Zetwerk Prices a Rs 5,012 Crore IPO That Mostly Pays Debt

Zetwerk Manufacturing Businesses has set a price band of Rs 143 to Rs 151 a share for a Rs 5,012.3 crore IPO opening October 15. At the upper end the Bengaluru manufacturer is valued at Rs 25,583 crore ($2.64 billion), with listing due on the BSE and NSE on October 23.

The fresh issue is Rs 2,830 crore. Existing holders are selling 14.45 crore shares worth Rs 2,182.3 crore. Of the new money, Rs 2,160 crore is tagged to repay borrowings. The offer for sale is 49% larger than the August draft, so a bigger slice of this listing is cash coming off the cap table, not cash going into plants.

A Rs 5,012.3 Crore Issue at Rs 143 to 151

The company confirmed the band on October 12 after filing its red herring prospectus on October 11. One lot is 99 shares. A retail bid at Rs 151 costs Rs 14,949. Face value is Rs 1. Shares are due in demat accounts on October 22.

The fresh issue was Rs 2,600 crore in the updated draft papers filed in August. The offer for sale was 9.68 crore shares. Both legs moved up before the roadshow. Madhav Chanchani, co-founder of The Arc, put that against the rest of the primary calendar: “In a market where most of the Unicorns and even Reliance Jio had to cut their IPO size, interesting to see Zetwerk actually upsize its offering.”

The grey book is not treating the name as a frenzy print. Unofficial pre-listing quotes on October 12 sat well below the premiums on smaller issues opening in the same window, which is the pattern you get when the story is a large, loss-making book rather than a scarce lot.

THE OFFER AT THE UPPER BAND

Pre-issue equity is 1,50,67,72,659 shares. Promoters Amrit Pratik Acharya and Srinath Ramakkrushnan hold 20.66%. Public shareholders, including Peak XV Partners, Greenoaks Capital Partners, Accel India, D1 Capital Partners and Lightspeed Venture Partners, hold 79.34%.

Most of the Fresh Cash Goes to Lenders

The prospectus earmarks Rs 2,160 crore, 76% of the Rs 2,830 crore fresh issue, to repay or prepay borrowings. That is Rs 1,300 crore at the company and Rs 860 crore at nine subsidiaries. About Rs 670 crore is left for unidentified acquisitions, other strategic deals and general corporate purposes.

That mix is the listing in miniature. Zetwerk is not taking this cheque to pour a new foundry. It is taking it to lighten the interest stack after years of scaling a working-capital-heavy manufacturing network, then keeping a smaller pot for deals it has not named.

WHERE THE FRESH RS 2,830 CRORE IS MEANT TO GO

• Parent loans: Rs 1,300 crore to repay or prepay borrowings at Zetwerk Manufacturing Businesses.
• Nine subsidiaries: Rs 860 crore to repay debt sitting below the listed entity.
• Deals and general use: the leftover Rs 670 crore, including acquisitions that have not been identified.

A debt clean-up can cut interest cost on a thin-margin book. It does not, by itself, lift the 2.65% adjusted EBITDA margin the company reported for the year ended March 2026. Public holders will own a less levered platform. They will not own a newly funded capacity cycle.

A Larger Offer for Sale, Same 24 Sellers

Twenty-four selling shareholders are in the offer for sale. The headcount did not change from the draft. Eight institutions, including Peak XV Partners, Lightspeed Venture Partners, Accel and Kae Capital, increased the number of shares they plan to sell. The founders kept their sale at 1.42 crore shares each.

Lightspeed is the largest investor seller at 2.51 crore shares, then Peak XV at 2.34 crore. Accel India V is selling up to 1.2 crore. Kae Capital Fund and Kalysta Capital Fund together are selling up to 1.67 crore. Promoter-group vehicle Creovate Innovation is selling up to 2.30 crore. The promoter side, founders plus Creovate, accounts for 5.14 crore shares.

NAMED SELLERS IN THE OFFER FOR SALE

Those names do not exhaust the 14.45 crore share sale. Other holders among the 24 fill the rest. The proceeds of the offer for sale go to the sellers, not the company. For Peak XV, Lightspeed, Accel and Kae, this is a partial cash-out on a 2017-vintage manufacturing bet, timed to a public book that still does not show a profit.

Revenue Climbed 40.4%, the Loss Still Widened

Revenue from operations rose 40.4% to Rs 15,913.3 crore in FY26 from Rs 11,331.9 crore. The restated loss widened to Rs 1,606.2 crore from Rs 370.7 crore. Those two lines are why a simple price-to-earnings multiple cannot be written on this issue.

Most of the FY26 hole is accounting, not cash burn in the factories. Continuing operations booked an exceptional charge of Rs 835.8 crore tied to adjustments in the conversion ratio of share classes after the founders topped up ownership. Discontinued civil infrastructure work added an impairment of about Rs 453 crore. Continuing operations lost Rs 964.4 crore. Discontinued operations lost Rs 641.8 crore.

Strip the exceptionals and tax from the continuing book and the restated loss was Rs 41.1 crore, down from Rs 59.8 crore. Adjusted EBITDA rose to Rs 421.3 crore from Rs 322.6 crore, while the margin slipped to 2.65% from 2.85%. Return on net worth was negative in each of the last three years: 21.00% in FY24, 4.76% in FY25, 21.11% in FY26.

THE FY26 BOOK AGAINST FY25

The manufacturing order book stood at Rs 12,370 crore at the end of FY26, up from Rs 8,629 crore and from Rs 6,170 crore in FY24. New orders in FY26 were Rs 15,393 crore. That backlog is the bull case: work already won, still to be billed.

For the quarter ended June 2026, revenue from operations was Rs 4,117.9 crore, up 55.4% from Rs 2,649.4 crore. The restated loss from continuing operations narrowed 93% to Rs 64 crore from Rs 881 crore. The run-rate is better. It is still a loss, on a 2.65% annual EBITDA margin, at a Rs 25,583 crore valuation.

Zetwerk OS Runs a Universal Factory

Acharya and Ramakkrushnan built Zetwerk as a technology-led, asset-light manufacturing platform. The company aggregates third-party plants and its own shops into one network, scheduled on proprietary software it calls Zetwerk OS. The draft abridged prospectus on the offer describes that setup in one line.

We are a technology-led, asset-light manufacturing platform for industrial and consumer goods in India and globally. We aggregate manufacturing capacity across a network of third-party suppliers and our own facilities into a “universal factory”, unified through Zetwerk OS, our proprietary technology backbone.

Zetwerk Manufacturing Businesses Limited, draft abridged prospectus

Manufacturing is the growth engine. It contributed Rs 9,374.7 crore, or 58.9% of FY26 revenue, and rose 50.02% year on year. Energy products were the largest vertical at Rs 6,507.57 crore, the work that shows up as components for solar, wind and power projects. Precision products and capital goods split the rest of that segment. International markets supplied 29.60% of manufacturing revenue. The other Rs 6,538.6 crore came from a managed marketplace and digital trade platform, which grew much slower.

In the June quarter that mix flipped. Marketplace revenue of Rs 2,216 crore ran ahead of manufacturing revenue of Rs 1,902 crore, and manufacturing’s share of the quarter fell to 46.19%. The factories still earn the better return. Manufacturing EBITDA margin was about 6.03% in FY26, with a return on capital employed of 22.75%, down from 30.76%.

The red herring prospectus says there are no comparable listed peers. Public investors are being asked to price a hybrid: part contract manufacturer, part trade platform, with precision parts across multiple processes sitting beside commodity fabrication.

CUSTOMERS NAMED IN THE OFFER PAPERS

• Energy and power: Siemens Gamesa, NTPC Renewable Energy, Nordex Acciona, CG Power and Industrial Solutions, L&T MHI Power Boiler.
• Industry and metals: Indian Oil Corporation, National Aluminium Company, NextPower.
• Electronics and defence: Acer India, boAt, DRDO’s Electronics and Radar Development Establishment, the Indian Air Force.

Suppliers cover sheet metal stamping, fabrication, injection moulding, extrusion, assembly, die casting, forging, grinding and machining. They sit in India, Vietnam, Thailand, Taiwan, Germany, Spain, Eastern Europe, Mexico and the United States. The company says it has delivered products and raw materials worth about Rs 74,374 crore since it started. CIN records show it was incorporated in 2017 as a Karnataka company.

How the Book Is Split Before October 15

Of the net offer, excluding the employee reservation, 75% is for qualified institutional buyers, 15% for non-institutional investors and 10% for retail. Up to 7 lakh shares are reserved for eligible employees. Kotak Mahindra Capital Company, Morgan Stanley India Company, Goldman Sachs (India) Securities, Avendus Capital, JM Financial, HSBC Securities and Capital Markets (India) and Pantomath Capital Advisors are the merchant bankers. KFin Technologies is the registrar.

A 10% retail slice on a Rs 5,012.3 crore book is a small public float at issue. Institutions will set the tone on October 14, when the anchor book opens for one day. Abu Dhabi Investment Authority, Norges Bank, BlackRock and the asset-management arms of Goldman Sachs, SBI and HDFC were among more than 30 names said to be looking at that anchor book before the band was out. Those names are interest, not allotment. The first hard read of demand is the anchor list, which has not been published.

The Public Window Runs From October 15

THE ISSUE CALENDAR

1. March 2026: Files a draft offer document through the confidential route.
2. July 2026: SEBI clears the draft papers.
3. August 13, 2026: Files the updated draft red herring prospectus, then a Rs 2,600 crore fresh issue and a 9.68 crore share offer for sale.
4. October 11, 2026: Files the red herring prospectus with a Rs 2,830 crore fresh issue and a 14.45 crore share sale.
5. October 12, 2026: Sets the price band at Rs 143 to Rs 151.
6. October 14, 2026: Opens the anchor book for one day.
7. October 15 to 19, 2026: Public subscription window.
8. October 21, 2026: Expected finalisation of allotment.
9. October 23, 2026: Expected listing on BSE and NSE.

The bid that opens on October 15 is a bet on a Rs 12,370 crore order book and a 40.4% revenue rebound, against a 76% debt-paydown fresh issue, a 49% larger offer for sale, a 2.65% EBITDA margin and a restated loss. The stock is due to trade on October 23.

Disclaimer: This article is news reporting and analysis of a public share sale and is for information only. It does not constitute investment advice, a bid recommendation for the Zetwerk IPO, or an offer to buy or sell any security. Readers should consult a SEBI-registered investment adviser or their broker and read the red herring prospectus, including the risk factors, before applying for shares. Offer terms, share counts and financial figures reflect the company’s filings and public statements as dated above and may change with a corrigendum, the final prospectus, or later results.