IPO Centre - New Issue Monitor
Driveline components maker
Adroit Industries is a vertically integrated manufacturer of propeller shafts, also known as drive shafts or cardan shafts, and other torque-transmission components used in driveline systems. Propeller shafts are mechanical power-transmission components that transfer rotational torque from the engine or transmission system to the differential, axle or other driven assemblies. They are designed to transfer the power to the wheels or machine so that it can move.
The product portfolio primarily comprises precision-machined torque-transmission components and complete propeller shaft assemblies. As of July 31, 2026, it offered 5,250 SKUs of torque-transmission components and assemblies. The company also manufactures forged components, which are mainly used as intermediate inputs for further machining and assembly within its own manufacturing operations. This vertical integration supports the production of precision-machined components and finished propeller shaft assemblies.
The company supplies its products through a network of distributors, Tier-1 driveline component suppliers and directly to OEMs, based on customer-specific technical specifications and requirements. The propeller shaft and driveline component industry typically follows a multi-tier supply chain, where Tier-1 suppliers source components and assemblies from specialized manufacturers and integrate them into complete driveline systems for supply to OEMs. Given the critical and safety-sensitive nature of propeller shafts, suppliers generally undergo stringent vendor qualification processes by Tier-1 suppliers and OEMs.
In FY26, distributors contributed 62.45% of revenue from sales of products, followed by Tier-1 driveline component suppliers at 32.86% and OEMs at 4.68%.
The company serves both automotive and non-automotive applications. Within the automotive segment, its products are primarily used in commercial vehicles, with a smaller presence in passenger vehicles, mainly SUVs. Its non-automotive applications include defence and emergency services, heavy equipment and off-highway machinery, industrial equipment and other torque-transmission applications.
In FY26, automotive applications accounted for 74.54% of revenue from sales of products, while non-automotive applications contributed the remaining 25.46%.
The company derives a significant portion of its revenue from exports and supplies products across North America, Europe, Latin America, the Middle East, Africa and Asia Pacific. In FY26, the company supplied products to more than 32 countries, including the US, Colombia, Canada, Australia, Mexico, Turkey, Peru and the UK. Its presence across multiple international markets provides geographic diversification and access to a broader customer base.
In FY26, exports contributed 95.39% to revenue, and domestic market 4.61%. The US accounted for 53.76% of export sales.
The global propeller shaft market grew from around USD 22 billion in 2020 to an estimated USD 32 billion in 2026 and is projected to reach USD 39 billion by 2030, implying a CAGR of around 6%. Growth is expected to be supported by demand from automotive, industrial, emergency services, off-highway and heavy equipment applications, which are expanding the overall application base.
To support its export operations in North America, the company incorporated Adroit Driveshafts Canada in March 2022. The Canadian subsidiary acts as a facilitation entity for customer engagement, coordination and after-sales support in Canada and other North American markets. In 2026, the company also incorporated Adroit Driveshafts USA LLC as a wholly owned subsidiary in the US, which is expected to support customer engagement and servicing of export customers in the region.
The company's customers include Godrej & Boyce Manufacturing Company, BEML, VE Commercial Vehicles, Sandvik Mining and Rock Technology India, Oilgear India, Conmat Heavy Industries, Phooltas Transrail, Hailstone Innovations, ARX Mining and Construction and Venus Techno Equipment, among others. The company maintains long-term relationships with a significant portion of its customer base. Customers associated with the company for more than three years contributed Rs 91.40 crore, Rs 93.51 crore and Rs 75.11 crore in FY26, FY25 and FY24, respectively, accounting for 71.91%, 77.15% and 67.98% of revenue from sales of products in the respective years.
Over the years, it has expanded its manufacturing capabilities, diversified its product portfolio and entered international markets, supported by capacity additions and backward integration.
The company operates three manufacturing facilities in Madhya Pradesh, located at Dewas Road in Indore, Pithampur in Dhar and Sanwer in Indore. The Dewas Facility is operated by the company, while the Pithampur Facility is operated through its subsidiary, Adroit Driveshafts. The facilities are vertically integrated, with different stages of manufacturing and value addition carried out across locations based on product specifications and operational requirements.
The Dewas facility handles upstream processes including die-making, forging, heat treatment and shot blasting. The forged components are mainly used internally and transferred to Pithampur for further processing, with some moving to Sanwer for finishing based on customer requirements. The Pithampur Facility undertakes machining, assembly and balancing propeller shafts and other torque-transmission components. Following the acquisition of Adroit Driveshafts, some downstream activities were shifted from Sanwer to Pithampur as part of the company's operational reorganization. The Sanwer facility currently supports select finishing operations for machined components and products requiring specialized processes.
The company plans to expand its product portfolio and strengthen its international presence by deepening relationships with existing customers and expanding into additional geographies through distributors, Tier-1 driveline component suppliers and OEMs.
The company also plans to strengthen direct supply relationships with domestic OEMs, where it currently derives a smaller share of sales compared with distributors and Tier-1 suppliers. It has recently received orders from domestic automotive OEMs. This could help expand its participation in additional OEM product programmes.
Offer and its objects
The IPO comprises fresh issue of equity shares worth up to Rs 132.62 crore and an offer for sale of 13,50,000 equity shares aggregating up to Rs 18.09 crore by Mukesh Sangla HUF.
Price band for the IPO is Rs 126 to Rs 134 per equity share of face value Rs 10 each.
The fresh issue proceeds will be used mainly for capex and debt repayment. Around Rs 19.9 crore will fund machinery, equipment and transport vehicle for the Dewas facility. Another Rs 43.95 crore will be invested in subsidiary Adroit Driveshafts for machinery and equipment to enhance operations at its Pithampur facility, along with acquiring transport vehicle. Around Rs 24.19 crore will be used to repay or prepay borrowings of Adroit Driveshafts, while the remaining proceeds will be used for general corporate purposes.
Plans to expand its manufacturing capacity at the Dewas and Pithampur facilities. At Dewas, it proposes to add a forging press line with billet heating and automation systems, while Pithampur will add CNC machining equipment, automated manufacturing cells and testing equipment for propeller shaft balancing and performance testing. The expansion is aimed at increasing capacity, improving automation and productivity, and strengthening quality control.
The promoters are Saurabh Sangla, Mukesh Sangla, Monika Sangla, Swan Irrigation LLP, Shubhangi Trust and Shreya Trust. The promoters and promoter group hold an aggregate of 3,35,49,334 equity shares, aggregating to 96.1% of the pre-offer issued and paid-up equity share capital. Their post IPO shareholding is expected to be around 71.86%.
The issue, through the book-building process, will open on 23 Sept 2026 and will close on 25 Sept 2026.
Strengths
Offers a diverse portfolio of more than 5,000 SKUs of driveline components, enabling the company to address varied customer requirements across automotive and non-automotive applications.
Integrated manufacturing setup allows it to carry out key production stages in-house, providing greater control over quality, process consistency, costs and turnaround time while reducing dependence on third-party vendors.
OPM improved from 23.84% in FY24 to 27.66% in FY26, reflecting an expansion in operating margins over the two-year period.
Established relationships with customers across automotive, industrial, mining and other sectors. Customers associated with the company for more than three years contributed 71.91% of revenue from sales of products in FY26.
Operates in a high-entry-barrier industry, with stringent customer qualification processes that can take 12'18 months. The company is part of the vendor base of OEMs and Tier-1 suppliers and has in-house capabilities across forging, precision machining, heat treatment, balancing and testing to meet customer-specific requirements.
Strong export presence with diversified geographical reach. The company supplies its products to over 32 countries across North America, Europe, Latin America, the Middle East, Africa and Asia-Pacific.
High repeat business, with 110 of 185 customers being repeat customers in FY26. These customers contributed 90.26% of revenue in FY26.
Extensive experience of promoters and senior management personnel.
Weaknesses
High export dependence, with exports contributing 95.39% of FY26 revenue from sales of products. The US accounted for 53.76% of export sales, exposing the company to currency fluctuations, overseas demand conditions, trade restrictions, tariffs and geopolitical uncertainty.
High customer concentration, with the largest customer contributing 20.92% and the top five customers contributing 48.91% of revenue in FY26.
Past statutory filing and compliance lapses, including delayed filings with the Registrar of Companies, with some delays extending up to 3,771 days. These instances could expose the company to regulatory actions and reputational risks.
High supplier concentration, with the top supplier accounting for 28.36% of total purchases in FY26. Moreover, the company generally procures on a purchase-order basis without long-term supply agreements, exposing it to potential supply disruptions.
Subject to stringent vendor qualification, product validation and quality control requirements imposed by customers.
Significant dependence on distributors, which contributed 62.45% of revenue from sale of products in FY26, while direct OEM sales accounted for only 4.68%. This limits the company's direct exposure to OEM programmes and increases reliance on intermediaries.
Exposure to the transition toward electric vehicles, as some EV drivetrain architectures reduce the need for conventional propeller shafts. This could affect long-term demand for some of its core driveline products.
Working capital-intensive operations, with inventory days at 135 in FY26 and inventory accounting for 46.03% of current assets. High inventory levels increase working capital requirements and expose the company to liquidity risks.
Valuation
Net sales increased 5% to Rs 139.94 crore in FY26 as compared with FY25. OPM improved 450 bps to 27.66%, leading to 25% increase in OP to Rs 38.71 crore. OI increased 14% to Rs 3.1 crore. Interest cost fell 28% to Rs 4.66 crore. Depreciation costs fell 5% to Rs 4.25 crore. Tax expenses were Rs 6.75 crore as compared with Rs 4.68 crore. Net profit increased 44% to Rs 26.13 crore.
The FY26 EPS on post-issue equity works out to Rs 5.8. At the upper price band of Rs 134, P/E is 23.
Total outstanding borrowings amounted to Rs 57.46 crore as on July 31, 2026. Around 42% of the debt will be repaid from the issue proceeds, which could reduce interest costs and support profitability. The FY26 EPS works out to Rs 6.2 if 42% of the interest cost is removed, keeping all other items, including the tax rate, unchanged. The reworked P/E at the upper price band is 22.
Listed peers such as Hindustan Hardy traded at FY26 P/E of 14, Talbros Engineering at FY26 P/E of 21, and GNA Axles at FY26 P/E of 21 as on 21 September 2026. The OPM and ROE stood at 27.66% and 22.51% respectively, in FY26. These were 11.08% and 25% for Hindustan Hardy, 11.28% and 17.32% for Talbros Engineering, and 16.09% and 12.28% for GNA Axles, respectively.
| Adroit Industries (India): Issue Highlights | ||
| For Fresh Issue Offer size (in Rs crore) |
| |
| - On lower price band | 124.7 | |
| - On upper price band | 132.62 | |
| Offer size (in no of shares) | 98,97,000 | |
| For Offer for Sale Offer size (in Rs crore) |
| |
| - On lower price band | 17.01 | |
| - On upper price band | 18.09 | |
| Offer size (in no of shares) | 13,50,000 | |
| Price band (Rs) | 126-134 | |
| Minimum Bid Lot (in no. of shares) | 111 | |
| Post issue capital (Rs crore) | 44.81 | |
| Post-issue promoter & Group shareholding (%) | 71.86 |
|
| Issue open date | 23-09-2026 |
|
| Issue closed date | 25-09-2026 |
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| Listing | BSE, NSE | |
| Rating | 43/100 | |
| Adroit Industries (India): Restated Consolidated Financials | |||
|
| 2403 (12) | 2503 (12) | 2603 (12) |
| Sales | 124.53 | 133.89 | 139.94 |
| OPM (%) | 23.84% | 23.16% | 27.66% |
| OP | 29.69 | 31.01 | 38.71 |
| Other inc. | 0.57 | 2.72 | 3.10 |
| PBIDT | 30.26 | 33.73 | 41.81 |
| Interest | 8.21 | 6.46 | 4.66 |
| PBDT | 22.05 | 27.28 | 37.15 |
| Dep. | 4.09 | 4.46 | 4.25 |
| PBT | 17.96 | 22.82 | 32.91 |
| Share of Profit/(Loss) from Associates/JV | - | - | - |
| PBT before EO | 17.96 | 22.82 | 32.91 |
| Exceptional items | - | - | - |
| PBT after EO | 17.96 | 22.82 | 32.91 |
| Taxation | 3.43 | 4.68 | 6.75 |
| PAT | 14.53 | 18.14 | 26.16 |
| Minority Interest | 0.02 | 0.02 | 0.03 |
| Net Profit | 14.51 | 18.12 | 26.13 |
| EPS (Rs)* | 3.2 | 4.0 | 5.8 |
| * EPS is annualized on post issue equity capital of Rs 44.81 crore of face value of Rs 10 each | |||
| # EPS is not annualised due to seasonality of business |
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| EO: Extraordinary items. EPS is calculated after excluding EO and relevant tax |
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| Figures in Rs crore |
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| Source: Capitaline Corporate Database |
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