RIDDHI DISPLAY EQUIPMENTS LIMITED IPO Explain

RIDDHI DISPLAY EQUIPMENTS IPO OVERVIEW

Rajkot-based commercial kitchen and display equipment manufacturer raising ₹24.68 cr (100% fresh issue). Price: ₹95-100. Lot: 1,200 shares (₹2.40L min).

Funds for machinery (₹9.79 cr), working capital (₹10.26 cr), general corporate purposes.

Lead: Jawa Capital.

Founded 2006, legacy from 1985. Manufactures display counters, kitchen equipment, refrigeration for hotels, restaurants, bakeries, retail. Competes with Western Refrigeration, Ice Make, Elanpro, Voltas, Blue Star. Strong growth (33% revenue, 105% PAT FY24-25) but high customer concentration, single facility risk, Gujarat dependency.

IPO DETAILED INFORMATION

Issue Details

Parameter	Details
IPO Type	SME
IPO Open Date	08 December 2025 (Sunday)
IPO Close Date	10 December 2025 (Tuesday)
Anchor Investor Bidding	Not Applicable for SME
Allotment Date	11 December 2025 (Wednesday) – Expected
Credit to Demat	12 December 2025 (Thursday) – Expected
Refund Initiation	12 December 2025 (Thursday) – Expected
Listing Date	15 December 2025 (Sunday) – Tentative
Price Band	₹95 – ₹100 per share
Face Value	₹10 per share
Lot Size	1,200 shares
Min Investment (Retail)	₹2,40,000 (2 lots / 2,400 shares at upper band)
HNI Investment	₹3,60,000 (3 lots / 3,600 shares) minimum
Issue Size	₹24.68 crore total
Fresh Issue	₹24.68 crore (100%) – 24,68,400 shares
Offer for Sale (OFS)	NIL – No OFS component
Total Shares Offered	24,68,400 equity shares
Listing	BSE SME (Emerge Platform)
Post-Issue Market Cap	₹86.40 crore (at upper price band)
Post-Issue Paid-up Capital	86.40 lakh shares

Issue Break-up

Category	Allocation
QIB (Qualified Institutional Buyers)	50% of Net Offer
NII (Non-Institutional Investors)	15% of Net Offer
Retail Individual Investors	35% of Net Offer
Market Maker	As per SEBI regulations

Selling Shareholders (OFS)

No Offer for Sale (OFS) – Entire issue is 100% fresh capital infusion for company growth. No promoter or investor exits.

Objects of the Issue (Fund Utilization)

Fresh Issue Proceeds (₹24.68 crore) will be used for:

1. Purchase of Machinery & Equipment – ₹9.79 crore (39.7%)
   • CNC Laser Cutting Machine
   • CNC Turret Punching Machine
   • CNC Bending Machine (Press Brake)
   • Capacity expansion and automation in manufacturing
   • Technology upgrades for precision manufacturing
   • Efficiency improvements and quality enhancement
2. Working Capital Requirements – ₹10.26 crore (41.6%)
   • Raw material procurement (stainless steel, compressors, glass)
   • Inventory financing for finished goods and work-in-progress
   • Trade receivables management (debtor days: 119-150)
   • Operational expenses including salaries, utilities
   • Support for order execution and project timelines
3. General Corporate Purposes – ₹4.63 crore (18.7%)
   • Technology infrastructure and ERP systems
   • Marketing and brand building initiatives
   • Business development and customer acquisition
   • Regulatory compliance and certifications
   • Contingency reserves for unforeseen requirements

Strategic Focus:

• Manufacturing capacity expansion through CNC machinery
• Automation and precision manufacturing capabilities
• Working capital strength to support 33%+ revenue growth
• Operational efficiency and quality improvements
• No debt component – clean balance sheet post-IPO

Note: 100% fresh issue indicates genuine growth capital requirement, no investor/promoter exits. Positive indicator of growth intent.

Lead Managers & Registrar

Book Running Lead Manager (BRLM):

• Jawa Capital Services Private Limited
  • Track Record: 8th mandate in last two fiscals
  • Past Performance: Out of 7 listings – 4 opened at discount, 1 at par, 2 at premium (20-50%)
  • Mixed track record indicates cautious evaluation needed

Registrar:

• Maashitla Securities Private Limited
  • Address: 451, Krishna Apra Business Square, Netaji Subhash Place, Pitampura, Delhi – 110034
  • Phone: +91-11-45121795-96
  • Email: [email protected]
  • Website: https://maashitla.com/allotment-status/public-issues

Market Maker:

• Aftertrade Broking Private Limited (as per filings)

Promoters & Management

Key Promoters (Family-promoted Business):

1. Shaileshbhai Ratibhai Pipaliya – Promoter & Chairperson
   • Founder visionary since 1985 (40 years of industry experience)
   • Led company from inception to current market position
   • Deep domain expertise in display and kitchen equipment manufacturing
   • Strategic leadership and customer relationship management
2. Hansaben Shaileshbhai Pipaliya – Promoter
   • Co-founder and key stakeholder
   • Family business leadership role
3. Jay Shailehskumar Pipaliya – Promoter
   • Next-generation leadership
   • Involved in operations and business expansion

Company History:

• Original Establishment: 1985 by Mr. Shailesh Patel (business legacy of 40 years)
• Corporate Incorporation: January 12, 2006 as Riddhi Display Equipments Private Limited
• Conversion to Public: October 10, 2024 – converted from private to public limited company
• Fresh Certificate: November 21, 2024 – name changed to Riddhi Display Equipments Limited
• CIN: U29300GJ2006PLC047501

Management Team:

• Experienced board of directors with manufacturing expertise
• Professional management team with extensive industry experience
• Technical team with design and engineering capabilities
• 55 employees on payroll as of August 31, 2025

Certifications & Recognition:

• ISO 9001:2015 – Quality Management System Certification
• ETL Certification – Authorization of Mark for export to USA and Canada
• Legacy Recognition: 40 years of industry presence (1985-2025)
• 3,500+ satisfied customers served across India and international markets

Company Contact:

• Registered Office: Plot No.1, Survey No.2/1 P4/P2, National Highway-27, Gondal Highway, Village Bhojpara, Rajkot, Gondal – 360311, Gujarat, India
• Phone: +91 98250 72799
• Email: [email protected]
• Website: https://riddhidisplay.com/

COMPANY OVERVIEW

Establishment & Background:

• Founded: 1985 (40 years of operational legacy)
• Corporate Incorporation: January 12, 2006 (19 years as corporate entity)
• Industry: Commercial Kitchen Equipment, Display Counters, Refrigeration Equipment Manufacturing
• Headquarters: Gondal, Rajkot, Gujarat
• Founder: Mr. Shailesh Patel – innovative mind and visionary entrepreneur
• Legacy: From small manufacturing setup in 1985 to ISO-certified manufacturer serving 3,500+ customers

Business Model:

Product Portfolio – Three Core Business Verticals:

1. Display Counters (Primary Business Line)
   • Display cases for sweets, bakery items, namkeen, fast food
   • Chaat counters, dry fruits display, snacks display
   • Panipuri counters, sweet corn display, ice cream display
   • Shrikhand and dairy product display counters
   • Glass display cabinets for retail and food service
   • Customers: Bakeries, sweet shops, restaurants, supermarkets, retail outlets
2. Commercial Kitchen Equipment
   • Cooking ranges and burners
   • Exhaust hoods and ventilation systems
   • Work tables and preparation counters
   • Plate racks, trolleys, and storage systems
   • Kitchen sinks and drainage equipment
   • LPG pipeline design and installation services
   • Customers: Hotels, restaurants, cafes, food courts, catering businesses
3. Commercial Refrigeration Equipment
   • Double door refrigerators
   • Four door vertical refrigerators
   • Glass door display refrigerators
   • Under-counter refrigerators
   • Freezers and cold storage solutions
   • Visi coolers for beverages
   • Customers: Hotels, hospitals, cafes, food storage facilities

Manufacturing Capabilities:

• Single Manufacturing Facility: Located at Gondal, Gujarat (Plot No.1, Survey No.2/1 P4/P2, NH-27)
• ISO 9001:2015 Certified – Quality Management System
• ETL Certified – Export authorization for USA and Canada markets
• In-house Design & Manufacturing: Complete value chain from design to delivery
• Customization Capability: Tailor-made solutions for client-specific requirements
• Advanced Machinery: Well-equipped with tools and machines for precision manufacturing
• Quality Testing: Dedicated quality control and testing processes

Value Proposition:

• Customized Solutions: Tailor-made equipment designed for specific client needs and space constraints
• Innovation Focus: Innovative designs enhancing food visibility, freshness, and aesthetics
• Quality & Durability: Long-lasting products with minimal maintenance requirements
• Attractive Aesthetics: Visually appealing designs contributing to product beautification
• Energy Efficiency: Lower power consumption and operational costs
• Practical Designs: Smooth operations, weather resistance, hygienic construction
• Value for Money: Competitive pricing with premium quality

Revenue Model:

• Product manufacturing and sales (B2B model)
• Project-based customized solutions
• Installation and commissioning services
• After-sales support and maintenance services

Market Position:

• Established Player: 40 years of industry presence (since 1985)
• Customer Base: 3,500+ satisfied customers across diverse industries
• Geographic Reach: Pan-India presence + international markets (Dubai, Nepal, Australia, USA, Sri Lanka, UK)
• Brand Recognition: Riddhi brand enjoys high market share in display and kitchen equipment industry in India
• Certifications: ISO 9001:2015, ETL certified – enabling enterprise and export market participation
• Niche Focus: Specialized in display equipment for food and beverage industry
• Customer Testimonials: Strong reputation among clients like Sugar N Spice Foods, Sukhadia Sweets, Shree Guruprasad Restaurant

Operations:

Manufacturing Facilities:

• Location: Gondal, Rajkot, Gujarat (National Highway-27)
• Facility Type: Single integrated manufacturing facility
• Capabilities: Design, fabrication, assembly, testing, quality control
• Equipment: Advanced CNC machines, fabrication tools, welding equipment
• Capacity: Supports current ₹25 crore annual revenue; expansion planned via IPO

Geographic Reach:

• Domestic Market: Pan-India presence across multiple states
  • Gujarat (40% of revenue in YTD FY26)
  • Strong presence in West India, expanding to other regions
• International Markets: Exports to Dubai, Nepal, Australia, USA, Sri Lanka, UK
  • Direct sales to overseas customers
  • Sales through merchant exporters
  • Nascent export stage with growth potential

Customer Segments:

• Hotels, resorts, and hospitality chains
• Restaurants, cafes, and food courts
• Bakeries, sweet shops, and cake shops
• Supermarkets and retail chains
• Ice cream parlours and dessert shops
• Hospitals and institutional catering
• Food processing and catering businesses

Workforce:

• 55 employees on payroll (as of August 31, 2025)
• Skilled workforce in manufacturing, fabrication, welding
• Design and engineering team for customization
• Quality control and testing personnel
• Sales and customer service team
• Small but efficient team structure

Supply Chain:

• Raw Material Sourcing: Primarily from Gujarat-based suppliers (98.7% procurement)
• Key Inputs: Stainless steel, compressors, glass, refrigeration parts, electrical components
• Supplier Concentration: Top 5 suppliers account for 27-40% of purchases (FY23-YTD FY26)
• Inventory Management: Finished goods, work-in-progress, raw materials
• Logistics: Direct delivery to customers, installation services

Culture & Vision:

• Mission: Deliver innovative and customized solutions for commercial kitchen and display requirements
• Vision: Become most renowned display equipment provider in India and globally
• Values: Quality, innovation, customer-centricity, long-term relationships
• Focus: Customer satisfaction, product excellence, continuous improvement

COMPANY STRENGTHS

1. Strong Financial Performance – Exceptional Growth in Revenue & Profitability:

• Revenue Growth: FY23 (₹17.54 cr) → FY24 (₹18.90 cr, 8% YoY) → FY25 (₹25.09 cr, 33% YoY) – demonstrating strong acceleration
• 4M FY26 (Apr-Jul 2025): ₹11.23 cr revenue (annualized ₹33.7 cr) – continued momentum
• Profit After Tax (PAT) Explosion: FY23 (₹0.21 cr, 1.18% margin) → FY24 (₹2.02 cr, 10.69% margin) → FY25 (₹4.14 cr, 16.53% margin, 105% YoY growth)
• 4M FY26 PAT: ₹2.00 cr (17.82% margin) – sustained high profitability
• EBITDA Margins: FY25 at 27.68%, 4M FY26 holding strong – indicating operational efficiency
• RoCE (Return on Capital Employed): FY23 (11.26%) → FY24 (56.15%) → FY25 (58.40%) – exceptional capital efficiency
• EPS Growth: FY23 (₹0.35) → FY24 (₹3.43) → FY25 (₹6.84) – nearly 20X growth in 2 years
• Average RoNW: 42.41% over last three fiscals – outstanding return on net worth
• Profitability Trigger: FY24 onwards surge attributed to cost management, value-added tailor-made products, operational leverage

2. 100% Fresh Issue – No OFS, Complete Capital for Growth:

• Entire ₹24.68 crore is fresh issue with zero Offer for Sale (OFS)
• All IPO proceeds going directly to company operations, not to promoters/investors
• Demonstrates genuine growth capital requirement and expansion intent
• Promoters retaining full stake – strong skin-in-the-game and alignment with shareholders
• Clean capital structure post-IPO with no dilution concerns
• Funds allocated to productive assets: 39.7% machinery, 41.6% working capital, 18.7% general corporate
• Positive indicator vs many SME IPOs with heavy OFS components

3. Established Legacy & Customer Base – 40 Years of Operations:

• Legacy Since 1985: 40 years of operational history providing credibility and market trust
• 3,500+ Satisfied Customers: Large, diversified customer base reducing single-client dependency
• Brand Equity: Riddhi brand enjoys high market share in display and kitchen equipment industry in India
• Customer Testimonials: Strong endorsements from reputed clients (Sugar N Spice Foods, Sukhadia Sweets, Shree Guruprasad Restaurant, White Potato Baroda)
• Repeat Business: Long-term customer relationships with repeat orders and referrals
• Customer Loyalty: Products known for durability, minimal maintenance, aesthetic appeal, smooth operations
• Geographic Presence: Pan-India + international markets (Dubai, Nepal, Australia, USA, Sri Lanka, UK)

4. Customization Capability & Value-Added Solutions:

• Tailor-Made Products: Ability to design equipment as per specific client requirements and space constraints
• Kitchen Layout Design: Provide complete project design and execution services
• LPG Pipeline Installation: Comprehensive solutions beyond just equipment supply
• Diversified Product Range: 70+ products across display counters, kitchen equipment, refrigeration
• Innovation Focus: Innovative designs enhancing food visibility, freshness, nutritional preservation
• High-Value Products: Shift towards value-added products driving margin expansion (PAT 1.18% to 16.53%)
• Competitive Differentiation: Customization sets apart from standardized mass manufacturers

5. Quality Certifications & Export Capabilities:

• ISO 9001:2015 Certified: International quality management standard ensuring consistent product quality
• ETL Certification: Authorization of Mark for exports to USA and Canada markets
• Quality Testing: Dedicated quality control processes and testing on parameters (corrosion resistance, construction quality, smooth edges, spacious designs, easy cleaning)
• Export Market Access: Serving international customers in Dubai, Nepal, Australia, USA, Sri Lanka, UK
• Compliance Ready: Certifications enable participation in enterprise tenders and government contracts
• Brand Credibility: ISO and ETL certifications enhance trust among large institutional customers

6. Niche Industry with Strong Tailwinds – Growing Food Service Sector:

• Organized Retail Growth: Expansion of modern trade formats, supermarkets, hypermarkets driving demand for display equipment
• Food Service Boom: Rising restaurant chains, cafes, cloud kitchens, QSRs requiring commercial kitchen equipment
• Tier 2/3 City Expansion: Food chains expanding beyond metros into smaller cities – new customer base
• Hospitality Sector Recovery: Post-pandemic recovery in hotels, restaurants, catering driving capex cycles
• Infrastructure Upgrades: Existing outlets refurbishing and upgrading equipment creates replacement demand
• Bakery & Sweets Market: Growing organized bakery chains, sweet shops requiring specialized display counters
• Make in India: Government push for domestic manufacturing benefiting Indian equipment manufacturers over imports

7. Healthy Balance Sheet & Improving Financial Metrics:

• Net Worth Growth: FY23 (₹1.36 cr) → FY25 (₹10.36 cr) → Jul FY26 (₹12.36 cr) – 9X growth in 2.5 years
• Post-IPO Net Worth: Expected ₹35+ crore after IPO infusion – strong equity base
• Debt Management: Total debt FY23 (₹6.65 cr) → FY25 (₹10.79 cr) → Jul FY26 (₹8.64 cr) declining
• Post-IPO Debt-Free: IPO proceeds for working capital will reduce debt dependency
• P/BV Valuation: At ₹100, P/BV of 2.33 based on post-IPO NAV of ₹42.88 – reasonable for SME
• P/E Valuation: FY26 annualized P/E of 14.39 – attractive for 33%+ growth and 17%+ margins
• Cash Generation: Improving cash flows with working capital management

KEY RISKS & CHALLENGES

1. High Customer Concentration Risk – Top 10 Customers Account for 65% of FY25 Revenue:

• Top 5 Customer Dependence: FY23 (29.48%) → FY24 (39.24%) → FY25 (41.57%) → YTD FY26 (60.23%) – increasing concentration
• Top Single Customer: YTD FY26 (20.89%), FY25 (12.04%), FY24 (16.14%), FY23 (11.01%) of total revenue
• No Long-Term Agreements: Company does not have binding contracts with major customers
• Loss Impact: Departure of any top customer would materially impact revenue and profitability
• Dependency Risk: Top 10 customers contribute 65% of FY25 revenue – high vulnerability
• Pricing Power: Limited due to customer concentration and absence of long-term contracts
• Industry Pattern: B2B commercial equipment sales often project-based and lumpy

2. Single Manufacturing Facility Risk – Geographic & Operational Concentration:

• Only One Facility: Entire manufacturing operations concentrated in Gondal, Gujarat
• Disruption Vulnerability: Fire, natural disaster, labor unrest, regulatory issues could halt all production
• No Backup Capacity: Absence of alternate manufacturing site creates business continuity risk
• Capacity Constraints: Single facility limits scalability for large order execution
• Geographic Dependence: Gujarat accounted for 40.24% of YTD FY26 revenue, 37.79% in FY25 – regional concentration
• Political/Economic Risk: Any adverse developments in Gujarat region impacts operations directly
• Scale Disadvantage: Larger competitors with multiple facilities have operational flexibility
• Expansion Limitation: IPO proceeds allocated to machinery at existing facility, not new locations

3. High Supplier Concentration & Raw Material Dependency:

• Supplier Concentration: Top 5 suppliers account for 27-40% of total purchases (FY23: 27.36%, FY24: 29.92%, FY25: 34.39%, YTD FY26: 40.71%) – increasing dependence
• Gujarat Supplier Dominance: 98.7% of raw materials procured from Gujarat-based suppliers
• Supply Disruption Risk: Issues with major suppliers could halt production and order fulfillment
• Price Volatility: Stainless steel, compressors, glass, refrigeration components subject to commodity price fluctuations
• Limited Bargaining Power: High concentration limits negotiation leverage for favorable pricing terms
• Alternative Sourcing: Switching suppliers may impact quality consistency and delivery timelines
• Import Dependence: Some specialized components (compressors, refrigeration parts) may be import-dependent

4. High Working Capital Intensity – Extended Receivables & Inventory Days:

• Trade Receivables: ₹12.03 crore as of July 31, 2025 (up from ₹10.32 cr in FY25) – 48-50% of revenue
• Debtor Days: 119-150 days indicating extended credit periods to customers
• Stock Days: 152-195 days – high inventory holding period
• Working Capital Allocation: ₹10.26 crore (41.6% of IPO) for working capital – largest use of funds
• Cash Flow Strain: FY25 negative operating cash flow of ₹1.04 crore, FY24 negative ₹0.27 crore
• Collection Risk: If receivables not collected timely or at all, liquidity challenges and bad debts
• Liquidity Pressure: High working capital needs continuous funding support
• Payment Terms: B2B customers often demand extended credit, impacting cash cycles

5. Intense Competition from Larger, Established Players:

Organized Competitors:

• Western Refrigeration Pvt Ltd: One of South East Asia’s largest commercial refrigeration manufacturers, member of Hoshizaki Corporation (Japan), massive scale advantage
• Ice Make Refrigeration Limited: Listed company, 30+ years, industrial and commercial refrigeration leader
• Elanpro: High-performance refrigeration systems serving hospitality, retail, catering
• Blue Star Limited: ₹10,000+ crore revenue, diversified commercial refrigeration and air conditioning giant
• Voltas Limited: Tata Group company, ₹10,000+ crore revenue, commercial refrigeration division
• Alister Equipments, Castle Kitchens, Relief Kitchen Systems, Gilly Professional Kitchens: Established kitchen equipment players

Unorganized Sector:

• Numerous small-scale local manufacturers and fabricators
• Price competition from low-cost unorganized players
• Regional players with strong local networks

Competitive Pressures:

• Riddhi’s ₹25 crore revenue vs Blue Star/Voltas ₹10,000+ crore – 400X size gap
• Larger players have nationwide presence, multiple facilities, extensive dealer networks
• Price competition limits margin expansion
• Brand recall and market share challenges against legacy brands

6. Regulatory & Compliance Risks – Pending Approvals:

• Pending Statutory Approvals: Some regulatory and environmental approvals pending for existing and proposed facilities (as mentioned in risk factors)
• Compliance Burden: Multiple jurisdictions – environmental, safety, labor laws, factory regulations
• Environmental Norms: Manufacturing emissions, waste disposal, effluent treatment compliance required
• Labor Laws: Factory Act, Shops and Establishments Act, ESI, PF, minimum wages compliance
• Penalty Risk: Non-compliance or delayed approvals can result in fines, operational disruptions
• Export Compliance: ETL certification maintenance, export regulations for international shipments
• GST & Tax Compliance: Tax proceedings of ₹54.15 lakh outstanding (as mentioned in financials)
• Expansion Constraints: Pending approvals may delay capacity expansion or new product launches

7. SME Listing Challenges – Limited Liquidity & Merchant Banker Track Record:

• BSE SME Platform: Lower trading volumes compared to mainboard, liquidity constraints
• Exit Difficulty: Limited buyer interest during market downturns, wider bid-ask spreads
• Valuation Discovery: Price discovery challenges, higher volatility
• Institutional Interest: Limited participation from large institutional investors in SME stocks
• Analyst Coverage: Minimal research coverage compared to mainboard companies
• Merchant Banker Track Record: Jawa Capital’s past performance – 4 out of 7 listings opened at discount, only 2 at premium (20-50%)
• Migration Timeline: Small post-IPO paid-up capital of ₹8.64 crore indicates longer gestation period (3-5 years) for mainboard migration
• Fully Priced: Based on recent financials, issue appears fully priced at P/BV 2.33 and P/E 14.39

CONCERNS

Major Red Flags and Investment Concerns: The company faces significant structural risks that investors must carefully evaluate.

(1) Extreme Customer Concentration (65% from Top 10): Top 5 customers account for 60% of YTD FY26 revenue with a single customer contributing 21%, and the company has no long-term agreements with any of these clients—loss of even one major customer could devastate revenue and profitability.

(2) Single Facility Operational Risk: Entire manufacturing concentrated in one facility in Gondal, Gujarat with no backup capacity; any disruption (fire, regulatory issues, natural calamity) would halt all operations.

(3) Geographic Revenue Concentration (40% from Gujarat): Both manufacturing and 40% of sales concentrated in Gujarat region, creating double exposure to state-specific risks.

(4) High Supplier Concentration (98.7% procurement from Gujarat, Top 5 = 40%): Supply chain heavily concentrated regionally and among few suppliers, creating severe disruption and pricing risks.

(5) Severe Working Capital Strain: Debtor days of 119-150, stock days of 152-195, negative operating cash flows in FY24-25, and 41.6% of IPO (₹10.26 cr) needed for working capital indicate structural liquidity challenges.

(6) SME Listing Liquidity Risk: Merchant banker Jawa Capital has mixed track record (4 out of 7 past listings opened at discount), small post-IPO paid-up capital of ₹8.64 crore means 3-5 year gestation for mainboard migration, and BSE SME platform has limited trading volumes.

(7) Fully Priced Valuation: At P/BV 2.33 and P/E 14.39 (FY26 annualized), the issue appears fully priced given the concentration risks, single facility vulnerability, working capital challenges, and SME listing constraints—leaves limited margin of safety for retail investors despite strong growth trajectory.

POSITIVES

Key Investment Highlights and Growth Strengths: The company demonstrates exceptional financial performance with significant positive catalysts.

(1) Outstanding Growth & Profitability: Revenue surged 33% YoY in FY25 to ₹25.09 cr with 4M FY26 indicating ₹33.7 cr annualized run-rate; more impressively, PAT exploded 105% YoY to ₹4.14 cr (16.53% margin) from just ₹0.21 cr (1.18% margin) in FY23—nearly 20X profit growth in 2 years—with 4M FY26 maintaining 17.82% margins demonstrating sustainability.

(2) Exceptional Capital Efficiency: RoCE improved from 11.26% (FY23) to 58.40% (FY25) with average RoNW of 42.41% indicating outstanding capital deployment; EPS grew from ₹0.35 (FY23) to ₹6.84 (FY25) to annualized ₹9.72 (FY26)—validating business model scalability.

(3) 100% Fresh Issue with Clean Capital Structure: Entire ₹24.68 cr is fresh capital (zero OFS) going directly to productive uses—39.7% for new CNC machinery (capacity expansion), 41.6% for working capital, 18.7% general corporate—with promoters retaining 100% ownership demonstrating strong skin-in-the-game and alignment with shareholders.

(4) 40-Year Legacy with 3,500+ Customer Base: Established brand since 1985 with ISO 9001:2015 and ETL (USA/Canada export) certifications, serving diversified customer base across hotels, restaurants, bakeries, retail chains reducing single-industry dependency, with strong customer testimonials and repeat business model.

(5) Customization Capability & Value-Added Products: Differentiated through tailor-made solutions and project-based kitchen design services rather than standardized mass manufacturing; shift towards high-value customized products drove margin expansion from 1.18% (FY23) to 16.53% (FY25)—creating competitive moat against commodity players.

(6) Strong Industry Tailwinds: Growing organized retail (supermarkets, modern trade), booming food service sector (restaurants, QSRs, cloud kitchens, cafes), Tier 2/3 city expansion by food chains, post-pandemic hospitality sector recovery, and infrastructure upgrade cycles in existing outlets—all driving demand for commercial kitchen and display equipment.

(7) Reasonable Valuation for High Growth: At P/E 14.39 (FY26 annualized) and P/BV 2.33, valuation appears reasonable for a company delivering 33%+ revenue growth, 105% PAT growth, 17%+ margins, and 58% RoCE—especially with fresh capital for capacity expansion through advanced CNC machinery creating operating leverage for future growth.