Technopaints And Chemicals Files DRHP For Rs 500 Crore IPO; Plans To Fund New Plant, Working Capital

Technopaints And Chemicals Limited, an integrated paint solutions provider, has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise up to Rs 500 crore through an initial public offering (IPO).

The IPO comprises a fresh issue of shares worth up to Rs 325 crore and an Offer for Sale (OFS) of up to Rs 175 crore. Promoters Akuri Srinivasa Reddy, A Sandhya, Akuri Sakesh Reddy, Akuri Deepthi and K Sivareddy are among the selling shareholders. Satyanarayana Reddy Akuri, Anil Kondoth, Dantuluri Krishna Harish Varma, Venkata Lakshmi Narasimha Murthy Chilla and Arjun Nagulapally will also offload shares.

The company may also raise up to Rs 65 crore through a pre-IPO placement before filing the Red Herring Prospectus with the Registrar of Companies. Any amount raised through the pre-IPO placement will be deducted from the fresh issue component.

Technopaints plans to utilise Rs 149.1 crore from the net proceeds of the fresh issue to establish a greenfield paints manufacturing and innovation facility at Ibrahimpatnam, Telangana. Around Rs 80 crore will be used to meet incremental working capital requirements, while the remaining proceeds will be deployed towards general corporate purposes.

Anand Rathi Advisors is the Book Running Lead Manager for the issue, while KFin Technologies is the registrar.

Technopaints undertakes turnkey paint supply and application projects across key real estate and industrial segments. The company has executed more than 1,150 projects covering over 1,450 million sq ft across seven states. Its order book stood at Rs 994.69 crore as of July 31, 2026. However, the company has cautioned that projects forming part of the order book could be delayed, modified, suspended, cancelled or terminated and may be executed over multiple financial periods.

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The company offers more than 1,200 SKUs across emulsions, primers, enamels, putties, textures and speciality coatings, with over 2,700 paint shades.

Financially, Technopaints reported a profit after tax of Rs 37.78 crore for fiscal 2026, more than double the Rs 16.65 crore reported in fiscal 2025. Revenue from operations rose 68.4% to Rs 350.5 crore in fiscal 2026 from Rs 208.1 crore a year earlier.

However, the company remains significantly dependent on its turnkey projects business. Turnkey Paint Projects contributed 91.25% of revenue in fiscal 2026, compared with 89.20% in fiscal 2025 and 81.81% in fiscal 2024.

Geographic concentration is another key risk. Telangana accounted for 99.59% of revenue from turnkey projects in fiscal 2026, compared with 97.88% in fiscal 2025 and 98.77% in fiscal 2024. The company manufactures all its products at two facilities in Telangana, while the proposed greenfield facility will also be located in the state.

Customer concentration is also high, with the top 10 customers contributing 81.90% of revenue in fiscal 2026. The company does not have long-term agreements with its customers, creating a risk if major clients reduce or discontinue business.

On the supply side, the top 10 suppliers accounted for 61.46% of total purchases in FY26. The company also operates its turnkey projects substantially on a fixed-price basis, exposing it to raw material price increases, cost overruns and execution delays.

Technopaints has also flagged significant working capital requirements and risks associated with delays or cost overruns in its proposed greenfield facility.

The company said its dependence on channel partners for project execution, as well as potential disruptions at its manufacturing facilities, could also affect its business and financial performance.

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