Business Overview
Tonbo Imaging India Limited is a defence electronics original equipment manufacturer based in Bengaluru. It designs and builds sensing, processing, communication and guidance systems for surveillance, reconnaissance, targeting and control, including thermal imaging cores, weapon sights, hand-held thermal binoculars, targeting systems, missile seekers, fire control systems and missile guidance systems. The products divide into tactical systems, which are soldier-carried electro-optical sights, and platform systems, which are stabilised multi-sensor gimbals and payloads integrated into vehicles, aircraft, naval assets and weapon stations. The company was incorporated in 2003 as a subsidiary of a research company and turned into a defence product manufacturer in 2012 after the promoters bought it out. Its promoters are Arvind Kondangi Lakshmikumar, Ankit Kumar and Cecilia D’Souza.
The Frost & Sullivan report commissioned for the Offer ranks the company the largest manufacturer of thermal imaging systems to government and defence agencies in India by sales value over April 2024 to March 2026, and the largest exporter of such systems from India by units, with a 94% share of units exported between the Financial Years 2024 and 2026. It has owned 100% of its intellectual property since the Financial Year 2024, having bought it from CEAQ Singapore, and its portfolio is free of United States ITAR export controls, which lets it sell into markets that American-controlled equipment cannot reach. It is a supplier under the Indigenously Designed, Developed and Manufactured category of the Defence Acquisition Procedure 2020. The model is asset-light: design and intellectual property are in house and manufacturing is outsourced to electronics manufacturing services partners.
Over 28,000 systems have been deployed across 24 countries as of June 30, 2026. Revenue from operations was ₹ 362.65 Crore in the Financial Year 2026 and profit after tax was ₹ 50.88 Crore. In the three months ended June 30, 2026 revenue was ₹ 36.01 Crore and the company recorded a loss of ₹ 17.74 Crore. The confirmed order book stood at ₹ 314.24 Crore on June 30, 2026 across 36 orders, of which ₹ 231.87 Crore was domestic and ₹ 82.37 Crore overseas. The company had 339 permanent employees as of June 30, 2026, of whom 130 were research and development engineers.
IPO Details
| Particulars | Details |
|---|---|
| IPO Date | October 15, 2026 to October 19, 2026 (Anchor bidding: October 14, 2026) |
| Issue Type | Book Built Offer – Offer for Sale only; there is no Fresh Issue |
| Tentative Listing Date | October 23, 2026 (BSE and NSE) |
| Face Value | ₹ 2 per Equity Share |
| Price Band | ₹ 665 to ₹ 700 per Equity Share |
| Lot Size | 21 Equity Shares |
| Minimum Retail Investment | ₹ 14,700 (1 lot at the Cap Price) |
| Issue Size | 1,21,74,046 Equity Shares aggregating to ₹ 852.18 Crore at the Cap Price (entirely an Offer for Sale) |
| Employee Reservation | Up to 14,000 Equity Shares |
| Equity Shares Outstanding | 5,72,82,100 before and after the Offer |
| Post-Issue Market Cap | ₹ 4,009.75 Crore (at the Cap Price) |
| Promoter Holding (Pre-Offer / Post-Offer) | 17.43% / 14.01% |
| Promoter & Promoter Group Holding (Pre-Offer / Post-Offer) | 18.58% / 14.56% |
| Reservation | QIB: not more than 50%; NII: not less than 15%; Retail: not less than 35% of the Net Offer |
| Book Running Lead Managers | JM Financial Limited and IIFL Capital Services Limited |
| Registrar to the Offer | KFin Technologies Limited |
Objects of the Offer
The Offer is entirely a sale by existing shareholders. The RHP states the objects as follows:
| Issue Objects | Est. Amt (₹ Cr.) |
|---|---|
| Proceeds to the Company | Nil |
| Proceeds to the Selling Shareholders (Offer for Sale, at the Cap Price) | 852.18 |
| Listing benefits: visibility, brand image and liquidity for existing shareholders | Not quantifiable |
Key Strengths and Opportunities
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It owns all of its intellectual property
The company is one of the few in India with no dependence on external technology partners, having owned 100% of its intellectual property since the Financial Year 2024 through assignment agreements dated March 11, 2024 under which it bought the IP from CEAQ Singapore. The technology runs from optics to embedded software and electronics, including proprietary video engines, AI-accelerated image processing and sub-5 microradian multi-axis gimbal stabilisation. It controls the core components itself: optical designs, infrared imaging engines, video processing electronics, target tracking electronics, laser ranging modules, stabilised gimbal platforms and the software to drive them, each a module that can be recombined into different products. Owning the IP gives it control of its technology roadmap, and the portfolio spans infrared sensors, computer vision algorithms, low size-weight-and-power optics, free-space optical communications and high-power microwave systems.
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An asset-light model with rising research spending
Design and IP are developed in house while manufacturing is outsourced to electronics manufacturing services partners including Kaynes Technology India Limited and Avalon Technology and Services Private Limited. The research centre in Bengaluru employed 130 engineers as of June 30, 2026, about 38% of the workforce, against 133 in the Financial Year 2026, 70 in 2025 and 41 in 2024. Research spending rose to ₹ 25.86 Crore in the Financial Year 2026 from ₹ 9.10 Crore in 2025 and ₹ 4.24 Crore in 2024, moving from 1.26% of total expenses to 8.62%. The company paid ₹ 183.19 Crore for the intellectual property bought from CEAQ Singapore in March 2024, which sits in intangible assets. Outsourcing manufacture keeps capital investment in plant low and lets the company concentrate on design.
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A global installed base and an ITAR-free portfolio
Over 28,000 tactical systems had been deployed across 24 countries as of June 30, 2026, with products sold to customers in the European Union, the United States and Israel. The Frost & Sullivan report makes the company the largest manufacturer of thermal imaging systems to Indian government and defence agencies by sales value over April 2024 to March 2026, and gives it a 94% share of India’s thermal imaging exports by units between the Financial Years 2024 and 2026. Because its systems are free of United States ITAR controls, it can supply countries that American, Israeli and European suppliers cannot serve without approvals. The revenue mix has swung sharply by geography: India was 93.06% of revenue from operations in the Financial Year 2026 against 33.49% in 2025, while Europe fell from 65.34% to 0.13%.
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A product range spanning every battlefield domain
The portfolio addresses surveillance, reconnaissance and targeting for ground, air, naval and missile systems. Tactical optronics are handheld, weapon-mounted and helmet-mounted sights built for modularity and low size, weight and power. Platform optronics are stabilised multi-sensor gimbals and electro-optical payloads, from miniature gimbals for small unmanned aircraft to four-axis gimbals with auto target tracking and geo-referencing, sold largely to systems integrators. Directed energy systems add radio-frequency suppression of hostile drones and jet-powered loitering munitions with infrared seekers. Within each domain the offering varies by sensor band, covering visible, near, short, long and mid-wave infrared, and the Frost & Sullivan report calls the Spartan-S thermal weapon sight a leading product, smaller and lighter than comparable Indian products.
Key Risks
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Revenue fell 22.69% and the business has poor visibility
Revenue from operations fell 22.69% from ₹ 469.08 Crore in the Financial Year 2025 to ₹ 362.65 Crore in 2026, after rising 9.55% the year before, because international orders were delayed by the West Asia conflict and other expected orders slipped into the Financial Year 2027, including one order of ₹ 51.44 Crore. The company recorded a loss of ₹ 17.74 Crore in the three months ended June 30, 2026, and its bid-to-win ratio fell to 14.29% in that quarter from 34.35%, 35.94% and 40.91% in the three preceding years. Defence procurement is tender-driven and episodic, so the RHP states revenue visibility is inconsistent.
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Operating cash flow has been negative for three periods
Net cash used in operating activities was ₹ 14.68 Crore in the three months ended June 30, 2026, ₹ 63.22 Crore in the Financial Year 2026 and ₹ 136.12 Crore in 2025, and cash and cash equivalents fell by ₹ 9.86 Crore, ₹ 63.29 Crore and ₹ 13.75 Crore across the same periods. The RHP attributes this to higher inventories and other current assets, and in the Financial Year 2025 to the fall in other current liabilities following the one-time intellectual property purchase, the rise in trade receivables and non-current financial assets, and lower non-current provisions. Sustained outflows could strain liquidity and force the company to raise further finance.
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Some customers contribute a large share of revenue
The largest customer was 54.74% of revenue from operations in the three months ended June 30, 2026 and 57.07% in the Financial Year 2025, though only 13.78% in 2026, and the top five customers were 92.06%, 53.03%, 86.36% and 72.19% across the stub period and the three Financial Years. Contracts are short-term, non-recurring and won through competitive tenders with no annuity revenue, and the company had fewer than 20 customers in the June 2026 quarter.
Financial Snapshot
| Key Performance Indicator | Units | FY 2026 | FY 2025 | FY 2024 |
|---|---|---|---|---|
| Revenue from Operations | ₹ Cr. | 362.65 | 469.08 | 428.19 |
| Revenue Growth | % | (22.69) | 9.55 | 342.22 |
| Other Income | ₹ Cr. | 7.29 | 5.31 | 3.71 |
| Total Income | ₹ Cr. | 369.94 | 474.39 | 431.90 |
| Gross Profit | ₹ Cr. | 185.13 | 264.47 | 208.26 |
| Gross Profit Margin | % | 51.05 | 56.38 | 48.64 |
| EBITDA | ₹ Cr. | 104.62 | 139.06 | 112.32 |
| EBITDA Margin | % | 28.85 | 29.65 | 26.23 |
| Finance Costs | ₹ Cr. | 10.62 | 17.74 | 7.68 |
| Depreciation and Amortisation | ₹ Cr. | 31.34 | 26.59 | 13.40 |
| Restated Profit Before Tax | ₹ Cr. | 69.96 | 99.27 | 94.55 |
| Profit After Tax | ₹ Cr. | 50.88 | 72.76 | 68.54 |
| PAT Margin | % | 13.75 | 15.34 | 15.87 |
| Basic EPS | ₹ | 9.19 | 13.38 | 62.61 |
| Diluted EPS | ₹ | 8.88 | 12.70 | 13.63 |
| Return on Equity | % | 9.75 | 20.20 | 52.72 |
| Return on Capital Employed | % | 14.54 | 27.41 | 67.76 |
| Return on Net Worth | % | 9.75 | 20.20 | 52.72 |
| Net Worth / Total Equity | ₹ Cr. | 553.16 | 490.14 | 230.13 |
| Net Asset Value per Equity Share | ₹ | 96.57 | 85.57 | 45.77 |
| Total Borrowings (current + non-current) | ₹ Cr. | 116.06 | 78.14 | 96.36 |
| Intangible Assets | ₹ Cr. | 162.70 | 165.19 | 183.88 |
| Inventories | ₹ Cr. | 219.49 | 111.14 | 111.69 |
| Trade Receivables | ₹ Cr. | 211.66 | 210.31 | 93.64 |
| Cash and Bank Balances | ₹ Cr. | 16.18 | 100.97 | 85.67 |
| Other Bank Balances | ₹ Cr. | 22.45 | 0.95 | 30.00 |
| Working Capital Days | Days | 517 | 280 | 152 |
| Net Tangible Fixed Asset Turnover | (x) | 14.62 | 19.16 | 89.45 |
| Cash Flow from Operating Activities | ₹ Cr. | (63.22) | (136.12) | 78.33 |
| Cash Flow from Investing Activities | ₹ Cr. | (32.27) | (24.69) | (190.17) |
| Cash Flow from Financing Activities | ₹ Cr. | 32.19 | 147.06 | 187.81 |
| Research and Development Cost | ₹ Cr. | 25.86 | 9.10 | 4.24 |
| R&D Cost as a % of Total Expenses | % | 8.62 | 2.43 | 1.26 |
| Export Share of Revenue | % | 5.57 | 65.52 | 48.61 |
| Revenue from Tactical Systems | ₹ Cr. | 211.68 | 362.30 | 359.27 |
| Revenue from Platform Systems | ₹ Cr. | 144.81 | 101.05 | 12.70 |
| Confirmed Order Book (year end) | ₹ Cr. | 279.02 | 218.61 | 563.14 |
| Permanent Employees | Nos. | 339 | 258 | 167 |
Peer Comparison
| Company | Revenue from Operations (₹ Cr.) |
P/E (x) | RoNW (%) | NAV (₹ per share) |
|---|---|---|---|---|
| Tonbo Imaging India Limited | 362.65 | 78.83 | 9.75 | 96.57 |
| Paras Defence and Space Technologies Limited | 476.57 | 117.74 | NA | 90.02 |
| Data Patterns (India) Limited | 924.77 | 87.29 | 17.00 | 310.08 |
| Astra Microwave Products Limited | 1,162.80 | 83.92 | NA | 138.46 |
| Zen Technologies Limited | 687.69 | 73.44 | NA | 209.22 |
| Bharat Electronics Limited | 27,610.11 | 45.70 | NA | 32.82 |
| Industry Average (as per RHP) | – | 81.62 | – | – |
Valuation
| Valuation Metric | At the Cap Price of ₹ 700 |
|---|---|
| Market Capitalisation | ₹ 4,009.75 Crore |
| Market Cap / FY 2026 Revenue from Operations | 11.06 times |
| P/E on FY 2026 Diluted EPS of ₹ 8.88 | 78.83 times |
| P/E on FY 2026 Profit After Tax | 78.81 times |
| Enterprise Value | ₹ 4,087.18 Crore |
| EV / FY 2026 EBITDA | 39.07 times |
| NAV per Share (March 31, 2026 / June 30, 2026) | ₹ 96.57 / ₹ 94.01 |
| Price to Book (on March 31, 2026 NAV) | 7.25 times |
| Price to Book (on June 30, 2026 NAV) | 7.45 times |
| Confirmed Order Book (June 30, 2026) / FY 2026 Revenue | 0.87 times |
| Industry Average P/E (as per RHP) / Peer Median | 81.62 times / 83.92 times |
Conclusion
Tonbo Imaging India Limited offers an attractive opportunity to participate in India’s growing defence electronics industry, supported by its proprietary technology, ITAR-free product portfolio and established presence across 24 countries. The company has deployed over 28,000 systems globally and holds a strong position in India’s thermal imaging exports. Its asset-light business model and rising R&D investment could support future product innovation and growth.
However, the company’s financial performance raises concerns. Revenue declined 22.69% YoY to Rs 362.65 crore in FY26, while PAT fell 30.1% to Rs 50.88 crore. The company also reported a loss of Rs 17.74 crore in the June 2026 quarter. Negative operating cash flow, rising inventory, higher working capital requirements and customer concentration remain key risks. At the upper price band of Rs 700, the IPO is valued at 78.83x FY26 earnings, leaving limited room for disappointment if growth remains weak.
Despite these concerns, the company’s niche technology capabilities, export potential and exposure to defence modernisation could attract investor interest. The IPO may appeal to investors seeking short-term listing gains, subject to favourable market sentiment and subscription trends. Hence we recommendation to Subscribe this IPO for listing gains.
