Ravita Engineering Services IPO (14-16 October) Analysis

Ravita Engineering Services Limited is an engineering solutions company engaged in Engineering, Procurement, Installation and Commissioning (EPIC) of heating, ventilation and air conditioning systems, central air conditioning solutions, air flow systems, chiller plants, industrial compressors, cooling equipment and other related electromechanical equipment on a turnkey basis for commercial and industrial establishments, including offshore rigs and platforms.

The company also provides operation and maintenance services for projects it has executed as well as systems installed by third party solution providers.

The company organises its operations into three areas: Onshore, covering commercial establishments, hospitality units and industrial facilities across states such as Gujarat, Maharashtra, Odisha and Karnataka; Offshore, covering work at rigs, platforms and marine installations in Indian territorial waters, where the company has worked at 6 rigs and 16 associated offshore oil and gas platforms over the last three Fiscals and the quarter ended June 30, 2026; and Data Centre, comprising operation and maintenance of cooling systems and HVAC equipment for data centre facilities, including an ongoing engagement with Reliance Corporate IT Park Limited and recently secured work orders totalling Rs.12,000.00 Lakhs from a technology and cloud services subsidiary and a listed real estate developer.

The company is also executing a specialised project involving the laying of sub sea discharge pipelines for an effluent treatment plant at a crude oil import terminal operated by Numaligarh Refinery Limited in Paradip, Odisha. As at June 30, 2026, the company's order book across its three operating areas aggregated approximately Rs.49,112.12 Lakhs across 21 ongoing projects, and the workforce comprised over 399 employees.

A critical fact for prospective investors is that the present Promoters, led by Vibhoar Agrawal, acquired 100% of the shareholding and took over operations and control of the company only in February 2025. The bulk of the growth discussed in this article has therefore occurred under the current management's stewardship for a little over a year and a half, and the company's operating history under its present ownership and strategy is correspondingly short.

Key Basics

This is a fresh issue of 1,03,62,000 Equity Shares of face value Rs.5 each. There is no offer for sale component in this Issue.

Particulars	Details	Particulars	Details
Issue Type	Fresh Issue only	Face Value	Rs.5 per Equity Share
Fresh Issue	1,03,62,000 Equity Shares	Offer for Sale	Nil
Price Band	[TBD]	Lot Size	[TBD]
Bid or Offer Opens	[TBD]	Bid or Offer Closes	[TBD]
Listing At	BSE and NSE	RHP Date	October 6, 2026

Notably, the company issued Equity Shares in the twelve months preceding this Red Herring Prospectus at prices the RHP itself states may be lower than the eventual Issue Price, with a disclosed weighted average cost of acquisition of Rs.79.21 per share for primary issuances in the preceding eighteen months. Investors subscribing in this Issue should bear in mind that some existing shareholders hold shares acquired at a materially lower cost.

How Will the IPO Money Be Used?

The company intends to use the Net Proceeds of the Fresh Issue for the following objects, as approved by its Board of Directors.

Object	Estimated Amount (Rs. Lakhs)
To meet long term working capital requirements of the company	7,000.00
Funding capital expenditure requirements towards purchase of certain heavy equipment	2,552.92
General Corporate Purposes (capped at 15% of Gross Proceeds or Rs.1,000.00 Lakhs, whichever is lower)	[TBD]

The RHP discloses that these fund requirements and the proposed deployment schedule are based on management estimates and current business plans, and have not been independently appraised by any bank, financial institution or external agency. The company has also not entered into definitive arrangements with some vendors for the capital expenditure component, relying instead on third party quotations.

Financial Performance

Revenue, EBITDA and Profitability

All figures below are as disclosed in the RHP, already stated in Rs. Lakhs.

Particulars (Rs. Lakhs)	FY2026	FY2025	FY2024
Revenue from Operations	27,763.29	10,861.27	1,349.25
EBITDA	4,004.92	1,565.01	286.13
EBITDA Margin	14.43%	14.41%	21.21%
Profit After Tax (PAT)	2,804.16	1,182.70	150.80
PAT Margin	10.09%	10.82%	11.15%
Basic and Diluted EPS (Rs.)	11.05	5.85	0.75
Return on Net Worth (RoNW)	48.90%	128.31%	59.13%

Revenue grew more than twenty fold between FY2024 and FY2026, and PAT grew roughly nineteen fold over the same period. While this reflects genuine scaling of the business across its Onshore, Offshore and Data Centre segments, the growth is measured from a very small FY2024 base of just Rs.1,349.25 Lakhs in revenue, and almost entirely post dates the February 2025 change in promoters and management.

The exceptionally high and volatile RoNW figures, including 128.31% in FY2025, are also a function of the company's thin net worth base in the years before the current Promoters' capital infusion, rather than a figure investors should expect to persist.

Revenue mix has shifted across the three years: Onshore contributed 59.16% of revenue from operations in FY2026 compared with 15.10% in FY2024, while the Offshore and Data Centre segments have fluctuated as a share of the total depending on project timing.

Balance Sheet and Cash Flow

Particulars (Rs. Lakhs)	As at Jun 30, 2026	FY2026	FY2025	FY2024
Total Assets	20,734.29	16,296.83	5,823.73	907.83
Total Equity (Net Worth)	10,968.89	9,955.84	1,513.12	330.42
Trade Receivables	10,056.49	7,326.02	2,632.67	370.95
Total Debt	3,087.97	1,920.77	2,310.54	352.18
Debt to Equity Ratio	0.28	0.19	1.53	1.07
Net Asset Value per Share (Rs.)	40.15	36.44	NA	NA

Net cash flow from operating activities was negative in each of the quarter ended June 30, 2026, FY2026 and FY2025, at Rs.1,115.90 Lakhs, Rs.4,685.10 Lakhs and Rs.894.36 Lakhs of cash used, respectively, with only FY2024 showing a small positive operating cash flow of Rs.17.32 Lakhs.

This pattern reflects the company funding its rapid growth in trade receivables and inventories through financing activities, including short term borrowings and an equity infusion of Rs.5,638.56 Lakhs in FY2026, rather than through internally generated cash.

Trade receivables rose sharply, from Rs.370.95 Lakhs in FY2024 to Rs.10,056.49 Lakhs as at June 30, 2026, broadly in step with the scaling of the business, but a trend investors should monitor closely given the negative operating cash flow.

How Does It Compare to Peers?

The RHP states that there are no listed companies whose business operations are similar to Ravita Engineering Services Limited or that are of a comparable size, and accordingly no industry peer comparison in terms of P/E, EPS or other accounting ratios has been presented.

The company's Return on Net Worth and Net Asset Value per Share, set out in the financial performance section above, should therefore be read on a standalone basis rather than benchmarked against any disclosed peer set.

Key Risks

● Very recent change in ownership and management. The current Promoters, led by Vibhoar Agrawal, acquired 100% of the company's shareholding and took control only in February 2025. The RHP itself flags that this transition may lead to changes in business strategy and operational priorities, and that the limited track record of the current Promoters with the company may make it difficult for investors to evaluate their ability to manage and grow the business going forward. Nearly all of the growth presented in this article occurred after this change of control.

● High and rising customer concentration. Revenue from the top three clients was 61.81% of total revenue from operations in FY2026, and the top one client alone contributed 26.99%. Order book concentration has historically been even higher, with the top one client accounting for 95.76% of the order book in FY2024 and the top three clients accounting for 100% of the order book in both FY2024 and FY2025. Loss of any key client could materially affect revenue.

● Negative operating cash flow in three of the last four reporting periods. The company used Rs.4,685.10 Lakhs of cash in operating activities in FY2026 and Rs.894.36 Lakhs in FY2025, funding this gap chiefly through short term borrowings and a fresh equity infusion rather than internal accruals, a pattern that, if it continues, could strain the company's liquidity.

● Growth measured off an extremely small base. Revenue of Rs.1,349.25 Lakhs in FY2024 grew to Rs.27,763.29 Lakhs in FY2026. While this reflects real scaling, the rate of growth should not be extrapolated forward, and the RHP itself cautions that the order book and past order intake may not be representative of future results.

● Equity Shares issued in the preceding twelve months at a lower price than the Issue Price. The disclosed weighted average cost of acquisition for recent primary issuances is Rs.79.21 per share. Investors subscribing in this Issue may be paying a materially higher price than certain existing shareholders paid in the recent past.

● The company is unable to trace certain historical secretarial records and regulatory filings, including several forms dating back to Financial Year 2007 08 through Financial Year 2022 23, due to the age of the filings and non availability of legacy data, and has made an application to the Registrar of Companies for copies. There have also been delays, in one case running to 1,645 days, in filing certain statutory forms, for which additional fees have been paid.

● The proposed deployment of Net Proceeds, including the working capital and capital expenditure objects, has not been independently appraised by any bank, financial institution or other agency, and relies on management estimates and third party quotations.

● One company associated with the Promoter and Promoter Group, M.R. Foods Private Limited, is flagged in the RHP in connection with the Promoter Group's other business interests, which investors may wish to review for potential related party considerations.

● The company's operations are geographically concentrated in the western region of India, and a large portion of its work orders are secured through competitive bidding, exposing revenue to pricing pressure and bid outcomes outside its control.

● There have been instances of delay in payment of statutory dues and amounts outstanding to creditors in the past, as disclosed in the RHP's risk factors on statutory dues and creditor payments.

Positives to Note

● Diversified operating footprint across Onshore, Offshore and Data Centre segments, with a recently expanding presence in data centre cooling infrastructure, an area benefiting from the broader build out of data centre capacity in India, evidenced by Rs.12,000.00 Lakhs of fresh work orders secured from a technology and cloud services subsidiary and a listed real estate developer.

● Strong revenue and profit growth under the current ownership, with EBITDA margin holding in the 14% to 21% range across the periods presented despite the pace of scaling.

● Reasonable leverage position, with the Debt to Equity Ratio improving to 0.19 at the end of FY2026 from 1.53 at the end of FY2025, aided by the fresh equity infusion during the year.

● Established presence in the niche offshore marine fire protection and HVAC engineering space, having worked at 6 rigs and 16 associated offshore oil and gas platforms in Indian territorial waters over the last three Fiscals, a segment with meaningful entry barriers.