Aditya Infotech IPO — Should You Subscribe Or Not? Read Anand Rathi's Analysis For Key Details

Aditya Infotech's Rs 1,300-crore IPO comprises of a fresh issue of equity shares worth Rs 500 crore and an offer-for-sale of shares valued at Rs 800 crore. An advanced video security and surveillance products, technologies, and solutions provider has fixed the price band in the range of Rs 640 to Rs 675 per share.

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Anand Rathi Report

Aditya Infotech Ltd. will open its initial public offering for subscription on July 29 and the offer closes on July 31. An advanced video security and surveillance products, technologies, and solutions provider has fixed the price band in the range of Rs 640 to Rs 675 per share.

The Rs 1,300-crore IPO comprises of a fresh issue of equity shares worth Rs 500 crore and an offer-for-sale of shares valued at Rs 800 crore.

Investors can place bids starting from a minimum of 22 shares and in multiples thereafter.

ICICI Securities Ltd., IIFL Capital Services Ltd. are the book-running lead managers for the public issue.

Objects of the Issue:

• Prepayment and/or repayment of all or a portion of certain borrowings availed by the company.

• General corporate purposes.

Valuation & Outlook:

Aditya Infotech, also operating as Aditya Group Infotech, is the parent company behind CP PLUS, a leading brand in India's electronic security and surveillance space. They offer the most extensive portfolio in the surveillance sector, supported by in-house R&D, with over 3,000 factory personnel, 1,000+ employees, 54 offices, 30,000+ partners, and 44 service centres nationwide.

They are India's leading provider of video security and surveillance products, solutions, and services by revenue, with a market share of 20.8% in Fiscal 2025. Their ‘CP PLUS' and ‘Dahua' brands rank among India's top CCTV and security product names, offering a wide range of solutions from smart IoT cameras to thermal and explosion-proof systems.

The company is focusing on leveraging India's evolving cybersecurity regulations to reinforce its market leadership while expanding its product portfolio and upgrading existing offerings with next-generation, advanced technologies.

At the upper price band, the company is valued at a FY25 P/E of 22.5x, with a post-issue market capitalization of Rs 79,118.9 million. The company holds a dominant position in the segment with minimal competition and has consistently reported growth in both revenue and profitability over the stated periods.

Given these strengths, the IPO appears fully priced, and a “Subscribe – Long-term" recommendation is advised.

Key Risk:

• The company's financial performance is primarily dependent on the revenue from sale of closed-circuit television (“CCTV”) cameras, network video recorders (“NVRs”), digital video recorders (“DVRs”) and pan-tilt-zoom (“PTZ”) cameras which collectively contributed to 77.47% of their revenue from operations in Fiscal 2025. Variations in demand and changes in consumer preference towards CCTV cameras, NVRs, DVRs, PTZs cameras and other surveillance equipment could have an adverse effect on their business, results of operations, cash flows and financial condition.

• They depend on the limited number of suppliers for parts, materials and products. Any interruption in the availability of parts, materials and products could adversely affect their business, results of operations, cash flows and financial condition.

• The company import a portion of their parts and materials primarily from China. Any restrictions on imports or fluctuation in global commodity prices that affect their parts and materials could adversely affect their business, results of operations, cash flows and financial condition.

• The company's manufacturing facility is in Andhra Pradesh, which exposes their operations to potential risks arising from local and regional factors such as adverse social and political events, weather conditions and natural disasters.

• A significant portion of the company's revenue from operations is generated from sales of products supplied by Dahua which contributed 24.7% of their revenue from operations in Fiscal 2025. Any disruption in the supply of products for sale by Dahua on commercially viable terms, or demand thereof, may adversely affect their business, results of operations, cash flows and financial condition. Further, their distribution agreements with Dahua have certain restrictive covenants and can be terminated without cause, which could negatively impact their business, results of operation and financial condition.

• The company rely primarily on their synergies with AIL Dixon Technologies India Private Limited and Dixon Technologies (India) Limited, for the manufacture of their products. Any disruption in the company's relations may adversely affect their business, results of operations, cash flow and financial condition.

• The company may be restricted from offering their products in certain geographical regions pursuant to arrangement with CP Plus FZE, UAE, which may adversely affect their business, results of operations, financial condition and cash flows.

• They are subject to strict quality requirements, and the sale of their products is dependent on their quality controls and standards. Any failure to comply with quality standards may adversely affect their business, results of operations, cash flows and financial condition.

• Any disruption or shutdown of their warehouse facilities, or failure to achieve optimal capacity utilization at such facilities could adversely affect their business, results of operations and financial condition.

• Their branch offices, service centers and experience centers are located on leased premises. They cannot assure that the lease deeds governing their premises will be renewed upon termination or that they will be able to obtain other premises on same or similar commercial terms.

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