A niche manufacturer of engineered fabrics for defence, aerospace, and industrial applications hits the market with a Rs 650 crore pure offer-for-sale
Kusumgar Ltd., a manufacturer of woven, coated, and laminated synthetic fabrics — referred to as engineered fabrics — opens for subscription on July 8 with the issue closing on July 10. The company has built a niche around high-performance synthetic fabrics for aerospace and defence, industrial and automotive, and outdoor and lifestyle applications, and has selectively expanded into manufacturing finished products such as parachute systems, stealth solutions, and rapid deployment systems.
This being a pure Offer for Sale, no proceeds go to the company — the issue provides an exit to existing stakeholders and unlocks listing benefits.
What the Company Does
Kusumgar manufactures engineered fabrics where critical performance parameters include tensile strength, tear strength, abrasion resistance, air permeability, and waterproofing. It has leveraged deep process knowledge to manufacture over 1,000 unique fabric configurations (SKUs) as of March 31, 2026, focused on polyamide and polyester filaments and polyurethane chemistry.
Its business spans four segments. Aerospace and Defence Fabrics covers fabrics for parachutes, tactical clothing, stealth systems, and rapid deployment systems — where the company is a development and manufacturing partner for an Indian government customer and also exports globally.
Aerospace and Defence Solutions extends this expertise into finished products including parachute systems, camouflage nets, decoys, and shelters, along with maintenance and repair services. Industrial and Automotive Fabrics covers products for tapes, custom solutions, mechanical rubber goods, and inflatable fabrics. Outdoor and Lifestyle Fabrics serves the global activewear, rainwear, and personal gear markets.
The global engineered fabrics industry has grown at a CAGR of 8.5% to reach USD 67.8 billion in 2025 and is projected to expand at 10.6% CAGR to reach USD 112.2 billion by 2030. High entry barriers characterise the industry — it requires precision and a high level of technical know-how, which insulates established players.
Issue Details
| Particulars | Details |
|---|---|
| Issue Opens | July 8, 2026 |
| Issue Closes | July 10, 2026 |
| Price Band | Rs 398 – Rs 419 per share |
| Face Value | Re 1 |
| Issue Size | Rs 650 crore (entirely Offer for Sale) |
| Total Shares | ~1,55,13,126 shares at upper cap |
| Minimum Lot | 35 shares |
| Post-Issue Market Cap | Rs 4,399.14 crore (at upper cap) |
| Issue Constitutes | 14.78% of post-IPO equity |
| Employee Discount | Rs 39 per share |
| QIB / NII / Retail Split | 50% / 15% / 35% |
| BRLMs | Axis Capital, IIFL Capital Services, Motilal Oswal Investment Advisors |
| Registrar | Bigshare Services Pvt. Ltd. |
| Listing | BSE and NSE |
Since this is a pure OFS, the paid-up equity capital remains unchanged post-issue at Rs 10.50 crore.
Financial Performance
| Particulars (Rs cr) | FY24 | FY25 | FY26 |
|---|---|---|---|
| Total Income | 474.55 | 790.21 | 711.78 |
| Net Profit | 84.40 | 111.99 | 98.20 |
| PAT Margin | 17.78% | 14.17% | 13.80% |
| RoCE | 55.87% | 42.89% | 24.76% |
The financial trajectory shows inconsistency. Revenue surged in FY25 and then contracted in FY26, while profits peaked in FY25 and declined in FY26 even as margins compressed across all three years. RoCE has more than halved from FY24 to FY26. Management attributes this to an order book shift and heavy capex spending over the last two fiscal years, noting that those issues are now resolved. The three-year average EPS stands at Rs 9.90 and average RoNW at 46.02%. Debt of Rs 223 crore as of March 31, 2026, and contingent liabilities of Rs 114.80 crore are additional points of caution.
Valuation and Peer Comparison
At the upper band of Rs 419, the issue is valued at a P/E of around 44.8x on FY26 earnings and 39.3x on FY25 earnings — a multiple that analysts describe as aggressive, given the earnings inconsistency and declining margins. The P/BV stands at around 8.75x on post-IPO NAV. The company lists Garware Technical Fibres, Arvind Ltd., and SRF Ltd. as listed peers, trading at P/E multiples of 34.7x, 35.0x, and 43.5x respectively — though these are not directly comparable businesses.
Risks to Consider
Earnings declined in FY26 even as revenue contracted — a combination that warrants scrutiny before the expansion-led recovery narrative is accepted. RoCE has declined steeply from nearly 56% in FY24 to under 25% in FY26, reflecting the drag from the capex programme.
The company carries meaningful debt of over Rs 223 crore and contingent liabilities of Rs 114.80 crore. Since this is a pure OFS, none of the IPO proceeds address these balance-sheet concerns — all money exits with selling shareholders. The defence and aerospace business is also subject to the risks of government procurement cycles, order delays, and regulatory approvals.