Company Overview
Adroit Industries (India) Limited is a vertically integrated manufacturer and supplier of propeller shafts and torque-transmission components with end-to-end capabilities across forging, precision machining, heat treatment, assembly, balancing and testing. The company operates three manufacturing facilities in Madhya Pradesh (Dewas, Pithampur, and Sanwer) and offers over 5,000 SKUs serving automotive (73.93% of revenue) and non-automotive applications. With 94.15% export revenue primarily to US markets (54.89% of exports), the company serves over 25 countries through distributors (64.21%), Tier-1 suppliers (32.70%), and direct OEM relationships.
Offer Details
IPO Structure: The Initial Public Offering comprises a Fresh Issue of up to 9,897,000 equity shares and an Offer for Sale of up to 1,350,000 shares by promoter group entity Mukesh Sangla HUF, aggregating up to ₹[●] million. The company meets SEBI ICDR eligibility criteria with net tangible assets of ₹1,034.45 million and average operating profit of ₹210.48 million for FY2023-2025.
Use of Proceeds: ₹890 million allocated for capacity expansion including ₹167.68 million for company capex (machinery and transportation vehicles), ₹369.64 million for subsidiary investment in capex, ₹202.68 million for subsidiary debt repayment, with remaining funds for general corporate purposes. Implementation scheduled through FY2028.
Financial Performance
Strong Growth Trajectory: The company demonstrated robust financial performance with revenue growing from ₹1,035.45 million in FY2023 to ₹1,338.94 million in FY2025, while PAT increased from ₹64.15 million to ₹181.44 million during the same period. For H1FY26, revenue stood at ₹692.31 million with PAT of ₹106.41 million. Profit margins improved significantly with PAT margin reaching 13.55% in FY2025 from 6.20% in FY2023.
Capital Structure: Pre-IPO capital consists of 34,911,340 equity shares fully held by promoters. Post-IPO, promoter holding will reduce to [●]% with net worth of ₹1,149.23 million as of September 2025.
Risk Factors
Business Risks: Significant export dependency (94.15% of revenue) exposes the company to foreign exchange fluctuations and geopolitical risks. Customer concentration is high with top 10 customers contributing 66.71% of revenue. Manufacturing operations are concentrated in Madhya Pradesh facilities, and the company faces intense competition from domestic and international manufacturers.
Market Risks: Transition to electric vehicles may reduce demand for conventional propeller shafts in passenger vehicle segment, though commercial/off-highway segments show slower EV penetration. Raw material price volatility and supply chain disruptions present additional challenges.
Regulatory Challenges: SEBI declined exemption application regarding Yashwant Sangla's promoter group classification. Material subsidiary Adroit Driveshafts faces ₹24.97 million income tax demand for AY 2023-24 (appeal filed). Additional disputed tax demands include ₹35.59 million in income tax and ₹4.98 million in custom duty appeals.
Management & Governance
Promoter Leadership: Saurabh Sangla (Chairman and MD) and Mukesh Sangla (Non-Executive Director) lead the promoter group with extensive industry experience. The board includes independent directors Surabhi Agrawal, Anirudha Chauhan, and Narendra Kumar Maheshwari.
Corporate Structure: The company has two subsidiaries - Adroit Driveshafts Private Limited (material subsidiary operating Pithampur Facility) and Adroit Driveshafts Canada Limited (for North American customer engagement).
Industry Context
Market Position: The global propeller shaft industry is projected to grow at 6% CAGR from USD 22 billion in 2020 to USD 39 billion by 2030. Indian market size reached approximately USD 2.1 billion in 2024. The company competes with listed peers including Hindustan Hardy Ltd, Talbros Engineering Ltd, and GNA Axles Ltd.
Growth Drivers: Industry growth is supported by rising vehicle demand, technological advancements, growing adoption of AWD/4WD vehicles, expansion of freight & heavy-duty segments, and growth in commercial infrastructure and construction.
Legal & Compliance
Regulatory Approvals: Company has obtained 'in-principle' approval from BSE and NSE for listing, various manufacturing licenses, environmental clearances, and maintains IATF 16949, ISO 9001, ISO 14001, and ISO 45001 certifications. SEBI observation letter pending final approval.
IPO Process: Book Building process with ASBA mandatory, anchor investor allocation permitted, and monitoring agency to be appointed for proceeds utilization. Choice Capital Advisors serves as BRLM with track record of managing 9 IPOs totaling ₹1,671.68 million between FY2023-2026.