Online Instruments (India) Limited IPO DHRP Analysis

STATUS: DRHP Filed  |  Price Band and IPO Dates Not Yet Announced  |  Proforma Financials Include Recent US Acquisition

Online Instruments (India) Limited is a Bengaluru based audio visual technology company incorporated in 2006 and converted to a public limited company in January 2026. With over 20 years of operating history, it is one of India's most established players in the Pro AV (Professional Audio Visual) industry, operating across four distinct business lines.

Audio Visual Systems Integration (AVSI) is the core and oldest business, contributing 65 to 73 percent of revenues. AVSI involves designing, engineering, installing, and maintaining integrated AV systems in corporate boardrooms, command and control centres, educational institutions, auditoriums, hotels, airports, and government facilities.

The company does not just supply equipment  it designs the full environment, installs it, and manages annual maintenance contracts. Think of it as the firm that turns an empty conference room or a government control centre into a fully functioning AV ecosystem.

AV Products is the second line, contributing 21 to 29 percent of revenues. The company distributes and manufactures AV hardware including Interactive Flat Panel Displays (IFPDs) under its own brand LOGIC, digital signage boards, and educational tablets. In a significant first for India, the company has established India's first Completely Knocked Down (CKD) manufacturing facility for IFPDs, assembling display units from imported kits at its Bangalore facility.

This makes it a beneficiary of India's Make in India policy and the graded import duty structure that incentivises domestic assembly (20 percent Basic Customs Duty on fully built IFPDs versus 5 percent on open cells used in local assembly).

Electronics Manufacturing Services (EMS) is a new segment commenced in February 2026. The company now manufactures AV accessories and lighting products for third party OEM brands from its manufacturing facilities. This segment contributed ₹14.94 crore in just the first few months of operation and represents a future growth optionality.

Commercial Lighting is a smaller segment (2 to 3 percent of revenues) providing LED and other lighting solutions, typically bundled alongside AV projects for institutional clients.

International expansion: In FY2026, the company made its first significant overseas acquisition, buying Level 3 Audio Visual LLC, a US based AV systems integrator, for ₹115.39 crore. This gives Online Instruments a direct foothold in the United States, the world's largest Pro AV market.

The proforma financials in the DRHP consolidate this acquisition as if it were part of the group throughout the historical periods. The company also has subsidiaries in Singapore and the UAE (Dubai) through Online Instruments Singapore Pte. Ltd. and Online Instruments DWC LLC.

Key Basics

Detail	Information
Fresh Issue	Up to ₹750 crore  this money comes INTO the company
Offer for Sale (OFS)	Up to 57,10,000 equity shares of ₹2 face value  money goes to selling shareholders, not the company
Selling Shareholders	Anita Mahesh Bellad (29,10,000 shares) and Rajeshwari Shivanand Mahashetti (28,00,000 shares)  both at weighted average acquisition cost of ₹0.01 per share
Pre IPO Placement (possible)	Up to ₹150 crore may be placed privately before IPO; if done, Fresh Issue size reduces by that amount
Face Value per Share	₹2 per equity share
Total Pre IPO Shares	7,42,50,000 equity shares  100% held by promoters
Employee Reservation	Reserved portion for eligible employees  quantum to be decided; discount on offer price may be offered
Listing Exchanges	BSE and NSE
Book Running Lead Managers	Equirus Capital Limited  |  Motilal Oswal Investment Advisors Limited
Registrar	MUFG Intime India Private Limited (formerly Link Intime India Private Limited)
Price Band	Not yet announced
IPO Open and Close Dates	Not yet announced

Important note on OFS: Both selling shareholders acquired their shares at ₹0.01 per share (effectively zero cost). At any IPO price, they will realise extraordinary gains on the OFS portion. This is not unusual in early stage conversions, but investors should note that the company itself gets nothing from the OFS shares.

How Will the IPO Money Be Used?

The Fresh Issue of up to ₹750 crore is proposed to be deployed across three buckets. None of the objects have been appraised by any bank or financial institution.

Object	Amount (₹ crore)	Note
Repayment or pre payment of outstanding borrowings	160.00	Targeted at HDFC Bank cash credit and Kotak Mahindra Bank facilities. Outstanding borrowings as of Feb 28, 2026 were ₹210.11 crore.
Funding incremental working capital requirements	330.00	Split: ₹217.80 crore in FY2027 and ₹112.20 crore in FY2028. Driven by growth in AVSI and EMS business.
Funding inorganic growth through unidentified acquisitions and General Corporate Purposes	(max 35% of gross proceeds)	No acquisition targets identified yet. Company has authority to use up to 25% of gross proceeds for acquisitions and remaining for GCP.

Key observation: ₹490 crore (65 percent of the maximum Fresh Issue size) has defined end uses in debt repayment and working capital. The remaining up to 35 percent is a catch all bucket for unidentified acquisitions and general corporate purposes.

Investors should note that the largest share of identified proceeds is going into working capital, which is a reflection of the capital intensive, long receivable cycle nature of the AVSI business. The company had net working capital days of 73 to 93 days in FY2025. AVSI projects often involve large upfront procurement with payment collected over the project lifecycle.

Financial Performance

An important distinction: This DRHP presents two sets of financials. Restated Consolidated Financials cover the company as it legally existed up to each reporting date (i.e., Level 3 Audio Visual LLC only appears from the date of acquisition in FY2026). Proforma Consolidated Financials restate all periods as if Level 3 had always been part of the group, to give investors a combined picture. Both are discussed below. All figures are in ₹ crore.

Revenue from Operations

Revenue on a restated standalone basis has grown steadily from ₹335.94 crore (FY2023) to ₹379.06 crore (FY2024) to ₹547.43 crore (FY2025), a compound annual growth rate of approximately 27.6 percent. In the nine months ended December 2025, revenue was ₹466.17 crore, implying an annualised run rate of approximately ₹621.56 crore.

The proforma revenues, which include the US subsidiary, are substantially larger: ₹862.59 crore in FY2025 and ₹783.56 crore for 9M FY2026 on an annualised basis of approximately ₹1,044.74 crore. This nearly doubles the scale of the business in presentation terms, but investors should keep in mind that the US acquisition only completed in FY2026.

Profitability (EBITDA and PAT)

Period	Revenue (₹ cr.)	EBITDA (₹ cr.)	EBITDA Margin	PAT (₹ cr.)	PAT Margin
FY2023	335.94	22.60	6.73%	15.52	4.59%
FY2024	379.06	33.42	8.82%	23.06	6.06%
FY2025	547.43	55.32	10.10%	35.33	6.42%
9M FY2026 (Apr to Dec 2025)	466.17	33.39	7.16%	14.58	3.11%

EBITDA margins have improved from 6.73 percent in FY2023 to 10.10 percent in FY2025 as the business has scaled and operating leverage has kicked in. However, margins compressed significantly in 9M FY2026 to 7.16 percent.

The company attributes this to the costs associated with setting up new manufacturing capabilities (EMS and IFPD production), higher employee costs as headcount was built up, and integration costs from the Level 3 acquisition.

PAT margin at 3.11 percent for 9M FY2026 is the lowest in the series. This is a watchpoint for investors  the Q4 FY2026 results and FY2027 full year will be crucial to see if margin recovery materialises.

Revenue by Business Segment (Restated)

Segment	FY2023 (₹ cr.)	FY2024 (₹ cr.)	FY2025 (₹ cr.)	9M FY2026 (₹ cr.)
AVSI (Audio Visual Systems Integration)	228.79	255.52	356.22	339.20
AV Products (IFPD, Digital Signage, Tablets)	97.94	110.18	174.66	99.60
EMS (Electronics Manufacturing Services)	NIL	NIL	NIL	14.94
Commercial Lighting	9.21	13.37	16.55	12.43

AVSI remains the dominant segment at 65 to 73 percent of revenues. AV Products saw a dip in 9M FY2026 (₹99.60 crore) relative to the full FY2025 (₹174.66 crore), partly due to the transition to in house manufacturing which adds complexity to the revenue recognition cycle. EMS is brand new and early stage.

Key Financial Ratios and Returns

Return on Equity (RoNW) has improved from 17.94 percent (FY2023) to 21.07 percent (FY2024) to 24.43 percent (FY2025). Return on Capital Employed was 27.54 percent in FY2025, among the higher ratios in the IT services and AV integration peer group. Basic EPS grew from ₹2.09 (FY2023) to ₹3.11 (FY2024) to ₹4.76 (FY2025). The weighted average EPS for basis of pricing is ₹3.76.

Net Debt has increased sharply: ₹35.98 crore (FY2025) to ₹187.58 crore (9M FY2026). This reflects the ₹115.39 crore acquisition of Level 3 Audio Visual LLC, which was debt funded. Net Debt to Equity ratio jumped from 0.25x to 1.18x in the same period.

The IPO proceeds of ₹160 crore earmarked for debt repayment will bring this ratio back down significantly post listing. Net Working Capital Days of 73 to 93 days reflect the project billing cycle nature of the AVSI business.

Cash Flow and Balance Sheet

Trade receivables stood at ₹197.35 crore as of December 31, 2025. Total borrowings were ₹209.56 crore. The balance sheet is moderately leveraged. Cash and cash equivalents were ₹20.74 crore. The company does not disclose operating cash flow data separately in the KPI summary  investors should review the full financial statements in the DRHP for cash flow analysis.

Material margins (revenue minus direct material costs) have been improving: 20.26 percent (FY2023), 23.81 percent (FY2024), 24.41 percent (FY2025), and 24.94 percent (9M FY2026)  indicating that the underlying economics of the business are getting stronger even as near term EBITDA margins are under pressure from investment in new capabilities.

The Level 3 Acquisition 

This is an important section for investors to understand before comparing numbers. In FY2026, Online Instruments acquired Level 3 Audio Visual LLC in the United States for ₹115.39 crore.

Level 3 is a US AV systems integrator that adds international revenue and scale. The DRHP includes a separate set of Proforma Consolidated Financials that restates historical periods as if Level 3 had always been part of the group.

Metric	FY2023 Proforma	FY2024 Proforma	FY2025 Proforma	9M FY2026 Proforma
Revenue (₹ crore)	622.68	596.62	862.59	783.56
RoNW (%)	N/A	N/A	30.17%	N/A
EPS (₹)	N/A	N/A	5.75	N/A

The proforma revenue picture shows Online Instruments as a ₹860 to ₹1,000 crore revenue business on a combined basis. However, the US business (Level 3) did not grow between FY2023 and FY2024 on a proforma basis (revenue actually declined from ₹622.68 crore to ₹596.62 crore), which is a concern.

Growth recovered strongly in FY2025. The US market is significantly larger and adds geographic diversification, but integration risk is real and the DRHP acknowledges this.

How Does It Compare to Peers?

The DRHP identifies four listed peers. The most comparable by size and business model is Orient Technologies Limited. Black Box Limited is an IT infrastructure and AV services company. Dixon Technologies and LG Electronics India are electronics manufacturers operating at a much larger scale.

Company	Revenue FY25 (₹ cr.)	EPS (₹)	P/E (Apr 2026)	RoNW (%)	NAV/Share
Online Instruments (Restated)	547.43	4.76	N.A. (unlisted)	24.43%	₹19.47
Online Instruments (Proforma)	862.59	5.75	N.A. (unlisted)	30.17%	₹19.04
Black Box Limited	5,966.91	12.16	52.88x	26.99%	₹44.80
Orient Technologies Limited	839.53	12.85	21.28x	15.30%	₹83.97
Dixon Technologies (India) Limited	38,860.10	205.70	55.17x	36.39%	₹570.20

The most relevant comparison is Orient Technologies (similar revenue scale, IT infrastructure and AV solutions, listed). It trades at 21.28x P/E. Online Instruments' restated EPS for FY2025 is ₹4.76 and proforma EPS is ₹5.75.

At Orient Technologies' peer multiple of 21.28x, the implied price range would be approximately ₹101 to ₹122 per share. Black Box trades at 52.88x, suggesting a higher ceiling if the market views Online Instruments as a higher growth story. The actual price band, when announced, should be benchmarked against these multiples.

Key Risks to Know Before Applying

• Significant margin compression in 9M FY2026: EBITDA margin fell from 10.10 percent (FY2025) to 7.16 percent (9M FY2026) and PAT margin dropped from 6.42 percent to 3.11 percent. The company is in investment mode: new manufacturing lines, IFPD CKD production, EMS setup, and Level 3 integration are all generating costs ahead of revenue. If this recovery does not materialise in FY2027, the valuation case weakens materially.

• Debt funded US acquisition and rising leverage: The Level 3 Audio Visual LLC acquisition was funded through borrowings, causing Net Debt to jump from ₹35.98 crore to ₹187.58 crore and Net Debt to Equity ratio to spike from 0.25x to 1.18x in nine months. While IPO proceeds will address ₹160 crore of this, the integration of a US business comes with execution risk, cultural risk, and currency risk (USD INR exposure).

• Inorganic acquisition object with no identified targets: Up to 25 percent of the gross IPO proceeds (potentially ₹187.50 crore) is earmarked for unidentified acquisitions. This is a standard SEBI allowed structure but means investors are giving the company a blank cheque for M and A activity whose targets, returns, and risks are unknown. The only prior acquisition (Level 3) was debt funded and is yet to demonstrate its full contribution.

• AVSI is a project based business with lumpy revenues: AV systems integration involves large, multi month projects. Revenues are recognised as projects are completed, creating quarter to quarter variability. A delay in a major project or a slowdown in government capital expenditure (a key customer category) can cause significant revenue timing issues. Net working capital days of 73 to 93 days reflect this project billing cycle.

• Customer concentration and dependence on government projects: A significant portion of AVSI revenue comes from large enterprises and government institutions. Budget freezes, tender delays, and policy changes in government digital infrastructure spending could materially affect order inflows. The DRHP does not disclose the specific share of revenue from government clients but this risk is flagged as material.

• Pending material regulatory approvals for new facilities: As of the DRHP date, fire NOC for the AV Accessories and Lighting Products facility has not been received (application filed March 24, 2026). Factory licence for the powder coating facility has not even been applied for. Professional tax registration for the Mumbai branch office is also pending. Operating new manufacturing lines without all regulatory clearances is a compliance risk.

• Import dependence for key components: IFPD panels, LED modules, and AV electronics components are primarily sourced from China, South Korea, and Taiwan. Any tariff hike, supply chain disruption, or INR depreciation directly raises input costs. The company has limited ability to hedge component cost fluctuations.

• No long term volume agreements with key customers: AVSI projects are executed on purchase order basis without long term supply commitments. Repeat business depends on relationships and project quality, not contractual entitlement. Three customers accounted for a significant portion of trade receivables as of December 2025 (the company flags concentration risk).

• LOGIC brand IFPD competing in an intensely competitive market: The IFPD market in India features LG, BenQ, Samsung, and numerous Chinese brands. Online Instruments is manufacturing under its own LOGIC brand through CKD assembly. Building brand equity and distribution for hardware against established global players is capital intensive and uncertain.

• Rising trade receivables: Trade receivables were ₹197.35 crore as of December 31, 2025 versus FY2025 revenues of ₹547.43 crore, implying approximately 131 days of receivables outstanding. While this is partially explained by the long project billing cycle, it also reflects credit risk from customers. Allowances for doubtful receivables were ₹2.53 crore in FY2025 (0.46 percent of revenue).

• Fund use not appraised by any bank or financial institution: All three Objects of the Fresh Issue are based on internal management estimates without independent appraisal. There is no third party validation that ₹330 crore of working capital is the right amount or that it will be deployed efficiently.

• EMS business is entirely new and unproven: Electronics Manufacturing Services started in February 2026. It contributed only ₹14.94 crore in 9M FY2026. The company is now a manufacturer as well as an integrator, which requires different operational capabilities, quality systems, and customer relationships. Execution capability in this new vertical is yet to be demonstrated at scale.

Positives to Note

• Over 20 years of AVSI operating history: Established in 2006, the company has built genuine domain depth in a specialised industry. Long standing client relationships, technical expertise, and project delivery track record are real competitive moats in the AV integration business.

• India's first IFPD CKD manufacturing facility: This is a first mover advantage in a market that is growing at 15 plus percent annually (Indian IFPD market expected to grow from ₹2,710 crore in FY2025 to ₹8,180 crore by FY2030). The graded duty structure (20 percent BCD on fully built IFPDs versus 5 percent on CKD kits) gives domestic manufacturers a structural cost advantage.

• Strong return ratios: RoNW of 24.43 percent and ROCE of 27.54 percent (FY2025) are excellent for an integration and distribution business. These ratios comfortably exceed the listed peer Orient Technologies (15.30 percent RoNW).

• Revenue growing at 27 to 44 percent annually: FY2025 revenue grew 44.4 percent over FY2024 on a restated basis. This growth is broad based across AVSI and AV Products. The Indian Pro AV market is itself growing at 10.7 percent CAGR through FY2030, and Online Instruments is growing much faster than the market.

• US foothold through Level 3 acquisition: The US Pro AV market is worth US$77 billion (growing to US$99.1 billion by 2030). Level 3 gives Online Instruments a direct sales presence in the world's largest AV market, enabling it to pursue hardware export opportunities for LOGIC branded products and cross sell AVSI capabilities.

• Improving material margins: Material margin (a key driver of profitability in an integration business) has improved from 20.26 percent (FY2023) to 24.94 percent (9M FY2026), reflecting better procurement, mix shift, and growing services component of revenues.

• Government tailwinds: Digital India, Smart Cities, NEP 2020: Government programmes including Digital India, Smart Cities Mission, PM eVIDYA, PM SHRI, and DIKSHA are all structural drivers of IFPD, digital signage, and AV systems demand in government institutions. Online Instruments is a direct beneficiary of this multi year spending cycle.

• Fresh Issue dominant at ₹750 crore: The majority of this IPO raises real capital for the company. Unlike a pure OFS, genuine growth and deleveraging potential exists from the proceeds.

Online Instruments (India) Limited is a genuine business with 20 years of AVSI operating history, strong return ratios, and an exciting optionality in IFPD manufacturing and the US market.

However, it is currently in a heavy investment phase where margins have compressed, a significant acquisition has been made with debt, and new business lines (EMS, IFPD manufacturing, US operations) are yet to demonstrate full operating leverage. The IPO is raising real capital for genuine business purposes, which is a positive.

The key risk is valuation  if priced at Orient Technologies multiples (21x P/E), the risk reward is reasonable. If priced at premium electronics manufacturing multiples (50 to 55x), investors are paying for a future that is yet to arrive. The price band announcement will be the deciding factor. For investors with a 2 to 3 year horizon and tolerance for near term margin volatility, this is a credible India B2B tech infrastructure play.