Ravita Engineering Services Limited, an engineering solutions provider specializing in HVAC and electro-mechanical systems, has filed its Draft Red Herring Prospectus for an initial public offering. The company proposes to raise ₹95.53 crore through a fresh issue, aiming to bolster working capital and fund capital expenditure amidst rapid business expansion.

About the Company

Incorporated in 2007 and headquartered in Navi Mumbai, Ravita Engineering Services Limited operates across three primary verticals: Onshore, Offshore, and Data Centre. The company provides end-to-end Engineering, Procurement, Installation, and Commissioning (EPIC) services for HVAC systems, central air-conditioning, chiller plants, and industrial compressors. It also offers Operation & Maintenance (O&M) services, creating a dual revenue structure that balances project-based income with recurring maintenance contracts.

The company serves commercial, industrial, offshore oil & gas, and data center clients across Maharashtra, Gujarat, Odisha, Karnataka, and India's territorial waters. As of June 2026, Ravita employed 399 people, including 368 engineering and technical staff, enabling rapid deployment across multiple sites.

Financial Performance

Ravita has demonstrated exceptional growth in recent years, with revenue from operations increasing from ₹13.49 crore in FY2024 to ₹277.63 crore in FY2026. Profit after tax (PAT) also rose significantly during this period, maintaining stable margins despite the scale-up.

While profitability metrics have improved, the company recorded negative operating cash flows in FY2025, FY2026, and Q1 FY2027, indicating that growth has been funded through working capital borrowings rather than internal cash generation.

Why the Company Is Raising Funds

The entire issue size of ₹95.53 crore is designated as a fresh issue. The proceeds will be utilized for two primary objectives:

1. Long-Term Working Capital Requirements: ₹70.00 crore will be allocated to meet incremental business needs arising from the growing order book across Onshore, Offshore, and Data Centre segments for FY2027 and FY2028.
2. Capital Expenditure: ₹25.53 crore will be used for the purchase of heavy equipment, including trucks, dumpers, dozers, and cranes, to reduce reliance on leased machinery and optimize operating costs.

A balance amount may be used for general corporate purposes, subject to regulatory limits.

Business Strengths

• Diversified Revenue Mix: The company balances short-to-medium cycle EPIC projects (76% of FY2026 revenue) with multi-year O&M contracts (24% of FY2026 revenue), providing both growth momentum and revenue stability.
• Strong Order Book: As of June 30, 2026, Ravita held a total order book of ₹491.12 crore, offering approximately 1.77x revenue visibility relative to FY2026 earnings.
• Specialized Expertise: The company has established capabilities in adverse environments, particularly in offshore oil & gas platforms and mission-critical data centers, which contributed 28.86% and 11.94% of FY2026 revenue, respectively.
• Repeat Client Base: Repeat clients contributed between 62.27% and 100% of revenues across recent periods, indicating strong customer retention and credibility in competitive tenders.

Key Risks

• Customer Concentration: The top five clients accounted for 78.65% of revenue in FY2026, down from 99.49% in FY2024 but still representing significant dependency.
• Negative Operating Cash Flows: Persistent negative cash flows from operations pose liquidity risks, necessitating external financing to sustain growth.
• Promoter and Management Continuity: A change in promoters occurred in February 2025. Additionally, a promoter group entity, M.R. Foods Private Limited, is under compulsory strike-off proceedings, which could impact director eligibility under the Companies Act.
• Regulatory Compliance: The company has faced delays in statutory filings, with some instances exceeding 1,600 days, raising concerns about historical compliance records.
• Geographic Concentration: Revenue remains heavily concentrated in Maharashtra, Gujarat, and territorial waters, exposing the business to regional economic or regulatory shifts.

Important IPO Dates

• IPO Open Date: October 13, 2026
• IPO Close Date: October 15, 2026

Offer Details

• Issue Type: Fresh Issue
• Fresh Issue Size: ₹95.53 crore
• Offer for Sale: Nil
• Price Band: Not Available
• Lot Size: Not Available

Bottom Line

Ravita Engineering Services presents a high-growth profile with revenue expanding over 20-fold in two years and a substantial order book providing near-term visibility. However, the company faces material risks related to negative operating cash flows, high customer concentration, and governance issues stemming from recent management changes and regulatory compliance gaps. The fresh issue aims to address these liquidity constraints and support further operational scaling.