IPO Size: Rs. 230 cr, Entirely Fresh Issue

• for working capital Rs. 127 cr
• for inorganic growth Rs. 30 cr, after making 4 acquisitions in past 8 years

Price band: Rs. 181-191 per share

M cap: Rs. 849 cr, implying 27% dilution

IPO Date: Mon 29^th Sep to Wed 1^st Oct 2025, Listing Tue 7^th Oct 2025

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

Engineering Solutions for Pharma Industry

Fabtech Technologies is a Mumbai-based turnkey engineering solution provider to pharmaceutical, biotech and healthcare companies. Only 15% of Rs. 327 cr revenue is generated from India, and balance 85% from emerging markets like Middle East, Africa and South Asia. Thus, company’s presence is concentrated in geographies facing weaking economic factors and geopolitical unrest leading to currency risk.

Order Book

Post Rs. 120 cr order inflow in the first 4 months of FY26, outstanding order book rose to Rs. 904 cr, as of 31.7.25, implying a book-to-bill of 2.8x. Top 5/10 projects account for 62% and 87% of the order book respectively, implying high client concentration risk.

One-time Gains spurts FY25 Profits

On Rs. 327 cr sales, outstanding debtors as of 31.3.25 is at Rs. 151 cr, implying 5.5 months outstanding. Of this, Rs. 37 cr or 25% of debtors is outstanding for over 1 year, with hardly much provision, which is extremely risky. Moreover, a significant part of sales (20%) and purchases (26%) is to/from related parties.

In FY25, PAT was reported at Rs. 46 cr, including Rs. 18 cr exceptional gain, on sale of unlisted shares. Excluding this, net margin would have been around 10%, as against the reported margin of 14%. Thus, reported EPS of Rs. 14.3 is adjusted to about Rs. 10, excluding the one-time gain.

Stretched Pricing

M cap of Rs. 849 cr and an enterprise value (EV) of Rs. 862 cr, implies an EV/EBITDA multiple of 18x and a PE multiple of 19x, on historic basis, which is quite expensive for the small scale of operations, ageing debtors, limited number of clients and nano cap status.

In Jan 2024, company had raised Rs. 16 cr via private placement from individual investors, at Rs. 90 per share. Current share price is more than double, in about 20 months, when core profits have not doubled. Thus, IPO pricing is seen very expensive.