- Our view
- Subscribe
- Market cap then
- ~INR 335.58 Cr.
- Price band
- INR 133 to 140 per share
Airfloa Rail Technology Ltd. makes rolling-stock components and turnkey railway interiors, and also serves aerospace and defence customers. Minerva Capital Research Solutions recommends Subscribe to its IPO, citing the INR 376 Cr. order book, railway project experience and expansion into aerospace and defence; the issue is valued at 13.1x FY25 PAT.
About Airfloa Rail Technology
Incorporated in 1998 in Chennai, Airfloa Rail Technology manufactures components for Indian Railways rolling stock and undertakes turnkey interior-furnishing projects for railway production units and coach factories, including Integral Coach Factory. It also makes engineered components for aerospace and defence, including AMCA ground simulators for HAL and body manufacturing for artillery, tanks and body armour. The company operates two manufacturing units in Chennai and Kancheepuram, with installed capacity of 6,220 nos. in FY25.
Airfloa Rail Technology IPO Details
| Particulars | Details |
|---|---|
| Price Band (INR) | 133 to 140 |
| Face Value (INR) | 10 |
| Implied M.Cap (INR Cr.) | 335.58 |
| Exchange | BSE SME |
| Min. Lot Size (Retail | HNI) | 2,000 | 3,000 |
| Issue Opens on | 11-Sep’25 |
| Issue Closes on | 15-Sep’25 |
| Listing Date | 18-Sep’25 |
| Fresh Issue of Shares (#) | 65,07,000 |
| Offer for Sale (#) | - |
| Funds Mobilized: Fresh Issue of Shares (INR Cr.) | 91.1 |
| Funds Mobilized: Offer for Sale (INR Cr.) | 0.0 |
The report lists 1,74,62,954 pre-issue shares and 2,39,69,954 post-issue shares.
Use of Issue Proceeds
- Machinery and equipment: INR 13.68 Cr. is allocated to capex for machinery and equipment.
- Repayment of borrowings: INR 6.00 Cr. is allocated to repayment of borrowings.
- Working capital: INR 59.27 Cr. is allocated to funding working capital.
- General corporate purposes: The amount is shown as [●] in the report.
Strengths
- Growing order book: The order book was INR 376 Cr. as on 28-Aug’25, compared with INR 306 Cr. as on 31-May’25. The report cites this increase as supporting revenue visibility and projects FY26 revenue of INR 300 Cr.+, indicating Y-o-Y revenue growth of 56% in FY26.
- Broader product mix: The company has expanded beyond railway rolling-stock manufacturing into turnkey solutions and aerospace and defence. Aeronautical, defence and other non-government revenue rose to 35.5% of FY25 revenue from 5% in FY24.
- Experience across railway projects: The report highlights work on projects including Vande Bharat, Agra Kanpur Metro, Vistadome Coach, AC EMU, RRTS Metro, Kolkata Metro and Sri Lankan DEMU.
- Experienced leadership: The report notes the promoters’ experience in the railway OEM industry and the appointment of Mr. Sudhanshu Mani, former General Manager of ICF and a key visionary behind Vande Bharat Express, as Technology Advisor.
Business and Order Book
Government railway rolling stocks contributed 64.5% of FY25 revenue, down from 95% in FY24. Aeronautical, defence and other non-government sales made up the remaining 35.5%. Integral Coach Factory contributed 53.6% of FY25 sales, and the top 10 customers accounted for 92.5%, indicating customer concentration.
| Order Book | INR Cr. | % |
|---|---|---|
| Railways – Govt. | 271 | 72% |
| Railways – Non Govt. | 90 | 24% |
| Aerospace & Defense | 15 | 4% |
| Total | 376 | 100% |
The report notes that the order book increased from INR 306 Cr. as on 31-May’25.
Airfloa Rail Technology Key Financials
| Particulars | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (excl. other inc.) | 95 | 119 | 192 |
| Growth Rate Y-o-Y % | (30.8%) | 25.4% | 61.3% |
| EBITDA (excl. other inc.) | 16.5 | 31.8 | 48.3 |
| EBITDA % (excl. other inc.) | 17.4% | 26.7% | 25.1% |
| PAT | 1.5 | 14.2 | 25.5 |
| PAT % | 1.6% | 11.6% | 13.3% |
| Debt (Short+Long) | 60 | 64 | 60 |
| Debt/Equity | 1.44x | 1.14x | 0.54x |
| NWC (days) | 180 | 268 | 239 |
| ROE % | 3.6% | 29.1% | 30.6% |
| ROCE % | 11.3% | 26.4% | 26.3% |
| CFO / EBITDA % | 60.9% | 10.9% | (9.2%) |
NWC includes Inventory, Receivables & Payables; & NWC days is computed as % of rev.
Revenue and PAT increased in FY25, while CFO / EBITDA was (9.2%) and NWC days were 239.
Management
- Venkatesan Dakshinamoorthy: Promoter, Chairman and Managing Director, with over 2 decades of experience and a significant contribution in handling operations.
- Manikandan Dakshnamoorthy: Promoter and Joint Managing Director; the report notes his strong technical expertise.
- Technology Advisor: Mr. Sudhanshu Mani, former General Manager of ICF and a key visionary behind Vande Bharat Express, has been appointed Technology Advisor.
Shareholding
| Particulars | Pre-Issue | Post-Issue |
|---|---|---|
| Promoter & Promoter Group | 74.40% | 54.20% |
| Public | 25.60% | 45.80% |
| Total | 100.00% | 100.00% |
IPO Valuation and Our View
The issue is valued at a P/E ratio of 13.1x based on FY25 PAT. The report considers the experienced promoter, order book, integrated railway solutions and expansion into aerospace and defence in its assessment. Minerva Capital Research Solutions recommends Subscribe to the issue.
- INR 133 to 140 per share
- IPO price band
- 13.1x
- P/E based on FY25 PAT
- Subscribe
- Recommendation
Key Risks
- Working capital intensity: Long lead times, custom fabrication and complex assembly require inventory to be held. Receivables may also be extended because government and PSU customer payments are linked to physical inspection and clearances.
- Aerospace and defence execution: The company’s ability to grow revenue from aerospace and defence is a key monitorable; this vertical represented INR 15 Cr. of the INR 376 Cr. order book.
- Employee attrition: The report identifies high average attrition as a monitorable: 40% in FY25, 81% in FY24 and 54% in FY23.
- Customer concentration: Integral Coach Factory contributed 53.6% of FY25 sales and the top 10 customers accounted for 92.5% of sales.
Our View
The recommendation rests on the order book, railway project track record and the company’s expansion into aerospace and defence, alongside a P/E of 13.1x based on FY25 PAT. Working-capital intensity, customer concentration and the ability to scale the newer verticals remain important monitorables. The IPO recommendation is Subscribe.
Standard disclosures
- Research Analyst has served as an officer, director or employee of subject company(ies): No
- We or our associates have received compensation from the subject company(ies) in the past 12 months: No
- We or our associates have managed or co-managed public offering of securities for the subject company(ies) in the past12 months: No
- We or our associates may have received compensation for investment banking or merchant banking or brokerage services from the subject company(ies) in the past 12 months –No
- We or our associates may have received compensation or other benefits from the subject company(ies) or third party in connection with the research report –No
- We or our associates or Research Analyst or his/her relative's financial interest in the subject company(ies)- No
- Nature of financial interest in subject company, if any –Nil
- We, our associates or Research Analyst have actual/beneficial ownership of 1% or more securities of the subject company (ies) at the end of the month immediately preceding the date of publication of Research Report – No
- Subject company (ies) may have been client during twelve months preceding the date of distribution of the research report-No.
- We or our Associates or Research Analyst are engaged in market making of subject company – No
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Regulatory disclosures
Minerva Capital Research Solutions is an independent investment advisory firm founded by Nishant Gupta(SEBI registration no. INH000018896).
Registration granted by SEBI and certification from NISM in no way promise or guarantee that the research recommendation will provide any assured, minimum or risk-free return to the investors.
The research report serves as general information and does not account for individual investment goals, financial situations, or needs. Minerva Capital Research Solutions strives to provide reliable and comprehensive information, sourced from what are believed to be trustworthy channels. However, this information has not been independently verified by Minerva Capital Research Solutions or its analysts, and no guarantees are made regarding its accuracy or completeness. The opinions expressed in this report reflect the views of the research analyst at the time of publication and may change over time. Minerva Capital Research Solutions and its affiliates as on date of publication of this report may or may not hold any positions in the securities discussed. The views presented are general and do not consider individual risk tolerance or investment objectives; therefore, readers should seek independent professional advice before making investment decisions. Minerva Capital Research Solutions does not guarantee a favorable outlook for any specific industry or sector and urges investors to consider all relevant risk factors, including their financial circumstances, before investing. The analyst certifies that their views accurately represent their personal opinions on the companies discussed and that no part of their compensation is tied to specific recommendations made in this report. This material should not be interpreted as an offer or solicitation to buy or sell securities in jurisdictions where such offers would be illegal. Consequently, brokerage and investment services described herein are not available to Canadian or U.S. persons. Distribution outside India requires prior written consent. This Research Report assumes that the recipient will assume all risks associated with its contents. If there are any disagreements or dissatisfaction with this report or its disclaimer, the only recourse is to cease using it. Minerva Capital Research Solutions and its affiliates will not be liable for any direct or indirect losses resulting from the use of this report. Recipients are required to adhere to these restrictions. The material is for the personal use of authorized individuals and does not constitute a solicitation or offer to buy or sell any securities in jurisdictions where such actions would be illegal.
For any queries or grievances: Mr. Nishant Gupta | Email: nishant.gupta@mcapital.in or guptanishant.iimi@gmail.com | Contact Number: 8171433387 | Website: www.mcapital.in | Twitter: @Mcapital_In
Rating rationale
Minerva Capital Research Solutions endeavors to provide objective opinions and recommendations. Ratings are assigned to stocks according to their fair value vs current market price and then categorizes them as Buy, Hold, Reduce, Sell. The performance horizon is one year unless specified and fair value is defined as analyst’s valuation for a stock.
- Buy:> 15%
- Hold: -5% to 15%
- Reduce: -15% to -5%
- Sell: <-15%