ARMOUR SECURITY INDIA LIMITED IPO Explain

Armour Security India IPO Overview

New Delhi-based private security and facility management services provider raising ₹26.51 cr (100% fresh issue). Price: ₹55-57 (Book Building). Lot: 2,000 shares (₹2,28,000 min investment – 4 lots). GMP: ₹0-1 (0%-1.75% premium – NEGLIGIBLE investor interest).

Funds for working capital (₹15.11-15.90 cr), capex for machinery/equipment/vehicles (₹1.61 cr), debt repayment (₹2.40-3.00 cr), general corporate purposes.

Lead: Sobhagya Capital Options.

Registrar: Skyline Financial Services.

Incorporated August 1999 (26+ years old – established player), converted to public limited May 2024. PAN-India operations with multi-state branches. 37 permanent employees, 1,269 contractual employees (Feb 2025) – EXTREMELY labor-intensive, low-margin business model.

Products/Services: Private security services (armed/unarmed guards, manned guarding for corporate/industrial/banking/healthcare/government/education), Integrated Facility Management (cleaning, pest control, waste disposal, grounds maintenance, MEP), Housekeeping Services, Event Management Security, Firefighting Services, Security Training, Supervision Services, Other Manpower Services (skilled/semi-skilled/unskilled blue-collar workers – data entry operators, pantry staff, gardeners, drivers, cooks, attendants, plumbers, electricians, clerks). B2B model serving commercial, residential, institutional clients across sectors through contract-based recurring revenue.

IPO DETAILED INFORMATION

Issue Details

Parameter	Details
IPO Type	SME (NSE SME)
IPO Open Date	14 January 2026 (Tuesday)
IPO Close Date	19 January 2026 (Sunday) – 6 days (unusually long)
Anchor Investor Bidding	No anchor allocation for SME IPOs
Allotment Date	20 January 2026 (Monday) – Expected
Credit to Demat	21 January 2026 (Tuesday) – Expected
Refund Initiation	21 January 2026 (Tuesday) – Expected
Listing Date	22 January 2026 (Wednesday) – Tentative
Price Band	₹55 to ₹57 per share (Book Building)
Face Value	₹10 per share
Lot Size	2,000 shares per lot
Min Investment (Retail)	₹2,28,000 (4 lots = 4,000 shares at ₹57)
sNII Investment	₹3,42,000 (3 lots minimum = 6,000 shares)
bNII Investment	Data not specified
Issue Size	₹26.51 crore at upper band (100% Fresh Issue)
Fresh Issue	₹26.51 crore (100%) – 46,50,000 shares
Offer for Sale (OFS)	₹0 (No OFS component)
Total Shares Offered	46,50,000 equity shares (includes 2,34,000 for market makers)
Listing	NSE SME
Post-Issue Market Cap	~₹96.16 crore (at upper band ₹57)

Issue Break-up

Category	Allocation	Shares
QIB (Qualified Institutional Buyers)	0%	46,000 shares (0.99% – NEGLIGIBLE)
NII (Non-Institutional Investors)	47.10%	21,90,000 shares
Retail Individual Investors	46.88%	21,80,000 shares
Market Maker	5.03%	2,34,000 shares

Selling Shareholders (OFS)

NO OFFER FOR SALE – 100% Fresh Issue

No promoter selling
Entire ₹26.51 cr proceeds go to company
Promoters retain strong majority post-IPO

Objects of the Issue (Fund Utilization)

Fresh Issue Proceeds (₹26.51 crore at upper band) will be used for:

Specific Allocation (Data Variance Across Sources):

Working Capital Requirements – ₹15.11-15.90 crore (57-60% of proceeds)
- Day-to-day operational expenses for labor-intensive security services
- Managing receivables from B2B commercial/institutional clients
- Payroll financing for 1,269 contractual employees (guards, housekeeping, manpower)
- Managing contract-based revenue cycles with 30-90 day payment terms
- Raw materials/consumables for facility management (cleaning supplies, pest control, MEP maintenance)
Capital Expenditure – Purchase of Machinery, Equipment, Vehicles – ₹1.61 crore (6.1% of proceeds)
- Vehicles for mobile patrolling, supervisory staff transportation
- Security equipment: surveillance cameras, access control systems, metal detectors, communication devices
- Facility management equipment: cleaning machines, pest control apparatus, MEP tools
- Office infrastructure for PAN-India branch expansion
Debt Repayment/Prepayment – ₹2.40-3.00 crore (9.1-11.3% of proceeds)
- Full or partial repayment of outstanding borrowings
- Reducing interest burden from working capital loans
- Improving balance sheet leverage ratios
- Lower debt servicing costs to improve profitability
General Corporate Purposes – Balance funds (~₹6-7 crore, 23-26%)
- IPO offer-related expenses (registrar, BRLM fees, legal, documentation)
- Marketing and business development for client acquisition
- Geographic expansion into new states
- Contingency reserves

Strategic Context:

60% working capital allocation reflects labor-intensive, receivables-heavy business model
Security services require upfront payroll funding before client payments (30-90 day cycles)
1,269 contractual employees + 37 permanent staff = ₹15+ cr annual payroll estimated
₹1.61 cr capex (6.1%) is minimal – indicates NOT scaling infrastructure aggressively
₹2.40-3 cr debt repayment (11.3% max) suggests moderate leverage, not debt-stressed
Low-margin business: FY25 PAT margin 10.86% (₹3.97 cr on ₹36.56 cr) – working capital critical

Capital Allocation Rationale:

Labor-intensive model requires continuous working capital for payroll before client payments
Contract-based B2B model (corporate, government clients) creates 30-90 day receivables cycles
Minimal capex (6.1%) indicates services business – people-driven, not asset-heavy
Debt repayment improves financials but small amount (₹2.40-3 cr) suggests low borrowings

Note: 60% working capital is high but justified for labor-intensive security/facility management with contractual payroll obligations and delayed client payments. However, ₹15.11-15.90 cr for 1,269 employees = ₹11,915-12,539 per employee from IPO – insufficient for annual payroll, indicates ongoing working capital stress.

Lead Managers & Registrar

Book Running Lead Manager (BRLM):

Sobhagya Capital Options Private Limited
- Address: C-4 to C-11, Gate No-01, Hosiery Complex, Phase-II Extension, Noida – 201305
- Phone: +91 78360 66001
- Email: [email protected]
- Website: www.sobhagyacap.com

Registrar:

Skyline Financial Services Private Limited
- Address: D-153 A, 1st Floor, Okhla Industrial Area, Phase – I, New Delhi – 110020
- Phone: +91-11-40450193-197
- Website: www.skylinerta.com

Market Maker:

NNM Securities Private Limited
- Provides liquidity on NSE SME platform post-listing

Promoters & Management

Key Promoters (2 Individual Promoters – Family Business):

Mrs. Arnima Gupta – Promoter & Managing Director
- Age: 42 years
- On the Board since July 1, 2008 (17 years with company)
- Appointed Managing Director: February 18, 2025
- Education: Bachelor of Arts (2004) from Chaudhary Charan Singh University, Meerut
- Experience: 15+ years in manpower and security services industry
- Oversees overall operations, client relationships, business strategy
- Co-promoter with husband Vinod Gupta – family-run business
Mr. Vinod Gupta – Promoter & Chairman
- Co-founder and co-promoter since 1999 (26+ years with company)
- Chairman of the Board
- Strategic leadership and business development
- Decades of experience in security services sector
- Family business with wife Arnima Gupta as Managing Director

Promoter Holding:

Pre-IPO: Data not fully disclosed
Post-IPO: Majority stake retained (estimated 70-80% given no OFS and 46.50 lakh shares issued)
NO OFS – promoters NOT exiting, demonstrating confidence in business

Company History:

Incorporated: 27 August 1999 (26+ years old) as “Armour Security (India) Private Limited” – Registrar of Companies, NCT of Delhi and Haryana
Converted to Public Limited: May 2024 (public company since 9 months)
Operations: 26+ years (1999-2026) – established player, not startup
Evolution:
- 1999: Founded as private limited company in Defense Colony, New Delhi by Vinod Gupta and Arnima Gupta
- Started with single office in Defense Colony, Delhi providing basic armed/unarmed guard services
- Initial focus: Manned guarding for commercial, residential, industrial clients in Delhi-NCR
- 2000s: Expanded PAN-India with branches across multiple states (Gujarat, Maharashtra, UP, others)
- Diversified services: Added integrated facility management, housekeeping, event security, firefighting
- Built manpower services vertical: Skilled/semi-skilled/unskilled blue-collar workers (data entry, pantry, gardening, driving, cooking, plumbing, electrical)
- 2010s: Scaled contractual workforce – currently 1,269 contractual employees + 37 permanent (Feb 2025)
- Developed B2B contract-based recurring revenue model with corporate, government, institutional clients
- Sectors served: Corporate, industrial, banking, healthcare, government, education/universities
- FY23: Revenue data not disclosed (base year)
- FY24 (Mar 2024): Revenue ₹33.10 cr, PAT ₹2.62 cr (7.92% margin)
- FY25 (Mar 2025): Revenue ₹36.56 cr (+10.45% YoY), PAT ₹3.97 cr (+51.53% YoY, 10.86% margin)
- May 2024: Converted to public limited company for IPO preparation
- Quality Focus: “Finding the right man for the job” – matching manpower skills to client requirements
- Operational Footprint: Started Defense Colony Delhi → Now PAN-India with multi-state branches
- Service Evolution: Armed/unarmed guards → Integrated facility management → Blue-collar manpower supply
- Business Model: Contract-based B2B recurring revenue with long-term client relationships
Workforce: 37 permanent employees + 1,269 contractual employees (Feb 28, 2025) – 97.17% contractual!
Milestones:
- 26+ years operational track record (1999-2026)
- PAN-India presence with multi-state branch network
- FY25: Revenue ₹36.56 cr (+10% YoY), PAT ₹3.97 cr (+52% YoY)
- PAT margin expansion: 7.92% (FY24) → 10.86% (FY25) – 294 bps improvement
- 1,269 contractual workforce management capability
- Diversified service portfolio: Security + Facility Management + Manpower Supply

Company Contact:

Registered Office: B-87, Second Floor, Defence Colony, New Delhi – 110024, India
Phone: +91 9810139833
Website: www.armoursecurities.com

COMPANY DETAILS

Armour Security India Limited is a New Delhi-based private security and integrated facility management company incorporated on 27 August 1999, making it a 26+-year-old established player (not startup), converted to public limited in May 2024. Operating from Defense Colony Delhi headquarters with PAN-India presence across multiple states, the company provides end-to-end security manpower services and facility management solutions including armed/unarmed manned guarding for corporate, industrial, banking, healthcare, government, and education sectors, integrated facility management (cleaning, pest control, waste disposal, grounds maintenance, MEP), housekeeping services, event security, firefighting services, security training, supervision services, and other manpower services (skilled/semi-skilled/unskilled blue-collar workers like data entry operators, pantry staff, gardeners, drivers, cooks, attendants, plumbers, electricians, clerks), serving commercial, residential, and institutional B2B clients through contract-based recurring revenue model with 37 permanent employees and 1,269 contractual employees (Feb 2025 – 97.17% contractual workforce).

Key Highlights:

26+ Years Old: Incorporated Aug 1999 (established player), converted to public limited May 2024 (9 months as public company)
Location: New Delhi HQ (Defense Colony) + PAN-India multi-state branch network
EXTREMELY Labor-Intensive: 97.17% contractual workforce (1,269 out of 1,306 total) – low-margin, people-driven business
Modest Growth: Revenue +10.45% (₹33.10 cr to ₹36.56 cr FY24-25), PAT +51.53% (₹2.62 cr to ₹3.97 cr) but from SMALL base
Low Absolute Scale: ₹36.56 cr revenue (FY25), ₹3.97 cr PAT – TINY company
PAT Margin Improvement: 7.92% (FY24) → 10.86% (FY25) – 294 bps expansion (positive trend)
NEGLIGIBLE GMP: ₹0-1 (0%-1.75% premium) – EXTREMELY WEAK investor interest, poor listing outlook
NO Institutional Backing: Zero QIB meaningful allocation (0.99%), no marquee investors – retail/promoter-driven
Family Business: Vinod Gupta (Chairman) + Arnima Gupta (MD, wife) – husband-wife promoters
Contract-Based B2B: Recurring revenue from corporate/government contracts but 30-90 day payment cycles

Operations

Geographic Presence:

Headquarters: Defense Colony, New Delhi (NCR)
Operational Footprint: PAN-India with branches across multiple states (specific states not disclosed but likely Gujarat, Maharashtra, UP, Haryana, Delhi-NCR focus)
Client Sectors: Corporate, industrial, banking, healthcare, government bodies, educational institutions, universities, residential complexes

Revenue Mix (FY25 – Inferred from Services):

Private Security Services: Largest vertical – armed/unarmed guards, manned guarding (estimated 50-60% revenue)
Integrated Facility Management: Cleaning, pest control, waste disposal, grounds maintenance, MEP (estimated 25-35% revenue)
Other Manpower Services: Skilled/semi-skilled/unskilled blue-collar supply – data entry, pantry, gardening, driving, cooking, plumbing, electrical (estimated 10-15% revenue)
Ancillary Services: Event security, firefighting, security training, supervision (estimated 5-10% revenue)

Growth Trajectory:

Revenue Growth (FY24-25): +10.45% YoY (₹33.10 cr to ₹36.56 cr) – SINGLE-DIGIT modest growth
PAT Growth (FY24-25): +51.53% YoY (₹2.62 cr to ₹3.97 cr) – strong PAT growth but from TINY ₹2.62 cr base
Margin Expansion: PAT margin improved from 7.92% (FY24) to 10.86% (FY25) – 294 bps expansion (operational efficiency improving)
Absolute Scale: ₹36.56 cr revenue is TINY – comparable to single large security contract, not scalable enterprise

CRITICAL CONTEXT:

10% revenue growth is modest for SME IPO – not high-growth company
51% PAT growth looks impressive but from TINY ₹2.62 cr base – absolute PAT ₹3.97 cr is SMALL
₹36.56 cr revenue for 1,306 employees (1,269 contractual + 37 permanent) = ₹28 lakh revenue/employee – LOW productivity
Labor-intensive, low-margin business: Security services typically 5-12% PAT margins – Armour at 10.86% (FY25) is mid-range
Working capital intensive: 60% of IPO (₹15.11 cr) for working capital indicates receivables/payroll stress
No disclosed EBITDA, ROE, ROCE data limits financial analysis – transparency gap

Sustainability Questions:

Can 10% revenue growth sustain without aggressive client acquisition (which requires sales/marketing capex)?
Will PAT margin 10.86% compress with wage inflation for 1,269 contractual employees?
How to scale beyond ₹36.56 cr revenue without proportional increase in low-productivity workforce?

Company Strengths

26+ Years Established Track Record – Survived Multiple Business Cycles:
- Incorporated Aug 1999 (26+ years operational history) – not startup
- Survived dot-com bust (2000), global financial crisis (2008), COVID pandemic (2020) – proven resilience
- Long-term client relationships in contract-based security services
- PAN-India footprint built over 2+ decades demonstrates scalability (albeit slow)
Diversified Service Portfolio – Security + Facility Management + Manpower:
- Three revenue verticals reduce single-service dependency:
  - (1) Private Security Services (armed/unarmed guards, manned guarding)
  - (2) Integrated Facility Management (cleaning, pest control, waste disposal, MEP)
  - (3) Other Manpower Services (skilled/semi-skilled/unskilled blue-collar supply)
- Ancillary services: Event security, firefighting, security training, supervision
- Cross-selling opportunity: Security clients can buy facility management, manpower services
Contract-Based Recurring Revenue – Predictable B2B Cash Flows:
- B2B model with corporate, government, institutional clients on multi-year contracts
- Recurring revenue from long-term manned guarding, facility management contracts
- Lower customer acquisition cost (CAC) vs. one-time transactional businesses
- Client retention critical – established 26-year relationships provide stickiness
India’s Booming Security & Facility Management Market – Sectoral Tailwinds:
- India security services market growing at 12-15% CAGR (₹80,000+ cr industry)
- Urbanization, infrastructure boom, rising crime awareness driving private security demand
- Corporate outsourcing trend: Companies outsourcing non-core security, housekeeping, manpower to focus on core business
- Government mandates: Security requirements for banks, infrastructure, government buildings creating recurring procurement
- APMR (Association of Private Security Agencies of India) estimates 7-8 million private security personnel deployed nationally – massive addressable market
Low Promoter Exit – 100% Fresh Issue Demonstrates Confidence:
- NO OFS – promoters NOT exiting despite 26 years in business
- Promoters (Vinod + Arnima Gupta) retain majority stake post-IPO
- Demonstrates long-term commitment vs. quick-exit promoters
- Family business continuity – husband-wife promoters building legacy
PAT Margin Expansion – 7.92% to 10.86% (FY24-25) Shows Operational Efficiency:
- PAT margin improved 294 bps from 7.92% (FY24) to 10.86% (FY25)
- Demonstrates ability to improve operational efficiency despite labor-intensive model
- Cost control, better contract pricing, workforce productivity gains
- If margins sustain at 10-11%, profitability scalable with revenue growth

Key Risks & Challenges

TINY Scale – ₹36.56 Cr Revenue, ₹3.97 Cr PAT (FY25) – EXTREMELY SMALL:
- Revenue ₹36.56 cr (FY25) is MINUSCULE – comparable to single large security contract
- PAT ₹3.97 cr is TINY – insufficient earnings base for public company
- Post-IPO market cap ~₹96 cr at ₹57 – PE ratio ~24X on ₹3.97 cr PAT (expensive for no-growth SME)
- Small absolute scale creates vulnerability to single client loss, economic shocks, competitive pressures
- Difficult to attract institutional investors or analyst coverage at ₹96 cr market cap
NEGLIGIBLE GMP (₹0-1) – EXTREMELY WEAK Investor Interest, Poor Listing Outlook:
- GMP ₹0-1 (0%-1.75% premium) indicates ZERO investor excitement
- Grey market is proxy for retail demand – ₹0-1 GMP signals AVOID sentiment
- Listing gains likely FLAT or NEGATIVE – high risk of listing below issue price
- IPO likely to struggle to fill subscription without strong fundamentals or growth story
- NO institutional interest (0.99% QIB allocation) compounds weak demand
EXTREME Labor Intensity – 97.17% Contractual Workforce (1,269/1,306), Low Productivity:
- 1,269 contractual employees + 37 permanent = 1,306 total (97.17% contractual!)
- Revenue per employee: ₹36.56 cr / 1,306 = ₹28 lakh/employee – VERY LOW productivity
- Labor-intensive model limits scalability – revenue growth requires proportional headcount increase
- Wage inflation risk: Minimum wage hikes, labor law changes directly compress margins
- Attrition challenges: Security guards, housekeeping staff high-turnover roles – continuous recruitment/training costs
- Limited operating leverage – opex (payroll) scales linearly with revenue, not exponentially
Low-Margin Commodity Business – Security/Facility Management 5-12% PAT Margins:
- Security services is COMMODITY business – differentiation limited beyond price
- Industry PAT margins: 5-12% (Armour at 10.86% is mid-range but vulnerable)
- Intense price competition from thousands of unorganized regional players
- Large competitors (SIS, G4S, TOPSGRUP, Securitas) have economies of scale, better pricing power
- Contract renewals highly price-sensitive – clients switch for 5-10% cost savings
- Working capital intensive: 60% of IPO (₹15.11 cr) for working capital indicates receivables/payroll stress
Intense Competition – SIS (154K employees), G4S (135K), TOPSGRUP, Securitas, 1000s of Unorganized Players:
- Competes with GIANTS:
  - SIS Limited (listed): 154,000+ employees, 8,000+ corporate clients, 41-year track record, ISO certified, 17 training academies – DOMINANT player
  - G4S India: 135,000 employees, 131 branches/hubs, global backing (Allied Universal) – MASSIVE scale
  - TOPSGRUP: India’s largest security group, ISO certified, thousands of clients across India/UK/globally
  - Securitas India: Global security leader (Securitas AB), advanced technology, pan-India operations
  - Fireball Securitas, Miraz Securitas, i3 Security, Sentrigo Safeguards, JP Security: Regional competitors
- 1,000s of unorganized local security agencies undercutting on price
- Armour’s 1,269 employees vs. SIS’s 154,000 – TINY scale, ZERO competitive advantage
- NO differentiation – commoditized services (manned guarding, housekeeping, blue-collar supply)
Working Capital Intensive – 60% of IPO (₹15.11 Cr) for Working Capital:
- ₹15.11 cr (60% of IPO proceeds) allocated to working capital – UNUSUALLY HIGH
- Indicates severe receivables/payroll funding stress
- Security services require upfront payroll before 30-90 day client payments
- ₹15.11 cr for 1,269 employees = ₹11,915/employee from IPO – INSUFFICIENT for annual payroll (₹2-3 lakh/employee/year typical for guards/housekeeping)
- Persistent working capital needs – IPO funds provide temporary relief, not structural solution
- If client payments delay or defaults occur, working capital crunch resurfaces
NO Institutional Backing – ZERO Meaningful QIB Allocation (0.99%), No Marquee Investors:
- QIB allocation: 0.99% (46,000 shares out of 46,50,000) – TOKEN allocation, NOT real institutional interest
- NO marquee pre-IPO investors (unlike Ashish Kacholia in INDO SMC, Premji Invest in Amagi)
- NO anchor book – SME IPOs don’t have anchors but lack of institutional validation hurts credibility
- Retail/promoter-driven IPO – vulnerable to poor subscription, listing day selling pressure
- Limited analyst coverage, research, institutional buying support post-listing
Single-Digit Revenue Growth (10.45%) – NOT High-Growth SME:
- Revenue growth 10.45% (FY24-25) is MODEST – below SME IPO expectations (20-30%+ typical)
- 10% growth barely above inflation – not value-creation pace
- PAT growth 51.53% looks strong but from TINY ₹2.62 cr base – absolute PAT ₹3.97 cr still SMALL
- No disclosed order book, client pipeline, expansion plans – limited growth visibility
- Scaling from ₹36.56 cr to ₹100+ cr revenue requires 3X growth – no clear path articulated
Family Business Governance – Husband-Wife Promoters (Vinod + Arnima Gupta):
- Promoters: Vinod Gupta (Chairman) + Arnima Gupta (MD, age 42, wife) – family-run business
- Concentrated decision-making – limited professional management disclosed
- Succession planning risk – family businesses often face leadership transitions
- Related party transactions potential – family-controlled entities may create conflicts
- NO independent institutional investors or board oversight pre-IPO – governance optics weak
₹2.28 Lakh Minimum Investment (SME) – High Retail Entry Barrier:
- ₹2,28,000 minimum investment (4 lots @ 2,000 shares each at ₹57)
- SME IPO lot sizes much higher than mainboard (typically ₹15K-20K)
- High entry barrier limits retail participation, liquidity post-listing
- SME stocks inherently illiquid with wide bid-ask spreads
- NSE SME platform has lower disclosure/compliance requirements vs. mainboard

Disclaimer

Armour Security India Limited (incorporated 27 Aug 1999 – 26+ years old established player, converted to public limited May 2024) provides private security and integrated facility management services including armed/unarmed manned guarding for corporate/industrial/banking/healthcare/government/education sectors, facility management (cleaning, pest control, waste disposal, MEP), housekeeping, event security, firefighting, security training, and skilled/semi-skilled/unskilled blue-collar manpower supply (data entry, pantry, gardening, driving, cooking, plumbing, electrical) from Defense Colony New Delhi HQ with PAN-India multi-state branches, serving B2B commercial/residential/institutional clients through contract-based recurring revenue model with 37 permanent + 1,269 contractual employees (97.17% contractual, Feb 2025), with FY25 revenue ₹36.56 cr (+10.45% YoY from ₹33.10 cr FY24), PAT ₹3.97 cr (+51.53% YoY from ₹2.62 cr, 10.86% margin vs. 7.92% FY24, 294 bps expansion), yet raising ₹26.51 cr (100% fresh, no OFS) with 60% allocated to working capital (₹15.11 cr) indicating severe receivables/payroll stress + 6.1% to capex machinery/vehicles (₹1.61 cr) + 11.3% to debt repayment (₹2.40-3 cr) + 23% general corporate, faces risks: TINY scale (₹36.56 cr revenue, ₹3.97 cr PAT – insufficient for public company), NEGLIGIBLE GMP ₹0-1 (0%-1.75% premium indicates EXTREMELY WEAK investor interest, poor listing outlook), EXTREME labor intensity (97.17% contractual workforce, ₹28 lakh revenue/employee = LOW productivity), low-margin commodity business (security/facility management 5-12% PAT margins, intense price competition), intense competition from GIANTS (SIS 154K employees, G4S 135K, TOPSGRUP, Securitas + 1000s unorganized players), working capital intensive (60% of IPO = ₹15.11 cr for working capital, persistent funding stress