Teja Engineering IPO opens June 30 to fund expansion
Teja Engineering Industries Limited plans to raise ₹32.77 crore via an SME IPO opening June 30, 2026, to fund capital expenditure and working capital. The Gujarat-based O&M services provider reported revenue growth to ₹55.22 crore in FY2025, with PAT rising to ₹4.02 crore, though operating cash flows remain negative.
*this image is generated using AI for illustrative purposes only.
Teja Engineering Industries Limited is set to open its initial public offering on June 30, 2026, with the issue scheduled to close on July 2, 2026. The company plans to raise ₹32.77 crore through the issue, primarily to fund capital expenditure for equipment and working capital requirements. The offering targets the SME platform, though the specific exchange and price band were not disclosed in the draft red herring prospectus.
The Gujarat-based firm specializes in Operation & Maintenance (O&M), Erection & Commissioning, and testing services for the Oil & Gas, Power, and Energy sectors. Its financial performance shows significant revenue growth, climbing from ₹24.58 crore in FY2023 to ₹55.22 crore in FY2025. Profit after tax improved from ₹1.27 crore in FY2023 to ₹4.02 crore in FY2025, with PAT margins expanding to 7.28%.
Financial Performance
The company has demonstrated robust top-line expansion over the past two years. For the nine-month period ending December 31, 2025, revenue from operations stood at ₹54.32 crore, while profit after tax reached ₹4.00 crore.
| Period | Revenue from Operations (₹ Cr) | Total Expenses (₹ Cr) | PAT (₹ Cr) | PAT Margin (%) |
|---|---|---|---|---|
| FY2023 | 24.58 | 22.87 | 1.27 | 5.17% |
| FY2024 | 31.62 | 28.67 | 2.16 | 6.83% |
| FY2025 | 55.22 | 49.86 | 4.02 | 7.28% |
| 9M FY2026 | 54.32 | 48.83 | 4.00 | 7.36% |
Despite the profitability growth, the company reported negative operating cash flows across all reported periods. Cash from operations was negative ₹0.77 crore in FY2023, negative ₹9.07 crore in FY2024, negative ₹0.92 crore in FY2025, and negative ₹2.92 crore in the nine months of FY2026.
Objects of the Issue
Teja Engineering intends to utilize the net proceeds from the issue for specific growth-oriented activities. The total estimated issue size is ₹32.77 crore.
| Purpose | Amount (₹ Crore) | % of Total |
|---|---|---|
| Funding Capital Expenditure | 18.01 | 54.96% |
| Funding Working Capital Requirements | 9.26 | 28.26% |
| General Corporate Purpose | 5.50 | 16.78% |
| Total | 32.77 | 100.00% |
The capital expenditure allocation of ₹18.01 crore will be used to purchase natural gas compressor packages, safety valve testing equipment, calibration instruments, and vehicles. The working capital funds of ₹9.26 crore are earmarked to support business operations and manage receivables.
Operational Overview and Risks
The company manages 728 active O&M sites as of November 30, 2025, and employs 2,927 people as of May 31, 2026. It operates across 15 states, including Gujarat, Maharashtra, and Tamil Nadu, serving public sector undertakings and OEMs. O&M services contribute between 88.14% and 94.28% of total revenue.
Investors should note several risk factors highlighted in the prospectus. The top 10 customers contribute over 98% of revenue, with the single largest customer accounting for up to 85.68% in certain periods. Additionally, critical PESO certifications are currently held in the name of an acquired proprietorship firm and are in the process of being transferred. The prospectus also notes 26 instances of delayed statutory filings and unregistered lease agreements for operational premises.
How will the company address the disconnect between rising profitability and persistent negative operating cash flows post-IPO?
What strategies are being implemented to reduce the extreme client concentration risk where the top customer accounts for nearly 86% of revenue?
Will the successful transfer of critical PESO certifications from the acquired proprietorship firm be completed before the IPO opens?
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