Shree Refrigerations IPO Subscription status & Overview

Core Business & Overview

• Founded in 2006 and recently converted into a public limited company (December 2023), Shree Refrigerations operates from a modern facility in Karad, Maharashtra.
• Specializes in custom-designed HVAC and refrigeration systems, including:
  • Marine chillers and air-conditioning systems (for warships and submarines)
  • Industrial process chillers, test equipment, spray-dampening systems
  • Electrical control panels and heavy fabrication services.
• Holds critical defense accreditations and is an approved supplier to the Indian Navy, registered under both the Directorate of Electrical Engineering and the Directorate of Quality Assurance – Warship Projects.

Strengths

1. Niche focus on mission-critical defense applications
   Deep sector expertise in defence-grade HVAC systems gives the company a high‑entry-barrier niche that few competitors serve.
2. Certifications & reputation for quality
   ISO 9001:2015 certification, defense approvals, and innovation awards (e.g. GS Parkhe Award, Brig SB Ghorpade Award) highlight its quality credentials.
3. Strong order book and future visibility
   At February–May 2025, backlog stood at ₹231–248 crore—nearly double FY 25 revenue—supporting consistent near-term visibility.
4. Undercapacity offers expansion potential
   Capacity utilisation is modest in industrial chillers (~39%) and zero for air‑cooled marine chillers, providing headroom for scaling without large CapEx.

Potential Risks

1. High client concentration
   Over 83% of FY25 revenue came from marine chillers, and nearly 77% of business from government / Indian Navy orders, making the company vulnerable to contract delays or cancellation.
2. Liquidity and working capital stress
   CARE notes extended operating cycles (net cash operating outflows for five straight years), working capital utilization of ~88%, and a cash balance of just ₹0.97 crore as on Mar 31, 2024. Execution delays may squeeze liquidity.
3. Modest scale and limited diversity
   The company remains small relative to large-listed HVAC peers with revenue around ₹99 crore in FY25 and revenue scale still modest, as noted by CRISIL and Bloomberg.
4. Policy and tender dependence
   Reliance on India’s defense budget and procurement policies: any policy shifts or reprioritization may significantly affect order flow and future revenues.

Financial Performance Table

Financial Year	Revenue	Net Profit	Total Assets
FY 2023	50.38	2.57	94.32
FY 2024	80.30	11.53	124.11
FY 2025	98.73	13.55	185.59

Revenue

• FY 2023: ₹50.38 Cr
• FY 2024: ₹80.30 Cr (↑ 59.4% growth)
• FY 2025: ₹98.73 Cr (↑ 22.97% growth)

The company has shown strong and consistent revenue growth, especially between FY23 and FY24.

Net Profit

• FY 2023: ₹2.57 Cr
• FY 2024: ₹11.53 Cr (↑ 348.64% growth)
• FY 2025: ₹13.55 Cr (↑ 17.5% growth)

Profit saw a massive jump in FY24, indicating strong operational efficiency and profitability improvements.

Total Assets

• FY 2023: ₹94.32 Cr
• FY 2024: ₹124.11 Cr (↑ 31.55% growth)
• FY 2025: ₹185.59 Cr (↑ 49.56% growth)

The asset base has expanded significantly, showing that the company is investing for future growth and scalability.

✅ Pros of Shree Refrigerations IPO

The company operates in a niche segment of defense-grade refrigeration systems with limited competition. It has strong institutional clients like the Indian Navy and Defence Ministry ensuring reliable orders. Revenue and profit have grown significantly between FY23 and FY25. The company maintains healthy profit margins, indicating operational efficiency. Its debt-to-equity ratio is low, reflecting financial stability. A strong order book of over ₹231 crore provides revenue visibility. The leadership team is experienced and recognized for innovation. There is ample scope for future growth due to underutilized capacity.

⚠️ Cons of Shree Refrigerations IPO

A large portion of revenue comes from a few government clients, creating high dependence. The business is working capital intensive, which can cause liquidity strain. The company is relatively small in scale and lacks global presence. It depends heavily on government policies and defense budgets. The IPO includes an Offer-for-Sale, indicating partial promoter exit. It has limited brand visibility among retail investors. It became a public limited company only recently, lacking a long public track record.