Ahmedabad-based FX Multitech Limited, a distributor of HVAC and industrial refrigeration products, has filed its Draft Red Herring Prospectus (DRHP) for an initial public offering. The company reported consolidated revenue from operations of ₹126.14 crore in FY2025-26, up from ₹102.01 crore in the previous year.

About the Company

Incorporated in 2008, FX Multitech Limited operates as a distributor and exporter of heating, ventilation, air conditioning, and industrial refrigeration components. The company sources products such as compressors, refrigeration controls, variable frequency drives, heat exchangers, and refrigerants from global brands including Danfoss, Honeywell, and Testo. It maintains a multi-warehouse distribution network with facilities in Ahmedabad, Kolkata, Thane, Bangalore, and Hyderabad. Additionally, the company holds a 51% equity stake in Everestt Chillers Private Limited, which manufactures customized industrial and glycol chillers.

Financial Performance

The company demonstrated revenue growth over the last two fiscal years. Standalone revenue from operations increased from ₹68.52 crore in FY2023-24 to ₹111.57 crore in FY2025-26. On a consolidated basis, revenue grew by 23.66% year-on-year to ₹126.14 crore in FY2025-26. Consolidated profit after tax stood at ₹11.80 crore for FY2025-26, compared to ₹9.55 crore in FY2024-25.

Despite profitability, the company reported negative consolidated operating cash flows of ₹(0.99) crore in FY2025-26 and ₹(1.93) crore in FY2024-25. Current assets constituted approximately 90% of total consolidated assets, reflecting the working capital-intensive nature of the business.

Why the Company Is Raising Funds

The proceeds from the fresh issue are intended for specific corporate purposes:

• Repayment or pre-payment of borrowings: ₹10.00 crore
• Investment in subsidiary (Everestt Chillers) for machinery purchase: ₹6.26 crore
• Funding of working capital requirements: ₹14.83 crore
• General corporate purposes: Up to 15% of amount raised or ₹10 crore, whichever is lower

Business Strengths

The company cites its established relationships with global suppliers across Europe and Asia as a key strength. Its wide distribution network, supported by five strategically located warehouses, enables timely service delivery. The diversified product portfolio across HVAC, refrigeration, and automation sectors reduces dependence on any single industry segment. Furthermore, the promoters, Mr. Subhash Agarwal and Mr. Selvaraj Rangaswamy, bring over six decades of combined industry experience.

Key Risks

Investors are advised to consider several material risks disclosed in the DRHP. The company sources approximately 74.11% of its total purchases from a single supplier in FY2025-26, creating significant supply chain concentration risk. It operates entirely on purchase orders without long-term customer contracts, limiting revenue visibility. Additionally, the company faces geographical concentration, with nearly 78% of domestic revenue derived from three states. Negative operating cash flows and high working capital intensity, with inventories representing 44.55% of total assets, are also highlighted as risks.

Important IPO Dates

• IPO Opening Date: 21-Sep-2026
• IPO Closing Date: 23-Sep-2026
• Basis of Allotment: 24-Sep-2026
• Listing Date: 28-Sep-2026

Offer Details

The issue is structured as a fresh issue. Details regarding the offer for sale, price band, lot size, and face value are not yet available in the filing.

Bottom Line

FX Multitech Limited presents a growth story in the HVAC distribution sector with improving revenue and profitability metrics. However, the business model is characterized by high working capital intensity, negative operating cash flows, and significant concentration risks regarding suppliers and geography. The proposed use of proceeds aims to strengthen the balance sheet through debt repayment and enhance manufacturing capabilities via its subsidiary.