Bonfiglioli Transmissions

Bonfiglioli Transmissions

By Geetanjali Kedia
about 3 days ago

IPO Size: Rs. 2,534 cr, entirely Offer for Sale (OFS)  

  • By Italian parent (100% stake to shrink to 77% post IPO)

Price band: Rs. 558-586 per share

M cap: Rs. 11,017 cr (IPO is 23% of m cap)

IPO Date: Thu 15th Oct to Mon 19th Oct 2026, Listing Fri 23rd Oct 2026

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

 

Precision Engineered Industrial Products Maker

Bonfiglioli Transmissions is a Kancheepuram, Tamil Nadu-headquartered wholly-owned subsidiary of 70-year-old Italian multi-national company (MNC) Bonfiglioli SpA, operating in 80 countries. Bonfiglioli manufactures gear motors, gearboxes and drive systems across 3 plants in India – 2 in Tamil Nadu and 1 in Maharashtra, with ~75% capacity utilization. In Oct 2025, it commenced manufacturing electric motors at Tamil Nadu and is establishing a greenfield plant in Maharashtra for heavy-duty gearboxes.

 

Revenue Mix

Nearly 70% of Rs. 2,000 cr revenue comes from India, 15% from US and balance from Italy, Germany, China etc. 65% revenue comes from direct sales to original equipment manufacturers (OEMs), 20% through dealer network and 15% from sale to group companies.

It manufactures following products for the three industrial sectors:

  • Industry and Automation (41% of revenue): Low, medium and heavy-duty gear motors, gearboxes, electric motors, variable frequency drives, servo motors and drives, precision drives for robotics, commanding 25% market share in India
  • Off-Highway Mobility (25% revenue): Drives used in construction equipment, material handling, mining, agri machinery etc. enjoying 32% market share
  • Wind (30% revenue): Yaw and pitch drives for Suzlon, Nordex, Senvion Wind, enjoying 68% market share, but segmental revenue growth has slowed in past couple of years  

 

High Royalty to Parent

Bonfiglioli pays 4.5% annual royalty to parent, which is on the higher side, and has been rising gradually from 4.2% in CY22. Most MNCs in India like Bosch, ABB, Schaeffler, Hyundai, LG Electronics, HUL, Maruti, Timken India, Tenneco Clean Air pay about 2% to 3% of topline.

 

Localisation Strengthens Margins

While topline growth has been in single digits, margins have strengthened due to higher share of localized sourcing (now at 68%). On CY26 revenue of Rs. 2,014 cr, Bonfiglioli’s EBITDA was Rs. 371 cr (18% EBITDA margin) and net profit stood at Rs.238 cr, translating into 11.8% net margin and an EPS of Rs. 12.65. For H1CY26, revenue grew 18% YoY to Rs. 1,132 cr, with PAT up 29% YoY to Rs. 149 cr and net margin expanding to 13.1%, up from 10.5% in CY24. EPS for H1CY26 stood at Rs. 7.90. 

 

Mixed Track Record of MNC IPOs

In the past two years, 5 MNCs undertook IPOs for their Indian subsidiaries, all OFS. Of these only 2 have rewarded investors:

  • Orkla India’s Rs. 1,667 cr OFS by Norwegian parent in Nov 2025, is down 25% from IPO price
  • Hyundai Motor’s Rs. 27,870 cr OFS in Oct 2024 has given nil gains in 2 years
  • Carraro India’s Rs.1,250 cr OFS by Italian promoter in Dec 2024 at Rs. 704 per share is down 30% in last 21 months
  • LG Electronics has delivered 50% return to shareholders from its Rs.11,607 cr IPO in Oct 2025 at Rs. 1,140 per share
  • Tenneco Clean Air’s Rs. 3,600 cr OFS by US parent in Nov 2025 at Rs. 397 per share has given 17% gain in last 11 months.