Adroit Industries (India) IPO (23 Sep-25 Sep) Analysis

Manufacturer of Propeller Shafts and Driveline Components | Mainboard IPO | BSE and NSE

Based on the Red Herring Prospectus (RHP) filed by Adroit Industries (India) Limited, September 2026

STATUS: OPEN FOR SUBSCRIPTION | Anchor Date: September 22, 2026 | IPO Dates: September 23 to September 25, 2026

Adroit Industries (India) Limited is a vertically integrated manufacturer of propeller shafts and torque-transmission driveline components. The Company was originally founded as a partnership firm in 1966 and was incorporated as a private limited company in 1995. Its CIN is U74999MH1995PLC084474.

The registered office is in Maharashtra, and the Company primarily serves industrial, off-highway, and defence-related sectors. It exports to more than 32 countries spanning North America, Europe, Latin America, the Middle East, Africa, and Asia-Pacific.

The Company operates through three manufacturing facilities, all located in Madhya Pradesh. The Dewas Facility handles upstream operations including forging, die-making, and heat treatment.

The Pithampur Facility, operated through the wholly owned subsidiary Adroit Driveshafts Private Limited (referred to as ADPL), handles downstream machining, component finishing, and final assembly. The Sanwer Facility supports select finishing operations.

This vertically integrated structure allows the Company to control quality across the full production cycle, from raw material processing through to finished driveline components ready for dispatch.

The product portfolio comprises over 5,000 Stock Keeping Units (SKUs) of propeller shafts, cardan shafts, and related driveline components as of July 31, 2026. The breadth of this portfolio enables the Company to serve diverse end-use industries including industrial equipment, off-highway machinery, mining equipment, and defence applications.

Key customers include Godrej and Boyce, BEML Ltd, VE Commercial Vehicles, Sandvik Mining, Oilgear India, Conmat Heavy Industries, Phooltas Transrail, Hailstone Innovations, ARX Mining, and Venus Techno Equipment.

In FY2026, the Company served 185 customers in total, of whom 110 customers (representing 59.46% of the customer count and 90.26% of revenue) were repeat customers. The Company holds quality certifications including IATF 16949, ISO 9001, ISO 14001, and ISO 45001, all of which are relevant requirements for export-oriented customers in precision engineering industries.

The promoters of the Company are Mukesh Sangla, who has over four decades of experience in the torque-transmission components industry, and Saurabh Sangla, who brings more than 18 years of relevant operational experience. Mukesh Sangla HUF is a selling shareholder in the Offer for Sale component of the IPO. The financial year of the Company ends on March 31.

IPO BASICS

Document Type	The offer is based on a Red Herring Prospectus (RHP) filed by the Company in September 2026. This is a mainboard IPO listed on both BSE and NSE, making the issue accessible to Qualified Institutional Buyers (QIBs), Non-Institutional Investors (NIIs), and Retail Individual Investors (RIIs).
Issue Structure	The issue comprises a Fresh Issue of up to 9,897,000 equity shares, with the proceeds accruing to the Company for its stated deployment objects. Separately, an Offer for Sale (OFS) of up to 1,350,000 equity shares is being made by Mukesh Sangla HUF, with those proceeds going to the selling shareholder and not to the Company. The total issue size is up to 11,247,000 equity shares.
Face Value	Rs. 10 per equity share. The face value serves as the nominal base for all per-share computations in the RHP including the Weighted Average EPS.
Promoters	The promoters are Mukesh Sangla and Saurabh Sangla. Mukesh Sangla has been associated with the business for over four decades and is the founding figure of the enterprise. Saurabh Sangla has been actively involved for over 18 years. Mukesh Sangla HUF, a Hindu Undivided Family entity linked to the founder, is the selling shareholder in the OFS portion.
Listed Peers	Listed peer companies identified in the RHP for the Basis of Offer Price include Hindustan Hardy Ltd, Talbros Engineering Ltd, and GNA Axles Ltd. These companies operate in adjacent or overlapping segments of the automotive and industrial driveline components space.
Listing Exchange	BSE Limited and National Stock Exchange of India Limited (NSE). The shares will be listed on both exchanges, ensuring broad market access and price discovery.
BRLM	Choice Capital Advisors Private Limited is the sole Book Running Lead Manager appointed for this issue. They are responsible for managing the book building process and coordinating the issue timeline with SEBI and the exchanges.
Registrar	Bigshare Services Private Limited is the Registrar to the Issue, responsible for managing the application process, allotment, and refund procedures.
Bid/Issue Dates	Anchor Investor Bidding Date: September 22, 2026. IPO open date: September 23, 2026. IPO close date: September 25, 2026 (three working days open for public subscription).

The OFS component represents approximately 12% of the total issue size (1,350,000 out of 11,247,000 shares), which means the large majority of investor capital directed at this IPO flows into the Company rather than to existing shareholders.

This is a structurally positive feature from an investor perspective, as it signals that the primary motivation for the IPO is Company growth rather than promoter monetisation. The Fresh Issue proceeds are earmarked for capital expenditure and debt reduction at the subsidiary level as detailed in Section 3.

The appointment of Choice Capital Advisors as the sole BRLM reflects a mid-market positioning for this issue. Choice Capital Advisors is a SEBI-registered merchant banker with experience managing mainboard and SME IPOs.

Bigshare Services Private Limited is a well-established registrar with a track record across numerous public issues. The mainboard listing on both BSE and NSE ensures adequate trading liquidity and broader institutional investor access post-listing.

USE OF PROCEEDS

The net proceeds from the Fresh Issue are proposed to be deployed as follows. Proceeds from the Offer for Sale component are retained by the selling shareholder (Mukesh Sangla HUF) and do not flow to the Company.

Object of Issue	Amount (Rs. Lakhs)	Details and Rationale
Capital Expenditure at Dewas Facility	1,990.7	The Dewas Facility is the upstream manufacturing hub for the Company, performing forging operations, die-making, and heat treatment for the full production chain. The planned investment will expand production capacity at this facility, including procurement of additional forging machinery, furnaces, and tooling. The upgrade is designed to remove upstream bottlenecks that currently constrain the output of downstream machining and assembly operations at the Pithampur Facility, allowing the Company to scale revenue without being limited by raw material processing throughput.
Investment in ADPL for Pithampur Facility Capex	4,395.6	Adroit Driveshafts Private Limited (ADPL) is the wholly owned subsidiary of the Company and operates the Pithampur Facility, which handles the downstream machining, component finishing, and final assembly stages of production. This capital will be channelled as an investment into ADPL to fund equipment acquisition and infrastructure expansion at Pithampur. Given that the Pithampur Facility is responsible for the majority of the Companys consolidated revenue-generating operations, this allocation addresses the primary capacity constraint in the higher-value-add stages of the production chain. The investment will increase throughput at the final assembly and quality inspection stages.
Investment in ADPL for Loan Repayment	2,411.9	A separate tranche of the Fresh Issue proceeds will be invested into ADPL specifically to enable the subsidiary to repay its existing outstanding borrowings. Reducing debt at the ADPL level will lower the consolidated interest outflow, improve ADPL's free cash flow generation, and reduce the subsidiary's debt servicing obligations. The benefit flows through to the consolidated balance sheet: the Debt-to-Equity ratio at the consolidated level has already improved from 0.94x in FY2024 to 0.41x in FY2026, and this repayment will reduce it further in the near term post-listing.
General Corporate Purposes	Balance (up to 25% of gross proceeds)	The residual balance of the Fresh Issue proceeds will be applied toward general corporate purposes, subject to SEBI's regulatory cap of 25% of gross issue proceeds. This tranche covers incremental working capital requirements, administrative expenses, statutory payments, and unspecified business needs that arise in the ordinary course of operations. The exact amount allocated here will depend on the final issue price discovered through the book-building process.

The allocation of IPO proceeds reflects a balanced growth and balance sheet optimisation strategy. Approximately 70% of the named deployment goes toward capital expenditure (combined Dewas and Pithampur capacity additions), and approximately 27% goes toward debt reduction at the subsidiary level.

This structure means the IPO simultaneously adds operational capacity and reduces financial leverage, which is a favourable combination for a manufacturing company with export-oriented revenues.

The choice to channel the subsidiary capex and loan repayment through ADPL rather than directly reflects the legal structure: ADPL is the operating entity at the Pithampur location. Investors should note that ADPL is wholly owned by the Company, so all economic benefits ultimately flow to the listed entity.

The Dewas capex and Pithampur capex together represent a coordinated expansion of the two complementary halves of the production chain, ensuring that the upstream and downstream facilities scale together without creating new internal bottlenecks.

FINANCIAL PERFORMANCE (CONSOLIDATED)

Revenue and Profitability

Metric	FY2024	FY2025	FY2026	Trend
Total Revenue (Rs. Lakhs)	12,452.8	13,389.4	13,994.3	Growing
Revenue Growth (YoY %)		7.5%	4.5%	Steady
EBITDA (Rs. Lakhs)	2,968.5	3,101.9	3,871.0	Strong
EBITDA Margin (%)	23.84%	23.17%	27.66%	Expanding
PAT (Rs. Lakhs)	1,452.7	1,814.4	2,615.8	Strong
PAT Margin (%)	11.67%	13.55%	18.69%	Expanding
Basic EPS (Rs.)	4.16	5.19	7.48	Growing
Net Worth (Rs. Lakhs)	8,782.2	10,350.3	12,862.7	Growing
NAV per Share (Rs.)	25.16	29.65	36.84	Growing
RoNW (%)	18.95%	18.94%	22.51%	Improving
RoCE (%)	15.07%	15.76%	19.01%	Improving
Weighted Average EPS (Rs.)			6.16	RHP figure

Revenue grew from Rs. 12,452.8 Lakhs in FY2024 to Rs. 13,994.3 Lakhs in FY2026, a CAGR of approximately 6.0% over the two-year period. While the revenue growth rate is moderate in absolute terms, the profitability expansion during this period is markedly stronger.

PAT grew from Rs. 1,452.7 Lakhs to Rs. 2,615.8 Lakhs, representing a CAGR of approximately 34.2% over the same period. The PAT margin expanded from 11.67% in FY2024 to 18.69% in FY2026, a gain of 702 basis points. EBITDA margin similarly improved from 23.84% to 27.66%, a gain of 382 basis points.

This divergence between moderate revenue growth and strong margin expansion suggests meaningful operating leverage and cost discipline improvements over the period.

The return metrics reflect a well-run manufacturing business. RoNW rose from 18.95% in FY2024 to 22.51% in FY2026, and RoCE improved from 15.07% to 19.01% over the same period. Both ratios are healthy for a capital-intensive manufacturing company. The Debt-to-Equity ratio declined sharply from 0.94x in FY2024 to 0.41x in FY2026, reflecting active debt repayment and profit-driven equity accretion.

The Weighted Average EPS for the purposes of the RHP Basis for Offer Price is disclosed as Rs. 6.16 per share. Customer quality is reflected in the repeat business metric: 90.26% of FY2026 revenue came from repeat customers.

Balance Sheet and Leverage

Metric	FY2024	FY2025	FY2026
Net Worth (Rs. Lakhs)	8,782.2	10,350.3	12,862.7
Total Borrowings (est., Rs. Lakhs)	8,255.3	6,520.7	5,273.7
Debt to Equity Ratio (x)	0.94	0.63	0.41
Current Ratio (x)	N/A	N/A	1.53

The balance sheet reflects a steadily improving financial position. Net Worth grew from Rs. 8,782.2 Lakhs in FY2024 to Rs. 12,862.7 Lakhs in FY2026, driven entirely by retained earnings accumulation rather than any equity dilution during this period. Total borrowings (estimated from the disclosed Debt-to-Equity ratios) declined from approximately Rs. 8,255 Lakhs in FY2024 to approximately Rs. 5,274 Lakhs in FY2026.

This represents a reduction of approximately Rs. 2,981 Lakhs over two years, reflecting strong operating cash flows being channelled into debt repayment. The Current Ratio of 1.53x as of FY2026 indicates adequate short-term liquidity to meet current obligations. Post-IPO, the additional proceeds designated for loan repayment at ADPL will further reduce the consolidated debt burden.

PEER COMPARISON

Company	Revenue FY2026 (Rs. Lakhs)	EPS (Rs.)	NAV per Share (Rs.)	P/E (x)
Adroit Industries (India) Ltd (Issuer)	13,994.3	7.48	36.84	N/A (Pre-listing)
Hindustan Hardy Ltd	10,879.0	55.92	250.24	12.98x
Talbros Engineering Ltd	53,575.8	57.34	359.20	10.70x
GNA Axles Ltd	1,47,841.8	27.24	233.89	20.85x

Peer data is sourced from the Basis for Offer Price section of the RHP as of the reference date stated therein. Market price and P/E are not applicable for Adroit Industries as the Company is pre-listing at the time of this analysis. The industry P/E range among identified peers is 10.70x (Talbros Engineering) to 20.85x (GNA Axles), with an average of approximately 15.78x.

Adroit Industries is significantly smaller in revenue scale compared to Talbros Engineering (Rs. 53,575.8 Lakhs) and GNA Axles (Rs. 1,47,841.8 Lakhs), and is closest to Hindustan Hardy Ltd (Rs. 10,879.0 Lakhs) in size.

However, Adroit Industries reported the highest EBITDA margin (27.66%) and PAT margin (18.69%) among all listed peers in FY2026, suggesting a premium-quality niche rather than a commoditised large-volume business.

The NAV per share of Rs. 36.84 is the lowest among all listed peers, which is partly a function of the Company being relatively smaller, but it also means the shares are not trading at a significant premium to book value at the time of the issue, providing some downside protection on a book value basis.

Investors should note that peer comparison in this sector is limited by the fact that Adroit Industries' product specialisation (propeller shafts and driveline components for industrial, off-highway, and defence sectors) is not an exact match with all listed peers, some of whom serve primarily the passenger vehicle market.

KEY RISKS

Export and US Tariff Concentration.  95.39% of the Companys revenue in FY2026 was generated from exports outside India, and the United States alone accounted for 53.76% of total export revenue.

A 25% Section 232 tariff on steel and aluminium products is applicable to US exports, creating direct pricing and demand risk. Any escalation of US trade tariffs, deterioration in bilateral trade relations, or loss of US-based customers would have a disproportionate impact on the Companys revenues and profitability. This is the single largest macro risk for the business.

Absence of a Formal Hedging Policy.  The Company generates over 95% of its revenues in foreign currencies (predominantly US Dollars and Euros) but does not maintain a formal hedging policy for foreign currency receivables.

This creates direct mark-to-market risk on outstanding receivables and potential mismatch between realised revenue and the revenue recognised at invoice date.

A significant appreciation of the Indian Rupee against the US Dollar or Euro could erode reported revenue and profitability without any operational deterioration. This risk is amplified by the very high proportion of export revenues.

Regulatory Non-Compliances.  The RHP discloses 46 instances of delayed filings with the Registrar of Companies, with delays in some cases extending up to 3,771 days.

Additionally, there are pending compounding applications with the Reserve Bank of India related to procedural lapses involving the Companys Canadian subsidiary.

These disclosures indicate historical governance gaps. While the Company is seeking to regularise these matters, potential penalties, regulatory attention, or adverse reputational impact cannot be ruled out, and investors should factor this into their assessment of management quality.

Customer Concentration.  The top 10 customers contributed approximately 60.86% of total revenue in FY2026. The Company does not have long-term supply agreements in place with most of its customers, making revenues susceptible to loss or reduction of orders from any major account.

While the 90.26% repeat customer revenue metric provides some comfort on retention, the absence of contractual commitments means the revenue base is not secured beyond the current order horizon.

Single-State Manufacturing Concentration.  All three manufacturing facilities (Dewas, Pithampur, and Sanwer) are located within the state of Madhya Pradesh. Any state-specific disruption including natural calamity, regulatory change, power grid disruptions, or labour unrest would affect the entire manufacturing capacity of the Company simultaneously. There is no geographic diversification within the production infrastructure.

Dependence on Wholly Owned Subsidiary ADPL.  The Pithampur Facility, which accounts for the majority of consolidated revenue-generating operations, is operated through the wholly owned subsidiary Adroit Driveshafts Private Limited (ADPL).

The Company is therefore dependent on the financial health and operational continuity of ADPL. Any adverse event at the subsidiary level including legal disputes, labour issues, or regulatory action specifically against ADPL could materially impair consolidated financial performance and the listed parent entity's ability to service obligations.

Capex Execution Risk.  A significant portion of the IPO proceeds is earmarked for capital expenditure at both the Dewas and Pithampur Facilities. Manufacturing capex programmes carry inherent risks of cost overrun, timeline delay, and underperformance against projected capacity additions.

The planned capacity expansion has not yet been deployed, and there is no guarantee that the new capacity will be utilised at projected levels once commissioned.

KEY POSITIVES

Highest Profitability Among Identified Peers.  Adroit Industries reported an EBITDA margin of 27.66% and a PAT margin of 18.69% in FY2026, which are the highest among all listed peers cited in the RHP. The divergence between Adroit's margins and those of larger-scale peers like GNA Axles (with revenues approximately 10 times larger) suggests that scale alone does not explain profitability in this sector. Adroit's premium margins likely reflect a combination of product complexity, export pricing, and efficient cost control.

High Revenue Repeatability and Customer Quality.  90.26% of FY2026 revenue was generated from repeat customers, and the customer base includes well-established industrial names such as Godrej and Boyce, BEML Ltd, Sandvik Mining, and VE Commercial Vehicles.

High repeat revenue rates in industrial components typically signal product approval and qualification status, which takes time and is not easily displaced by competitors. This structural stickiness provides a degree of revenue predictability.

Vertically Integrated Manufacturing Model.  End-to-end manufacturing from upstream forging and die-making at the Dewas Facility through downstream machining and assembly at Pithampur provides quality control across the full production cycle.

Vertical integration reduces dependence on third-party component suppliers, provides cost advantages on raw material conversion, and enables the Company to offer customised driveline solutions to customers with specialised application requirements.

Broad Export Reach Across 32 Countries.  The Company exports to more than 32 countries across North America, Europe, Latin America, the Middle East, Africa, and Asia-Pacific.

While the current concentration in the United States represents a risk (as noted in Section 6), the breadth of the geographic presence provides a foundation for diversification over time.

The multi-market export infrastructure, including relationships, certifications, and logistics arrangements, is a tangible strategic asset.

Extensive Product Portfolio with Over 5,000 SKUs.  The Company manufactures over 5,000 SKUs of torque-transmission driveline components. This breadth of portfolio allows it to serve a wide range of industrial and off-highway applications without requiring customers to source from multiple suppliers.

For buyers, single-source capability for diverse driveline specifications is a procurement convenience that supports customer retention and pricing power.

Strengthening Balance Sheet with Declining Leverage.  The Debt-to-Equity ratio improved from 0.94x in FY2024 to 0.41x in FY2026, reflecting active debt repayment funded by strong operating cash flows.

Post-IPO, the additional deployment of proceeds toward ADPL loan repayment will reduce leverage further. A low-leverage balance sheet positions the Company well for the planned capex cycle without excessive financial risk.

Quality Certifications Supporting Export Credibility.  The Company holds IATF 16949 (automotive quality management), ISO 9001 (quality management), ISO 14001 (environmental management), and ISO 45001 (occupational health and safety) certifications.

IATF 16949 in particular is a mandatory requirement for supplying to the global automotive and industrial driveline supply chain. These certifications validate manufacturing process quality and are a prerequisite for accessing many export markets and large industrial customers.

DISCLAIMER

This report is prepared for informational purposes only and is based on the Red Herring Prospectus filed by Adroit Industries (India) Limited. It does not constitute investment advice or a recommendation to subscribe to the IPO. Investors are strongly advised to read the full RHP carefully, consider their own risk appetite and investment objectives, and consult a registered financial adviser before making any investment decision.