic, DRHP p.161).

The one thing to understand: profit rose in FY26 as revenue fell 20.01%, and inventory rose from ₹80.1 crore to ₹111.1 crore, of which finished goods went from ₹3.5 crore to ₹26.6 crore (DRHP p.85, DRHP p.173). The P&L carries that stock build as a ₹23.4 crore credit against costs, which compares with FY26 profit before tax of ₹19.8 crore (DRHP p.161).

02The business, in plain words

What Vetrivel Explosives does

Vetrivel Explosives was incorporated in November 1999 and makes the charge, the primer and booster, and the cord used in rock blasting under its "SUN" brands (DRHP p.129, DRHP p.105). Its largest product, Sun 90-25mm, is a small-diameter cartridged emulsion explosive used in quarries, metal mines and tunnelling; Sun Prime is an aluminised slurry primer; Suncord is detonating cord; and PETN is the explosive core of detonating cord, which the company makes on two lines of its own and also sells (DRHP p.107, DRHP p.108, DRHP p.109).

A quarry, mine or infrastructure contractor needs explosives and initiating cord for blasting → the company mixes ammonium nitrate and other oxidisers with fuel into slurry or emulsion, fills cartridges, nitrates pentaerythritol into PETN and spins it into detonating cord → it stores the product in licensed magazines and delivers it in its own 91 licensed vehicles → it is paid the price of the cartridges, cord or PETN sold (DRHP p.112, DRHP p.113, DRHP p.114, DRHP p.109).

The plant has three emulsion and slurry lines built between 2003 and 2014, a bulk emulsion matrix line from 2014, PETN lines from 2001 and 2014, and four detonating fuse lines (DRHP p.117). Raw materials include ammonium nitrate, calcium nitrate, sodium nitrate, nitric acid, fuel oil, waxes, emulsifiers, pentaerythritol and aluminium powder (DRHP p.24, DRHP p.116). Imported raw materials were 30.87% of FY26 raw material consumption and 60.48% in FY25 (DRHP p.195).

The company also owns a hotel and a hotel management college in Salem district, which brought 16.64% of FY26 revenue between them (our arithmetic, DRHP p.108). A composite scheme before the NCLT, Chennai would demerge this hotel undertaking, college included, into Sivasakthi Hospitality Private Limited, a promoter group company, with an appointed date of April 1, 2026; the scheme still awaits the NCLT's final sanction (DRHP p.23, DRHP p.132). Shareholders of the company would receive one share of Sivasakthi Hospitality Private Limited for every share held on the record date (DRHP p.132).

The company ran with 39 employees on its rolls and 49 contract workers in July 2026 (DRHP p.110). It holds an ISO 9001:2015 certificate for the manufacture and export of industrial and civil explosives (DRHP p.231).

Earnings equation: Revenue = tonnes of slurry and emulsion explosives sold × price per tonne + metres of detonating cord sold × price per metre + tonnes of PETN sold × price per tonne + hotel and college income. The document gives production by product but not quantities sold or prices, so the equation cannot be filled in from the filing (DRHP p.117, DRHP p.118). Read from the filing: FY26 revenue from Sun 90-25mm and Sun Prime of ₹167.1 crore against 30,572.25 MT of slurry and emulsion produced is about ₹54,600 a tonne of production, not of sales (our arithmetic, DRHP p.108, DRHP p.117).

03Where the money comes from

Source: DRHP p.108, converted from ₹ lakh. Sun 90-25mm was 58.57%, 55.23% and 65.69% of revenue in the three years (DRHP p.23). PETN swung from 9.27% to 17.86% and back to 3.37%; the company says these sales are order-driven (DRHP p.108, DRHP p.109). The segment note reports profit before interest of ₹17.1 crore, ₹19.6 crore and ₹30.8 crore for explosives, ₹3.7 crore, ₹3.2 crore and ₹0.91 crore for the hotel, and a small loss in the college each year (DRHP p.192).

By state, Tamil Nadu was 62.01%, 58.17% and 60.70% of revenue, Karnataka 12.27%, 11.05% and 16.53%, Kerala 12.17%, 9.69% and 14.64%, and Andhra Pradesh 3.46%, 2.68% and 4.76% (DRHP p.111). Exports, all to Vietnam, were ₹25.3 crore, ₹53.4 crore and ₹7.8 crore (DRHP p.111). The company also reports a July 2026 shipment of 2 million metres of detonating cord to Nigeria and a 90 MT PETN order from Vietnam worth USD 873,000 (DRHP p.105).

Vetrivel Explosives customers: how concentrated the revenue is

Source: DRHP p.117. In FY26 revenue did not depend on a few customers: the largest was 4.74% and the top ten 22.01% of revenue (DRHP p.117). FY25 was different: the largest customer bought ₹51.8 crore, 17.86% of revenue, and the risk factors say a single customer took a significant portion of that year's PETN sales, which were also 17.86% of revenue (DRHP p.117, DRHP p.27).

The risk factor table gives top five customers as 31.07% for FY25, against 32.18% in the business chapter (DRHP p.25, DRHP p.117). Supplier concentration has fallen: the top ten suppliers were 66.42%, 55.01% and 39.01% of purchases, and the largest 28.06%, 16.09% and 13.46% (DRHP p.116).

04The growth record

Vetrivel Explosives financials: revenue, profit and margins

Source: DRHP p.161, DRHP p.162, DRHP p.193, DRHP p.208, DRHP p.160, DRHP p.85, converted from ₹ lakh. Revenue went from ₹250.8 crore in FY24 to ₹232.1 crore in FY26 and profit after tax from ₹10.5 crore to ₹14.6 crore (DRHP p.161). Operating cash flow was ₹19.0 crore in FY26 (DRHP p.162).

Our arithmetic over FY24 to FY26: revenue fell about 3.8% a year (our arithmetic, DRHP p.161), EBITDA grew about 23.2% a year (our arithmetic, DRHP p.193) and profit after tax grew about 17.8% a year (our arithmetic, DRHP p.161). EBITDA margin, on total income as the document computes it, moved from 9.96% to 16.42%, up 646 basis points, so from 10.0% to 16.4% rounded (DRHP p.208). Revenue rose 15.68% in FY25 and fell 20.01% in FY26 (DRHP p.85).

The year ends on March 31 throughout and the statements were restated by a peer-reviewed firm, Shubham D Jain & Co., not the statutory auditor (DRHP p.26). The document prints two EBITDA series: ₹25.1 crore, ₹28.9 crore and ₹38.2 crore, which add back interest cost only, and ₹26.5 crore, ₹30.9 crore and ₹39.4 crore in the KPI table, which add back all finance costs (DRHP p.193, DRHP p.85).

It also prints two net worth series: the KPI table labels ₹110.1 crore as net worth excluding revaluation reserves, while the accounting ratios give ₹69.0 crore on that definition (DRHP p.85, DRHP p.193). The difference is a ₹38.0 crore revaluation reserve and a ₹3.1 crore capital reserve (DRHP p.170). RoCE is 14.58%, about 14.6%, in the KPI table and 13.99% in the ratio annexure (DRHP p.85, DRHP p.198).

Other income was ₹0.27 crore in FY26, 1.35% of profit before tax, about 1.3%, against 14.82% in FY25 (DRHP p.186). Net debt, borrowings less cash and bank balances of ₹0.89 crore, was about 2.8 times FY26 EBITDA (our arithmetic, DRHP p.160, DRHP p.193). Debt to equity was 0.97 times, about 1.0×, on shareholders' funds including the revaluation reserve (DRHP p.85).

Contingent liabilities at March 31, 2026 were ₹14.7 crore of claims not acknowledged as debt (DRHP p.50). Related-party transactions were ₹18.0 crore in FY26, 7.74% of revenue (DRHP p.28). Receivable days moved from about 14 in FY24 to about 17 in FY26 (our arithmetic, DRHP p.160, DRHP p.161), and inventory was about 175 days of FY26 revenue (our arithmetic, DRHP p.160, DRHP p.161). Nitrate mixture capacity was 61% used in FY26 (DRHP p.117).

Of the fresh issue, ₹43.7 crore is earmarked for repaying borrowings (DRHP p.75).

Concentration in FY26: the largest customer was 4.7% of revenue, the top five 15.4% and the top ten 22.0% (DRHP p.117), the top ten suppliers 39.0% of purchases (DRHP p.116), Sun 90-25mm 65.7% of revenue (DRHP p.108) and Tamil Nadu 60.7% (DRHP p.111). Hotel and college together were 16.6% of FY26 revenue (our arithmetic, DRHP p.108).

05What the growth is made of

Revenue fell ₹18.7 crore from FY24 to FY26 (our arithmetic, DRHP p.161). By product, PETN fell ₹15.4 crore and explosives trading, which stopped in FY26, ₹13.0 crore; Sun 90-25mm added ₹5.6 crore and Suncord ₹5.1 crore; Sun Prime and the hotel each fell about ₹0.71 crore and the college added ₹0.35 crore (our arithmetic, DRHP p.108). The company puts the FY26 fall down mainly to fewer PETN export orders, no trading and lower sales of other explosives (DRHP p.216).

Production does not explain the fall. Slurry and emulsion production went from 31,249.75 MT in FY24 to 27,551.25 MT in FY25 and 30,572.25 MT in FY26; PETN production from 393.18 MT to 526.98 MT and 348.42 MT; detonating fuse from 29 million metres to 34.03 and 25.19 million metres (DRHP p.117, DRHP p.118). The company says part of FY26 production was held as finished goods inventory (DRHP p.217). The document does not disclose quantities sold or prices, so the change in revenue cannot be separated into volume and price. That sentence is the finding.

Profit moved the other way from revenue in FY26. Explosives segment profit went from ₹19.6 crore to ₹30.8 crore, which the company attributes to lower export, freight and imported raw material costs and lower material cost as a share of revenue (DRHP p.192, DRHP p.218). The P&L credit for the rise in finished goods and other stock was ₹23.4 crore in FY26 (DRHP p.161).

06Earnings quality

The item that needs explaining is inventory. It went from ₹46.6 crore at March 2024 to ₹80.1 crore at March 2025 and ₹111.1 crore at March 2026; raw material was ₹81.9 crore and finished goods ₹26.6 crore at the last date (DRHP p.173). The company says raw materials, including imported ones, were bought in larger quantities in FY25 and that part of FY26 production was held as finished goods (DRHP p.220, DRHP p.217). The build was funded by an overdraft that went from ₹16.3 crore to ₹49.6 crore over the two years (DRHP p.182).

Three further points sit in the notes. Restated FY24 profit of ₹10.5 crore is above the audited ₹7.7 crore because wage arrears of ₹4.1 crore booked in FY24 were moved to earlier years (DRHP p.168). Stock and creditor figures given to HDFC Bank each quarter differ from the books; at March 2026 the books show ₹111.1 crore of stock and the statement to the bank ₹93.4 crore (DRHP p.197). Fixed deposit confirmations and some bank statements were not received, so those balances were not verified (DRHP p.173).

07The balance sheet

At March 31, 2026 total assets were ₹250.1 crore: property, plant and equipment ₹95.9 crore (land ₹44.6 crore after revaluation), capital work in progress ₹5.8 crore, inventories ₹111.1 crore, trade receivables ₹10.6 crore, short-term loans and advances ₹20.5 crore, of which ₹17.9 crore to related parties, and cash and bank ₹0.89 crore (DRHP p.160, DRHP p.175, DRHP p.174). Against that: short-term borrowings ₹72.8 crore, long-term borrowings ₹34.0 crore, trade payables ₹20.2 crore and shareholders' funds ₹110.1 crore (DRHP p.160).

Borrowings of ₹106.8 crore comprise working capital loans repayable on demand ₹64.6 crore, secured term loans from banks ₹17.0 crore and from other lenders ₹20.9 crore, vehicle loans ₹1.1 crore, unsecured loans ₹0.15 crore and an interest-free loan from Vetrivel Ramalingam of ₹3.07 crore (DRHP p.202, DRHP p.171). Loans guaranteed by directors and others were ₹85.9 crore (DRHP p.183). Contingent liabilities were ₹14.7 crore of tax and other claims (DRHP p.50). The restated annexure also records a ₹60.0 crore corporate guarantee given for a group company, while the summary of contingent liabilities shows no guarantees (DRHP p.195, DRHP p.50). There are no capital commitments (DRHP p.50).

Source: DRHP p.160, DRHP p.75, our arithmetic. The after-issue figure assumes the whole ₹43.7 crore is applied to the March 2026 balance and nothing else changes. The facility named for repayment is an HDFC Bank working capital demand loan of ₹50.0 crore outstanding on September 20, 2026 (DRHP p.78). Net worth after the issue cannot be stated because the price is blank (DRHP p.201).

08What the money is for

Vetrivel Explosives IPO objects: what the money is for

Source: DRHP p.75, DRHP p.79. The share of each object cannot be worked out until the price fixes the issue size. The ₹43.7 crore is to be deployed in FY 2027-28 against a working capital demand loan from HDFC Bank sanctioned on June 27, 2026 at 9.40%, repayable on demand, with ₹50.0 crore outstanding on September 20, 2026 (DRHP p.76, DRHP p.78).

Prepayment charges, if any, come from internal funds or general corporate purposes (DRHP p.76). The board minute on page 76 gives the amount as ₹4,373.37 lakh while the table gives ₹4,374.37 lakh (DRHP p.76). The objects have not been appraised by any bank or agency (DRHP p.80). No issue money goes to new capacity.

Into the business up to 61,00,000 new shares of ₹10 face value; the rupee amount depends on the price, which is not set (DRHP p.44). To selling shareholders nothing; the entire issue is a fresh issue (DRHP p.1).

09Who is selling

Vetrivel Explosives IPO offer for sale: who is selling

No shareholder is selling. The cover page states that details of an offer for sale are not applicable as the entire issue is a fresh issue of equity shares (DRHP p.1). The promoters and promoter group will not take part in the issue (DRHP p.73). The fresh issue of up to 61,00,000 shares would be about 27.6% of the post-issue share count of 2,21,00,000 if fully allotted (our arithmetic, DRHP p.44).

10Promoters

The document names three promoters: Vijayakannan Ramalingam, Vetrivel Ramalingam and Premalatha Rangasamy Mudaliar (DRHP p.1). Together with four promoter group members they hold all 1,60,00,000 shares (DRHP p.68). The document lists Vijayakannan Ramalingam and Vetrivel Ramalingam as brothers and Premalatha Rangasamy Mudaliar as the mother of both (DRHP p.137, DRHP p.149, DRHP p.150). The Chief Financial Officer, Chamundeeswari Vijayakannan, is listed as the spouse of Vijayakannan Ramalingam (DRHP p.145).

Vijayakannan Ramalingam, aged 48, is Chairman and Managing Director, a director since incorporation, a chemical engineer from Bangalore University with over 26 years in explosives, and chairman of the Chemical & Allied Products Export Promotion Council (DRHP p.134, DRHP p.136). Vetrivel Ramalingam, aged 42, is a non-executive director appointed September 21, 2026, associated with the company since 2018, with 15 years in the hotel industry (DRHP p.134, DRHP p.147). Premalatha Rangasamy Mudaliar, aged 69, is an initial subscriber and holds no directorship (DRHP p.148).

Pay: the related-party note gives Vijayakannan Ramalingam ₹0.72 crore in FY24 and ₹1.50 crore in FY25 and FY26, and Vetrivel Ramalingam ₹0.60 crore in each year (DRHP p.189). That squares with total director remuneration in the accounts and with the results discussion, which says the managing director's pay was raised to ₹1.50 crore from ₹0.72 crore in FY25 (DRHP p.178, DRHP p.219).

Two other pages print ₹0.72 crore for Vijayakannan Ramalingam in FY26 (DRHP p.52, DRHP p.138). On the related-party note, pay to the two promoter directors went from ₹1.32 crore in FY24 to ₹2.10 crore in FY26 (our arithmetic, DRHP p.189). Present terms are ₹1.50 crore a year for five years from April 1, 2024 (DRHP p.138).

Salaries to relatives of key managerial personnel were ₹1.68 crore, ₹1.68 crore and ₹1.20 crore, without a split by person (DRHP p.189).

Pledges, guarantees and loans: no promoter shares are pledged (DRHP p.71). Vijayakannan Ramalingam, Vetrivel Ramalingam, Premalatha Rangasamy Mudaliar and Krishnasamy Ramalingam have personally guaranteed the HDFC Bank facilities (DRHP p.180). Promoter loans to the company, interest-free and repayable on demand, were ₹7.7 crore at March 2024, ₹10.4 crore at March 2025 and ₹3.07 crore at March 2026 (DRHP p.171, DRHP p.183).

Cases: a criminal case is pending against Vijayakannan Ramalingam and three others under Section 304 Part II of the Indian Penal Code and the Explosives Act, arising from an explosion on December 1, 2016 at the company's Unit II plant; the next hearing is October 9, 2026 (DRHP p.227). Six tax demands against the two brothers total ₹0.04 crore (DRHP p.228). There has been no SEBI or stock exchange disciplinary action against the promoters in five years (DRHP p.228).

Group companies: Sivasakthi Hospitality Private Limited, Trident Explosives Private Limited, Krishnasamy Homes Private Limited, Hanuman Explosives Private Limited, Sunpenta Mining Services Private Limited and Sri Dhurga Power Private Limited; the document says they are in partly or fully similar lines of business and does not print their financials, pointing to the company's website instead (DRHP p.152, DRHP p.154). None is listed (DRHP p.154).

Promoter economics: every share was issued or transferred at ₹10, its face value. The promoters subscribed at incorporation in 1999 and in further allotments between 2001 and 2009, took rights issues at ₹10 in 2015, and received 40,00,000 shares on March 30, 2016 on conversion of loans into equity (DRHP p.64, DRHP p.65, DRHP p.66).

Shares moved among family members at ₹10 in 2007, 2013, 2015 and 2016, and on September 15, 2026 Premalatha Rangasamy Mudaliar transferred 50 shares each to four promoter group members at ₹10 (DRHP p.69, DRHP p.70, DRHP p.90). The average cost of acquisition is ₹7.62 a share for Premalatha Rangasamy Mudaliar, ₹7.42 for Vijayakannan Ramalingam and ₹10 for Vetrivel Ramalingam (AP p.7).

No shares have been issued in the two years before the filing (DRHP p.66).

11Who already owns it

Vetrivel Explosives promoter holding before and after the IPO

Source: DRHP p.69. Promoters and promoter group hold 100% of 1,60,00,000 shares, and the company has seven shareholders (DRHP p.68, DRHP p.71). The holding after the issue is left blank (DRHP p.69). If all 61,00,000 new shares are allotted the post-issue count is 2,21,00,000, and promoter and promoter group holding falls from 100.0% to 72.4% (our arithmetic, DRHP p.69). The promoters have offered 44,20,000 shares for the three-year lock-in, which the document describes as 20% of post-issue capital (DRHP p.71). There is no investor outside the family, so there is no pre-IPO investor to name.

12What changed just before the IPO

• Revenue and profit: revenue went from ₹250.8 crore in FY24 to ₹232.1 crore in FY26 and profit after tax from ₹10.5 crore to ₹14.6 crore (DRHP p.161).
• Receivable days moved from about 14 in FY24 to about 17 in FY26 (our arithmetic, DRHP p.160, DRHP p.161).
• Inventory rose from ₹46.6 crore in March 2024 to ₹111.1 crore in March 2026 (DRHP p.173).
• Land revalued twice: factory land up ₹22.5 crore in FY25, then factory and other land up ₹15.5 crore in FY26, credited to a revaluation reserve of ₹38.0 crore (DRHP p.170, DRHP p.196). The history chapter says the company has not revalued its assets in the last ten years (DRHP p.132).
• Capacity added: nitrate mixture capacity went from 40,000 MT to 50,000 MT and PETN from 1,500 MT to 2,000 MT in FY26, which the company links to a new Process IV facility and additional PETN plants (DRHP p.117, DRHP p.118, DRHP p.219).
• Promoter pay rose: pay to the two promoter directors went from ₹1.32 crore in FY24 to ₹2.10 crore in FY26 (our arithmetic, DRHP p.189).
• Demerger proposed: the board approved on July 6, 2026 a scheme to move the hotel and college to Sivasakthi Hospitality Private Limited from April 1, 2026; the NCLT dispensed with meetings on September 11, 2026 and final sanction is pending (DRHP p.132).
• Objects widened, then a demerger: on September 16, 2026 shareholders moved the hotel, real estate and other objects into the main objects clause (DRHP p.130).
• Converted to a public company: fresh certificate dated September 26, 2026 (DRHP p.129).
• New board and officers: two independent directors, a non-executive director and two whole-time directors on September 21, 2026; a company secretary on September 1, 2026 and a chief financial officer on September 21, 2026; P. Prakasam resigned as a director on September 28, 2026 (DRHP p.140, DRHP p.146).
• Registered office moved on August 17, 2026 to leased premises in Salem (DRHP p.129).
• Pre-IPO placement: none; no shares have been issued in the two years before the filing (DRHP p.66).
• Last allotment before the IPO: 40,00,000 shares at ₹10 on March 30, 2016, on conversion of loans into equity (DRHP p.66).
• Small transfers: 50 shares each to four promoter group members on September 15, 2026 at ₹10 (DRHP p.90).
• Auditor change: none in the last three years (DRHP p.56).
• Promoter loans repaid: loans from directors fell from ₹10.4 crore to ₹3.07 crore in FY26 (DRHP p.171).

13Capacity and expansion

Source: DRHP p.117, DRHP p.118, certified by Axium Valuation Services LLP, chartered engineer. FY25 and FY24 installed capacity was 40,000 MT for nitrate mixture and 1,500 MT for PETN (DRHP p.117, DRHP p.118). The bulk emulsion matrix line and cast boosters produced nothing in any of the three years (DRHP p.118).

The explosives licences on file allow manufacture of 25,000 MT of nitrate mixture, 80 million metres of detonating fuse, 1,860 MT of PETN and 20 MT of cast boosters, plus 25,000 MT a year of site mixed explosives with five bulk delivery vehicles (DRHP p.233). The document does not reconcile these licensed quantities with the installed capacities above. None of the issue money goes to capacity (DRHP p.75). The company says it intends to raise utilisation through PETN and cord exports, bulk explosive tenders and a larger dealer network (DRHP p.111). The document does not say what utilisation the plant needs to cover its own costs.

14Market size and industry structure

Vetrivel Explosives industry: market size and growth

The industry chapter is not a commissioned report. The company says it has not commissioned one and that the chapter draws on websites and publicly available documents that nobody connected with the issue has verified (DRHP p.38, DRHP p.95). Most of the chapter is about the world and Indian economies, citing the IMF's April 2026 outlook and IBEF pages (DRHP p.95, DRHP p.98). The part on explosives is two pages, quoting a Persistence Market Research web page and a Ken Research web page (DRHP p.102, DRHP p.103, DRHP p.104).

As claimed: the Ken Research page puts the India industrial explosives market at USD 1,420 million in 2025 (DRHP p.103). The Persistence Market Research page puts the global market at USD 14.0 billion in 2025 (DRHP p.102). Neither is in rupees, and neither is the company's own commissioned study.

The part that is addressable: the company sells cartridged slurry and emulsion explosives, detonating cord and PETN, mostly in four southern states, plus PETN exports to Vietnam (DRHP p.108, DRHP p.111). The chapter does not size the market for cartridged explosives, detonating cord or PETN, nor the market in Tamil Nadu or southern India, so the addressable part cannot be stated from the filing.

What the company is today: FY26 explosives revenue was ₹193.5 crore (DRHP p.108). At the document's own exchange rate of ₹94.65 to the dollar on March 31, 2026, the Ken Research figure is about ₹13,440 crore, so the company's explosives revenue is about 1.4% of it (our arithmetic, DRHP p.19, DRHP p.103). That compares a fiscal year with a calendar year and is a rough scale only.

Size over time: the Ken Research page gives a historical growth rate of 11.61% a year over 2020 to 2025, which it attributes to post-pandemic mining recovery, volume growth and raw material price changes (DRHP p.103). The report projects the India market at USD 2,339 million by 2032, 7.39% a year, and volume from about 2.23 million tonnes in 2025 to 3.45 million tonnes in 2032 (DRHP p.103, DRHP p.104). Persistence Market Research projects the global market at USD 22.7 billion by 2032, 7.1% a year (DRHP p.102). These are the reports' projections, not figures from the company's accounts.

Segments: Persistence Market Research says bulk explosives hold a 75.6% share of the global market (DRHP p.103). The Ken Research page expects more value from electronic initiation, higher-value packaged formulations and drill-and-blast services, and says suppliers with site-mixed emulsion, electronic detonators, mine-site teams and plants in several regions should capture more value than suppliers of conventional cartridge products only (DRHP p.103). The company's sales are cartridged products, cord and PETN; its bulk line was idle in all three years (DRHP p.118).

What drives demand: the chapter names mine development, higher private and commercial coal output, metal ore mining and infrastructure excavation, and a government plan for about 1.5 billion tonnes of domestic coal around 2029-30 (DRHP p.103). It also names cement quarrying and tunnelling (DRHP p.104). Asia accounts for 61.7% of global mining production, according to Persistence Market Research (DRHP p.103). India's mineral production rose 5.9% year on year in the same source (DRHP p.102).

Structure: the chapter names only global firms, Orica, Dyno Nobel, Enaex, EURENCO and BME, and says consolidation is intensifying among the top players (DRHP p.102, DRHP p.103). It names no Indian competitor and gives no market shares for India. The business chapter calls the Indian industry one of stringent regulation and high entry barriers, with competition on quality, supply reliability, price, compliance and customer relationships (DRHP p.118). The company names Beezaasan Explotech Limited, Keltech Energies Limited and Premier Explosives Limited as listed peers (DRHP p.86).

Inputs and trade: the main inputs are ammonium nitrate, calcium and sodium nitrate, nitric acid, fuel oil, waxes, emulsifiers, pentaerythritol and aluminium powder, whose prices move with global commodities, logistics and sanctions (DRHP p.24, DRHP p.116). Imported materials were 30.74%, 60.48% and 30.87% of raw material consumed in FY24, FY25 and FY26 (DRHP p.195). The Ken Research page says ammonium nitrate price escalation is unlikely to repeat uniformly (DRHP p.103).

Rules: manufacture, possession, sale, transport, import and export of explosives need licences under the Explosives Act, 1884 and the Explosives Rules, 2008, administered by PESO; road vans need Form LE-7 licences, and licences can be suspended or revoked (DRHP p.122). The company holds manufacturing and magazine licences from the Chief Controller of Explosives and 55 LE-7 transport licences (DRHP p.233). Factory, pollution, hazardous waste, boiler and public liability insurance rules also apply (DRHP p.122, DRHP p.124, DRHP p.125).

What the chapter says can go wrong: the Ken Research page names pressure from the transition away from coal, input cost volatility and permitting delays as the main downside variables (DRHP p.104). Persistence Market Research says strict regulatory controls and the risks of handling hazardous material limit expansion in sensitive and dense regions (DRHP p.103). The company says its business is not seasonal (DRHP p.223). The chapter does not size the cartridged explosives, detonating cord or PETN segments, nor Tamil Nadu.

15Competitive position

Vetrivel Explosives competitors

Source: DRHP p.85, DRHP p.88, DRHP p.89, converted from ₹ lakh. The document gives peers' debt to equity rather than borrowings (DRHP p.88, DRHP p.89). The issuer's revenue includes ₹38.6 crore from the hotel and college (DRHP p.108). The industry chapter names no Indian competitor beyond these listed peers (DRHP p.103).

What the company puts forward: in-house PETN on two licensed lines, which it says few detonating cord makers have; a single-source range from 25 mm to 200 mm cartridges; 25 years of licensed operation; a plant within reach of the four southern states that brought 96.63% of FY26 domestic revenue; its own 91 licensed vehicles; and full repeat custom in FY26 (DRHP p.109, DRHP p.108, DRHP p.111). Against that: one plant with no back-up, 60.70% of revenue from Tamil Nadu, 65.69% from one product, the highest debt to equity of the four, and a bulk line that has not produced (DRHP p.25, DRHP p.23, DRHP p.85, DRHP p.118).

16Peers the company named

Peers named in the offer document: Beezaasan Explotech Limited, Keltech Energies Limited and Premier Explosives Limited (DRHP p.86).

The document picks them as listed companies whose business is comparable (DRHP p.84). Beezaasan Explotech is about the same size as the issuer, ₹211.6 crore of FY26 revenue against ₹232.1 crore, with a lower RoCE (DRHP p.88). Keltech Energies is more than twice the issuer's size at ₹532.1 crore, and Premier Explosives ₹388.3 crore with a PAT margin of 11.80%, nearly twice the issuer's (DRHP p.88, DRHP p.89).

The document prints their P/E on September 28, 2026 closing prices as 67.45, 43.86 and 79.47, an average of 63.59 (DRHP p.83, DRHP p.84). The company's FY26 EPS is ₹9.14 (DRHP p.84). With no price band, no P/E for the company can be stated.

17Risks, in plain words

Vetrivel Explosives IPO risks

One product: Sun 90-25mm was 65.69% of FY26 revenue (DRHP p.23). A fall in demand or price for it moves the whole company, because the next largest product, Suncord, was 8.01% (DRHP p.108).

One state, one plant: Tamil Nadu brought 60.70% of FY26 revenue, and all manufacturing is at one site in Tiruchirappalli district with no back-up (DRHP p.23, DRHP p.25). Any stoppage there stops the explosives business.

Hazard and safety: the company has had a blast at its plant, and a criminal case from a December 1, 2016 explosion at Unit II is pending against its managing director (DRHP p.25, DRHP p.227). Its claim for ₹6.0 crore under a fire insurance policy for a December 2016 fire was rejected and is under appeal (DRHP p.226).

Customers and PETN: the largest customer swung from 7.93% to 17.86% to 4.74% of revenue as PETN orders came and went, and PETN revenue fell from ₹51.8 crore in FY25 to ₹7.8 crore in FY26 (DRHP p.117, DRHP p.108). Long-term contracts are not in place with all customers (DRHP p.25).

Working capital and debt: inventory was ₹111.1 crore against FY26 revenue of ₹232.1 crore (DRHP p.160, DRHP p.161). Borrowings were ₹106.8 crore, of which ₹64.6 crore repayable on demand, and the debt service coverage ratio was 0.32 in FY26 (DRHP p.202, DRHP p.198). Operating cash flow was −₹19.8 crore in FY25 (DRHP p.162).

Regulation and licences: the business depends on PESO licences that can be suspended or revoked (DRHP p.122). The company lists historical lapses: loans and advances to directors and related entities in breach of Section 185, no whole-time company secretary from FY 2018-19 to FY 2025-26, no cost audit report for FY 2019-20, no internal auditor for two years, unspent CSR and unregistered charges, with compounding applications planned (DRHP p.31, DRHP p.32).

Records: some statutory forms, allotment forms, share transfer forms, sanction letters and death certificates of promoter group members are not traceable, and the document relies on internal records and affidavits instead (DRHP p.31, DRHP p.34, DRHP p.64). The statutory auditor holds no peer review certificate (DRHP p.26).

Related parties and group: advances to related companies were ₹17.9 crore at March 2026, and six group companies are in partly or fully similar businesses (DRHP p.174, DRHP p.154). The annexure records a ₹60.0 crore corporate guarantee for a group company (DRHP p.195).

Demerger: the hotel and college, ₹38.6 crore of FY26 revenue, are to leave the company under a scheme still awaiting the NCLT's final sanction (DRHP p.108, DRHP p.23). Lender consent from Kotak Mahindra Bank for the issue had not been received at filing (DRHP p.28).

Issue-specific: promoters' average cost is ₹7.42 to ₹10 a share (AP p.7). The price, the general corporate purposes amount and the issue expenses are blank (DRHP p.75).

18Litigation and regulatory matters

Cases against Vetrivel Explosives and its promoters

Criminal: the case against the promoter and others is the only criminal matter; there is none against the company or other directors (DRHP p.224, DRHP p.227). The summary counts one criminal and six tax proceedings against the promoters (DRHP p.26).

Tax: the largest company demand is ₹8.96 crore for AY 2017 under Section 143(3), raised on December 31, 2019; others include ₹1.84 crore for AY 2025 and ₹0.67 crore for AY 2022 (DRHP p.226). The six GST demands for FY 2018-19 to FY 2024-25 are under appeal (DRHP p.226). The summary puts total amounts against the company at ₹14.8 crore (DRHP p.26).

Civil: Sri Devi Explosives and three others appealed a ₹0.21 crore decree for unpaid supplies, and K. Subramaniam appealed a ₹1.17 crore decree after depositing ₹1.20 crore in the High Court (DRHP p.225). The company is seeking ₹2.2 crore in execution against K. Subramaniam, ₹6.0 crore from The New India Assurance Company Limited on a rejected fire claim, and relief from a ₹1.31 crore VAT assessment on sales to Neyveli Lignite Corporation Limited for 2012-13 (DRHP p.225, DRHP p.226). Regulatory: no action by regulators is outstanding against the company (DRHP p.225). No litigation of the group companies is said to have a material impact (DRHP p.26).

19Related-party transactions

Source: DRHP p.188, DRHP p.189, converted from ₹ lakh. The document does not split these by company or person. The six related companies are Sivasakthi Hospitality Private Limited, Trident Explosives Private Limited, Krishnasamy Homes Private Limited, Hanumam Explosives Private Limited, Sunpenta Mining Services Private Limited and Sri Dhurga Power Private Limited, as printed in the related-party note (DRHP p.51). Unsecured loans from key managerial personnel at year end were ₹3.07 crore, ₹10.4 crore and ₹7.7 crore, interest-free (DRHP p.189, DRHP p.171). The company also pays lease rent of ₹0.01 crore a year split between key managerial personnel and a relative (DRHP p.188).

What appeared or changed in the two years before filing: purchases from related companies began in FY25 at ₹12.2 crore (DRHP p.188); the promoter loan moved from Vijayakannan Ramalingam, who had lent ₹10.4 crore at March 2025, to Vetrivel Ramalingam, who had lent ₹3.07 crore at March 2026 (DRHP p.183); and the hotel and college are to move to the related company Sivasakthi Hospitality Private Limited under the demerger (DRHP p.132). The company says its related-party transactions were at arm's length (DRHP p.28). It also discloses past advances to directors, relatives and interested entities in breach of Section 185 (DRHP p.31).

20What the offer document does not say

Quantities sold, prices and margins by product are not given. Current customers are not named, nor is the FY25 customer that took most of the PETN sales. There is no order book figure beyond one Vietnam PETN order and one Nigeria shipment (DRHP p.105).

The financials of the six group companies, including the one receiving the hotel and the one covered by a ₹60.0 crore corporate guarantee, are not in the document (DRHP p.152, DRHP p.195). The hotel and college's assets and liabilities that will leave are given only as segment totals, ₹56.3 crore of assets and ₹11.4 crore of liabilities at March 2026 (DRHP p.192).

The price band, issue size in rupees, general corporate purposes amount and issue expenses are blank (DRHP p.75). Capital work in progress is described with a placeholder that reads "Company to provide brief details of the ongoing projects" (DRHP p.219). The industry chapter does not size the segments the company sells into.

Inconsistencies are recorded as document matters, not business ones:

• Revaluation: the capital structure and the notes disclose land revaluations of ₹22.5 crore and ₹15.5 crore, while the history chapter says no revaluation in ten years (DRHP p.66, DRHP p.170, DRHP p.132).
• Guarantees: the restated annexure records a ₹60.0 crore corporate guarantee for a group company; the summary of contingent liabilities shows none (DRHP p.195, DRHP p.50).
• Bonus shares: the share capital note records 1,25,08,200 bonus shares and 5,267 shares issued without cash, while the capital history shows no bonus issue (DRHP p.169, DRHP p.64).
• Pay: the managing director's FY26 pay is ₹1.50 crore in the related-party note and ₹0.72 crore in the summary and management chapter (DRHP p.189, DRHP p.52, DRHP p.138).
• Net worth and EBITDA: two series of each, as set out in section 03 (DRHP p.85, DRHP p.193).
• FY26 detail: the results discussion gives export sales of ₹9.7 crore and closing raw material of ₹73.2 crore, against ₹7.8 crore and ₹81.9 crore in the restated notes (DRHP p.214, DRHP p.177).
• Concentration: FY25 top five customers 31.07% in one place and 32.18% in another; FY26 top five suppliers 27.23% and 30.32%; Tamil Nadu's FY25 share 58.71% and 58.17% (DRHP p.25, DRHP p.117, DRHP p.24, DRHP p.116, DRHP p.23, DRHP p.111).
• Related-party balances: ₹3.07 crore owed to key managerial personnel appears as a trade receivable in the summary and as a loan in the notes (DRHP p.52, DRHP p.189).
• Loans to directors: one page says loans have been granted to directors and senior management, another that none are outstanding (DRHP p.146, DRHP p.138).
• Objects: ₹4,373.37 lakh in the board minute and ₹4,374.37 lakh in the table (DRHP p.76, DRHP p.75).
• A risk factor speaks of the promoters' experience in the biodiesel industry and the steel business, and another of the specialty chemicals industry (DRHP p.35, DRHP p.36).

21Five questions for management

1. What quantities of Sun 90-25mm, Sun Prime, detonating cord and PETN were sold in FY24, FY25 and FY26, and at what average price per tonne or metre?
2. Of the ₹23.4 crore rise in finished goods and other stock in FY26, how much has been sold since March 31, 2026, and at what margin?
3. What revenue, profit, assets and debt do the hotel and college carry into Sivasakthi Hospitality Private Limited, and what does the explosives business look like on its own for FY26?
4. Which group company does the ₹60.0 crore corporate guarantee cover, what is that company's borrowing, and will the guarantee be released before listing?
5. How do installed capacities of 50,000 MT of nitrate mixture and 2,000 MT of PETN reconcile with manufacturing licences for 25,000 MT and 1,860 MT?

2Sources and cited facts

This study was read from 2 documents the company filed. The 172 figures it cites are listed under the document each came from, with the page and the sentence as printed.