Zetwerk

Zetwerk

By Geetanjali Kedia
about 2 days ago

IPO Size: Rs. 5,012 cr  

  • Fresh Issue of Rs. 2,830 cr (11% dilution) for (i) repaying Rs. 2,160 cr of Rs. 3,366 cr gross debt as of 31.8.26 (ii) unidentified acquisitions and general corporate purpose
  • Offer for Sale (OFS) of Rs. 2,182 cr by 5 investors (34% combined stake to drop to 25%) and by promoters (21% stake to shrink to 16% post IPO)

Price band: Rs. 143-151 per share

  • Only 10% allocation for retail investors, as company reported loss since FY24

M cap: Rs. 25,582 cr (IPO is 20% 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.

 

‘Universal Factory’ Platform

Zetwerk Manufacturing is a 9-year-old Bengaluru based asset-light manufacturing platform for industrial and consumer goods companies. It has 26 own plants in 4 countries (India, Spain, Germany, US) and also aggregates manufacturing capacity across third-party suppliers, through its proprietary technology backbone. Company serves 1,800 customers in India (82% of revenue) and US (14% of revenue) across utilities, renewable, oil and gas, consumer electronics, infra, aerospace, defence, with key value proposition being accelerating time to market with optimised product quality. Orders in hand Rs. 13,062 cr as of 30.6.26, implying a book to bill ratio of 0.75x on trailing twelve month revenue of Rs. 17,382 cr.

 

Impressive Topline, but Bottomline in Red

While growth in the past 9 years has been quick, profitability of business model remains to be proven. New orders of Rs. 23,074 cr in FY26 led to annual revenue of Rs. 15,913 cr with adjusted EBITDA of Rs. 421 cr, implying mere 2.6% operating margin.

For Q1FY27, revenue was Rs. 4,118 cr with 2.5% EBITDA margin. Due to Rs. 126 cr finance cost and Rs. 66 cr depreciation in Q1FY27, without any exceptional items, bottomline was in the red, with net loss of Rs. 64 cr.

 

Capital Intensive Business

While company likes to call itself ‘asset-light’, the business requires capital for fixed assets, working capital as well as to fund losses. Since inception, company has raised close to Rs.9,900 cr, with current net worth being just Rs. 3,928 cr, as of 30.6.26.

ssssNet working capital outstanding have almost doubled in Q1FY27 from Rs. 711 cr as of 31.3.26 to Rs. 1,374 cr as of 30.6.26. Working capital days are also on a steady rise from 11 days in FY24 to 16 days in FY26 and to 30 days in Q1FY27. Gross debt rose to Rs. 3,366 cr as of 31.8.26, from Rs. 1,942 cr as of 30.6.26 as working capital doubled. Besides higher working capital, a Rs. 88 cr debtor payment from a Bangladesh customer is pending since FY25.