Company Overview

Adroit Industries (India) Limited is a vertically integrated manufacturer and supplier of propeller shafts and torque-transmission components with over four decades of operational experience. The company offers over 5,000 SKUs serving automotive (74.54% of revenue) and non-automotive applications including defense, emergency services, and industrial machinery. Operations are conducted through vertically integrated facilities in Madhya Pradesh with upstream operations (forging, heat treatment) at Dewas Facility and downstream operations (machining, assembly, balancing) at Pithampur Facility through material subsidiary Adroit Driveshafts Private Limited. The company holds IATF 16949, ISO 9001, ISO 14001, and ISO 45001 certifications and employs 367 personnel as of July 31, 2026.

Offer Details

The company launches an Initial Public Offering (IPO) of 11,247,000 Equity Shares of face value ₹10 each at ₹134 per share, aggregating ₹1,507.10 million. The offer comprises a fresh issue of 9,897,000 shares (₹1,326.20 million) and an offer for sale of 1,350,000 shares by Mukesh Sangla HUF (₹180.90 million). The price band was set at ₹126-134 per share. The offer structure includes 50% reservation for QIBs, 15% for non-institutional investors, and 35% for retail investors, with anchor investor allocation of up to 60% of QIB portion. Listing is planned on both BSE and NSE exchanges.

Financial Performance

The company has demonstrated consistent financial growth with revenue increasing from ₹1,245.28 million in Fiscal 2024 to ₹1,399.43 million in Fiscal 2026, representing a 4.52% growth in the latest fiscal. Profitability has improved significantly with EBITDA growing from ₹296.85 million to ₹387.10 million and PAT increasing from ₹145.27 million to ₹261.58 million over the same period. EBITDA margin expanded to 27.66% in Fiscal 2026 from 23.84% in Fiscal 2024, while PAT margin improved to 18.69% from 11.67%. Return on Net Worth reached 22.51% in Fiscal 2026, up from 18.95% in Fiscal 2024. The company maintains a healthy capital structure with debt/equity ratio of 0.41 and current ratio of 1.53 as of Fiscal 2026.

Use of Proceeds

Net proceeds from the fresh issue will be utilized for: (1) Funding capital expenditure for capacity expansion and modernization (₹681.37 million), including ₹439.56 million investment in subsidiary ADPL and ₹241.83 million for Dewas Facility; (2) Repayment/prepayment of certain borrowings (₹241.19 million); and (3) General corporate purposes (₹403.64 million). The capacity expansion aims to address growing demand and enhance operational efficiency across manufacturing facilities.

Risk Factors

Business Risks: Significant export concentration with 95.39% of revenue from exports, primarily to the US market (53.76% of export sales). Customer concentration risk with top 10 customers contributing 60.86% of revenue. Dependence on distributor-led sales channels (62.45% of revenue). Manufacturing operations concentrated in Madhya Pradesh. Working capital intensive operations with inventory days of 135 and receivable days of 111. Raw material price volatility (steel bars and billets) and potential impact from EV adoption reducing demand for conventional propeller shafts.

Market Risks: Foreign exchange exposure with significant unhedged positions. Geopolitical tensions affecting global supply chains and trade routes. Currency exchange rate fluctuations impacting export competitiveness. Interest rate fluctuations affecting borrowing costs.

Regulatory Risks: Multiple instances of delayed statutory filings and compliance lapses in the past. Ongoing tax litigation with contingent liabilities of ₹43.92 million (₹38.94 million income tax demands and ₹4.98 million custom duty demands under appeal). Environmental compliance requirements for manufacturing operations. SEBI regulations for listed company compliance post-IPO.

Promoter Litigation: Several ongoing legal proceedings involving promoters including cheque dishonor cases, factory safety violations, excise duty disputes, construction payment disputes, and income tax penalty appeals.

Management & Corporate Governance

Promoters include Saurabh Sangla (Chairman and Managing Director, 18+ years experience), Mukesh Sangla (Non-Executive Director, 40+ years experience), Monika Sangla, and entities including Shubhangi Trust, Shreya Trust, and Swan Irrigation LLP. Pre-IPO promoter holding was 96.10%, reducing to 74.89% post-IPO. The board comprises five members including three independent directors with established committees for audit, nomination, remuneration, and stakeholder relationships. The company has adopted dividend distribution policy and complies with corporate governance requirements.

Market & Industry Context

The company operates in the global propeller shaft industry, which expanded from USD 22 billion in 2020 to an estimated USD 32 billion in 2026, forecasted to reach USD 39 billion by 2030 (6% CAGR). The Indian propeller shaft industry grew from approximately USD 1.6 billion in 2020 to around USD 2.3 billion in 2025. Growth drivers include rising vehicle demand, technological advancements, shift toward lightweight materials, growing adoption of AWD/4WD vehicles, and expansion of freight & heavy-duty segments. Key competitors include Hindustan Hardy Limited, GNA Axles Limited, and Talbros Engineering Limited.

Legal & Compliance Status

The company has received SEBI observation letter (August 7, 2026) and in-principle listing approvals from BSE and NSE (July 10, 2026). Material contracts include underwriting agreement with Choice Capital Advisors, registrar agreement with Bigshare Services, and various escrow agreements. The company has obtained all necessary environmental clearances from Madhya Pradesh Pollution Control Board and maintains required factory licenses, labor registrations, and tax compliances. No material frauds have been reported by statutory auditors in the last three fiscal years.