Mumbai-based Aeroflex Industries Limited (‘Aeroflex” or “the Company”) is a manufacturer of environment friendly Metallic Flexible Flow Solution products, catering to global markets. Aeroflex exports its products to more than 80 countries including Europe, USA and others, generating more than 80% of its revenue from exports. Aeroflex’s solutions find application in a wide spectrum of industries for controlled flow of all forms of substances including air, liquid and solid. The Company’s manufacturing facility and NABL accredited R&D lab are situated at Taloja, Navi Mumbai. The Company has filed its Draft Red Herring Prospectus (DRHP) with SEBI to raise about Rs. 350 crores through an Initial Public Offering (IPO).

Aeroflex is subsidiary of Sat Industries Limited which is also listed on BSE and NSE. Both Aeroflex and Sat Industries Limited have dividend payment history. Sat Industries Limited has track record of scaling up of multiple diverse businesses backed by acquisition led strategy.

The Offer with a face value of Rs 2 per equity share consists of a fresh issue of equity shares worth up to Rs. 160 crores and an offer-for-sale (OFS) of up to 17.5 million equity shares by promoters selling shareholders and promoter group. The Company in consultation with the BRLM may give a discount to the eligible shareholders of its Promoter i.e. Sat Industries Limited.

As per the DRHP, the proceeds from the fresh issue will be utilised to the extent of Rs. 35 crores for the prepayment of outstanding secured borrowings availed by the Company, Rs. 84 crores for funding its working capital requirements, and certain of the amount will be used general corporate purposes and acquisitions for inorganic growth.

For Fiscal 2022, Aeroflex generated consolidated revenue from operations of Rs. 240.8 crores. The Company had EBITDA of Rs. 46.7 crores and EBITDA margin of 19.4%. The Company’s profit after tax for Fiscal 2022 was Rs. 27.5 crores with PAT margin of 11.4%. The Company’s Return on Equity (RoE) and Return on Capital Employed (RoCE) was 31.9% and 36.3% for Fiscal 2022. The Company has low leverage with debt-to-equity ratio of 0.45 as of January 31, 2023.

Flexible flow solutions play a critical role in transfer of substances (air, liquid and solid) in any industrial or commercial ecosystem, connecting the origin and end points of various processes. The Company offers its products under more than 1,700 SKUs (Stock Keeping Units). The Company has recently developed products made of bronze as well and has a pipeline of more than 55 products as on date. Given the complexity of the research and product development, varying product applications, necessary technical expertise, precision involved, lengthy and stringent customer qualification processes, Aeroflex’s business model poses significant entry barriers (to new entrants) as well as exit barriers (to existing customers).

Global flexible flow solutions provider operating in huge addressable market, catering to diverse industry segments and poised to benefit from mega industrial trends. Global SS flexible hose industry is estimated to be worth USD 25 Billion in 2020 with the size of SS corrugated hose estimated at USD 12.5 Billion which is slated to grow to USD 38 Billion and USD 18 Billion by 2027.

Aeroflex’s products replace flow solutions made of rubber and polymers. Metallic flexible flow solutions made with stainless steel produce significantly lower carbon emissions (2 to 5 times lower) than those made with synthetic rubber making our products environment friendly and business model green & sustainable.

The Offer is being made through the Book Building Process, wherein not more than 50% of the Offer shall be available for allocation to Qualified Institutional Buyers, not less than 15% of the Offer shall be available for allocation to Non-Institutional Investors and not less than 35% of the Offer shall be available for allocation to Retail Individual Investors. Up to 10% of the Offer shall be reserved for the shareholders of Sat Industries Limited.

Pantomath Capital Advisors Private Limited is the sole book-running lead manager and Link Intime India Private Limited is the registrar to the offer. Company’s equity shares are proposed to be listed on the BSE and NSE.