Aditya Infotech
IPO Size: Rs.1,300 cr
- Fresh Issue of Rs. 500 cr for debt repayment Rs. 375 cr of Rs.423 cr gross debt
- Offer For Sale (OFS) of Rs. 800 cr by THE promoters (93% stake to reduce to 77%)
Price band: Rs. 640-675 per share
- 75% reserved for institutional investors and only 10% for retail, as cash and equivalents exceeded net worth in FY23
M cap: Rs. 7,912 cr, implying 16% dilution
IPO Date: Tue 29th Jul to Thu 31st Jul 2025, Listing Tue 5th Aug 2025
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Domestic CCTV Camera Maker & Seller
Aditya Infotech is India’s largest video security and surveillance products and solutions company, with 21% market share, marketing products such as under ‘CP Plus’ brand. It sells products such as closed circuit television (CCTV) cameras, network video recorders (NVR), digital video recorders (DVR), pan-tilt-zoom (PTZ) cameras, primarilty in the domestic market, through a network of 1,000+ distributors, accounting for 80% of Rs. 3,100 cr topline. Balance 16% revenue is generated from projects business and 4% from e-commerce, with its famous marketing tagline ‘upar wala sab dekh raha hain’.
Largest Manufacturer Outside China
Company’s sole manufacturing facility at Kadappa, Andhra Pradesh, is the world’s 3rd largest, with an installed capacity of 17.20 million units per annum. Having utilised 77% capacity in FY25, it is looking to expand capacity, with capital work in progress of Rs. 17 cr, as of 31.3.25.
On 18th Sep 2024, company purchased balance 50% stake in the manufacturing joint venture with Dixon Technologies, named AIL Dixon Technologies, for Rs. 248 cr, making it a wholly-owned subsidiary. 73 lakh shares were allotted at Rs. 340 per share to Dixon, giving it 6.6% ownership in Aditya Infotech.
Regulatory Tailwinds
Company used to distribute Chinese major and world #2 Dahua’s products in India, which accounted for ~25% of revenue, till FY25. With effect from 9th April 2025, Ministry of Electronics and Information Technology (MEITy), India, has mandated STQC certification for sale of CCTV cameras in India. Due to this, Dahua distribution is terminated. But company views it as an opportunity to grow its own label and higher-margin CP Plus, in view of overall waning Chinese competition in the market.
It has also entered into a master collaboration agreement with L&T Semiconductor Technologies, for developing indigenous Indian IP SoCs and advanced AI IP CCTV products.
Single-Digit Operating Margin
Due to lack of any technological product superiority, with 90% of raw material imported from China, EBITDA margin is in single digit, between 8-8.5%. Despite production volume rising 34% YoY in FY25, revenue rise was restricted to 12% YoY to Rs. 3,112 cr, highlighting price erosion risk in electronics. Despite double digit revenue growth, PBT before exceptional item remained stagnant YoY at Rs.185 cr, implying 5.9% margin.
Due to non-cash gain of Rs. 249 cr on AIL Dixon acquisition, PAT was reported at Rs. 351 cr. Net worth also rose to Rs. 1,018 cr, as of 31.3.25, from Rs. 424 cr as of 31.3.24, due to fair value changes on acquisition. Its working capital of 60 days is well-managed.
In-line Pricing
Lower finance expense on debt repayment, leads to estimated FY26E PAT of about Rs. 210 cr, with 5% net margin, translating into a PE multiple of 38x on current year basis. This makes it fully valued. There are no comparable peers, and it will be incorrect to benchmark with electronics manufacturing services (EMS) companies, as neither the growth rates are comparable nor do PLI-benefit accrue to Aditya. Since the industry is fast growing, with expected 15% CAGR over the next few years, Aditya’s growth will be solely volume-driven, in absence of any intellectual property.
29th Jul 2025 at 10:54 pm
29th Jul 2025 at 10:20 pm