Acme Universal Safezone 9 Limited, an ISO-certified manufacturer of industrial safety footwear under the 'ACME' brand, has filed its Draft Red Herring Prospectus (DRHP) for an Initial Public Offering. The company, incorporated in 2016 and headquartered in Gwalior, Madhya Pradesh, operates within the Personal Protective Equipment (PPE) segment, serving sectors such as construction, oil & gas, mining, and automotive industries.

About the Company

Acme Universal Safezone 9 Limited manufactures and supplies industrial safety footwear designed to protect workers in hazardous environments. The company operates four manufacturing facilities across Madhya Pradesh and Uttar Pradesh, with an installed soling capacity of 43,15,000 units. In FY2026, capacity utilization stood at 64.23%. The company produces 15 distinct product lines covering EVA-rubber, Nitrile Rubber, and PVC sole types, addressing hazard categories including impact protection, chemical resistance, electrical shock resistance, and slip resistance.

The company utilizes German-sourced Desma direct injection machines for in-house polyurethane sole manufacturing, equipped with robotic arm systems for precision control. Its products comply with IS 15298, EN ISO 20345, ASTM F2413, and SEDEX SMETA standards, qualifying it for government procurement via the GeM portal and defence supply contracts. Distribution networks include direct institutional sales, regional distributors, and e-commerce channels with warehousing at over 40 locations across India. Exports reach markets in the UAE, Bahrain, Saudi Arabia, Nigeria, and Israel.

Financial Performance

The company has demonstrated consistent revenue growth over the last three financial years. Revenue from operations increased from ₹178.94 crore in FY2024 to ₹205.90 crore in FY2026. However, profitability experienced volatility, with Profit After Tax (PAT) dipping significantly in FY2025 before recovering in FY2026.

Cash flow from operations remained positive throughout the period, though it declined to ₹7.52 crore in FY2026 from ₹12.53 crore in FY2025. Net cash flow turned positive in FY2025 and improved to ₹0.64 crore in FY2026. Trade receivables stood at ₹28.80 crore as of March 31, 2026, representing approximately 50 debtor days.

Why the Company Is Raising Funds

The identified use of proceeds totals ₹20.58 crore, allocated as follows:

1. Capital Expenditure for Solar Power Plant: ₹3.62 crore for installation at three facilities to optimize energy consumption.
2. Capital Expenditure for Additional Machinery: ₹8.96 crore for procuring advanced plant and machinery, including Knife Cutting Machines and Foaming Pouring Machines.
3. Working Capital: ₹8.00 crore to meet incremental requirements for raw material procurement and inventory maintenance.
4. Inorganic Growth: A portion of proceeds is designated for unidentified acquisitions and general corporate purposes, subject to SEBI ICDR regulations.

Business Strengths

• Regulatory Compliance: Products meet critical BIS and international standards, enabling access to government and defence tenders.
• In-House Manufacturing: Vertical integration in sole production using German machinery enhances quality control and reduces supplier dependency.
• Capacity Headroom: With 64.23% utilization, the company has significant scope to scale production without immediate large-scale capital expenditure.
• Technology Integration: Use of SAP S/4 HANA ERP and ICad3D technology supports operational efficiency and product design.

Key Risks

• Customer Concentration: Top 10 customers accounted for 47.71% of total sales in FY2026, with the largest single customer contributing 12.13%.
• Certification Dependency: Loss or suspension of BIS licenses would disqualify the company from government procurement, materially impacting revenue.
• Raw Material Volatility: Costs are linked to crude oil derivatives and hide market dynamics, with limited ability to pass costs through under fixed-price government contracts.
• Related-Party Leases: Key factory premises are leased from promoter Nitin Tiwari and Rajasthan Tanning Industries on 11-month renewable terms, posing operational continuity risks.
• Compliance History: Past delays in GST, EPF, ESIC, and ROC filings may invite regulatory scrutiny.

Important IPO Dates

• IPO Opening Date: 28-Sep-2026
• IPO Closing Date: 30-Sep-2026
• Basis of Allotment: 01-Oct-2026
• Listing Date: 06-Oct-2026

Bottom Line

Acme Universal Safezone 9 Limited presents a growth story in the PPE sector with rising revenues and established compliance credentials. However, investors must weigh the thin and volatile margins, significant customer concentration, and related-party lease arrangements against the potential benefits of post-IPO capital expenditure aimed at improving energy efficiency and production capacity.