Atomberg IPO DRHP: Profitability, Lawsuits, Key Risks — 10 Things To Know Before The Smart Fan Maker Goes Public

Atomberg Technologies Limited filed its draft red herring prospectus with SEBI on August 20, 2026, formally kicking off the IPO process for the company best known for BLDC (Brushless Direct Current) ceiling fans. The offer combines a fresh issue of up to Rs 450 crore with an offer for sale of up to 7.65 crore shares from seven existing investors, run by ICICI Securities, Avendus Capital and IIFL Capital Services as book-running lead managers.

Here are ten things that you need to know from the DRHP before Atomberg's market debut.

• Atomberg told SEBI it has no listed peer anywhere in the world

In the section explaining its offer price, the company states there are no listed businesses globally engaged in a comparable line of work, so no peer valuation comparison is provided. That claim sits alongside separate market-share data in the same filing that benchmarks Atomberg against 17 named competitors, including Havells, Crompton Greaves and Bajaj Electricals, for share and pricing comparisons.

• The company doesn't meet SEBI's standard profitability bar for an IPO

Atomberg is going public under Regulation 6(2) of the SEBI ICDR Regulations, the route reserved for companies that fail the usual net-worth and profitability thresholds.

That comes with a condition: at least 75% of the offer has to go to qualified institutional buyers. If that threshold isn't met, the entire IPO fails and every rupee gets refunded. It's the same route several loss-making, new-age companies have used to list on Indian exchanges in recent years.

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• Revenue grew sharply, but the loss actually widened

Revenue from operations rose 34.84% in FY26 to Rs 1,293.77 crore, up from Rs 959.51 crore the year before. Despite that growth, the restated loss after tax widened to Rs 148.9 crore, compared with Rs 117.4 crore in FY25. The company attributes part of the gap to a one-time exceptional charge tied to new labour-code compliance costs and a cost-cutting initiative, layered on top of rising depreciation and employee expenses.

• Only one of the company's three business segments is profitable

Atomberg reports three segments: Home Appliances (fans and smart locks), Kitchen Appliances (mixer grinders and water purifiers) and Proprietary Components, which supplies motors and parts to enterprise customers through subsidiary Atomberg Innovation Private Limited.

Home Appliances posted a segment profit of Rs 135.3 crore in FY26. The other two lost a combined Rs 80.7 crore, and both losses have widened year on year since the segments were launched.

• A components factory built for future demand is barely being used

The Chakan-Varale facility that makes motors, stators and circuit boards for Atomberg's enterprise customers had its installed capacity nearly double in FY26, to 36.32 million units.

Actual production came to 5.36 million units, a utilisation rate of 14.76%. Motor assembly alone ran at just 1.86% capacity. The company has built ahead of the demand it's betting will arrive.

• Atomberg has signed a binding term sheet with Voltas to build AC compressors

On August 14, 2026, days before the DRHP was filed, AIPL (Atomberg Innovation Private Limited, the B2B components and deep-tech subsidiary) signed a binding term sheet with Voltas Limited to set up a joint venture manufacturing room air-conditioner compressors and related parts. The deal still needs due diligence and definitive agreements to go through. It marks Atomberg's first concrete move into a category, air conditioning, where it currently sells nothing.

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• Tamil Nadu's tax department has raised a demand worth nearly a third of one year's revenue

The State Tax Officer in Coimbatore issued show-cause notices in July 2026 alleging discrepancies in turnover reporting, wrongly claimed input tax credit and lapses in e-invoicing compliance across FY23 and FY24. The proposed demand totals Rs 376.7 crore.

Atomberg has formally disputed the allegations, and the matter is pending. Notably, this figure doesn't appear in the Rs 92.8 lakh contingent liabilities number quoted elsewhere in the filing, which relates to an unconnected legal claim.

• The company is fighting two separate patent and design battles in court

Atomberg's 2025 entry into water purifiers triggered cross-litigation with Eureka Forbes, with both companies suing each other across the Bombay and Delhi High Courts over alleged patent infringement; the Supreme Court eventually consolidated the case in Mumbai.

Separately, Atomberg accused rival Stove Kraft's Pigeon brand of copying its Renesa Alpha fan design, won an interim injunction with a court-ordered seizure of goods, then had that injunction overturned on appeal in April 2026. Both disputes remain unresolved.

• Auditors have flagged issues in the company's books for three straight years

The joint statutory auditors' reports carried some form of qualification in FY24, FY25 and FY26, citing cash losses each year and an audit-trail feature that wasn't enabled on the company's accounting software.

The FY24 report also disclosed that a resigned employee had processed vendor payments without proper documentation and personally benefited by Rs 2.01 crore, an amount the company says it has since recovered.

• Both founders have pledged part of their own shares against personal loans

Promoters Manoj Kumar Meena and Sibabrata Das, who together hold 27.75% of the company on a fully diluted pre-offer basis, have pledged Equity Shares and Bonus CCPS equivalent to 20.22% of their combined shareholding as security for loans taken in their individual capacity. The DRHP notes these will be released ahead of the IPO lock-in and re-pledged once the offer closes.

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The company may also raise up to Rs 90 crore through a pre-IPO placement before the Red Herring Prospectus is filed with the Registrar of Companies, in which case the fresh issue would shrink by an equivalent amount.

Of the Rs 450 crore fresh issue, Rs 90 crore is earmarked for repaying or prepaying company borrowings, including a loan from ICICI Bank Limited, an affiliate of lead manager ICICI Securities. Another Rs 150 crore is set aside for brand awareness and performance marketing, and Rs 100 crore for research and development. The balance, capped at 25% of gross proceeds, goes toward general corporate purposes.

Founded in 2012 and headquartered in Mumbai, Atomberg builds energy-efficient fans, mixer grinders, water purifiers and smart locks under its own brand, and separately manufactures motors and electronic components for enterprise customers through subsidiary AIPL.

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