Zetwerk Manufacturing Business Limited, a technology-led asset-light manufacturing platform incorporated in December 2017, has filed its Draft Red Herring Prospectus for an initial public offering. The company operates across industrial and consumer goods segments in India and globally, leveraging its proprietary Zetwerk OS to aggregate manufacturing capacity through a network of 6,979 third-party suppliers and 26 own facilities.

About the Company

Headquartered in Bengaluru, Zetwerk operates through two reportable business segments: the Manufacturing Business and the Ecosystem Business (Terra91). The Manufacturing Business includes Energy Products, Precision Products, and Capital Goods, contributing significantly to the company's order book of ₹13,062.40 crore as of 30 June 2026. The Ecosystem Business aggregates raw material demand, serving 828 customers in FY2026.

The company serves 1,802 customers across 29 countries, including Siemens Gamesa, Acer India, boAt, NTPC, and the Indian Air Force. Its hybrid model combines third-party supplier scalability with selective own-facility control, achieving a first-pass rate of approximately 99% on third-party supplier orders in FY2026. International Manufacturing Business revenue stood at ₹2,775.36 crore in FY2026, representing 29.60% of the segment's revenue.

Financial Performance

The company has demonstrated strong top-line recovery following a dip in FY2025. Revenue from operations grew by 40.43% year-on-year to ₹15,913.32 crore in FY2026. However, profitability remains a challenge, with net losses reported across all disclosed periods. Operating cash flows have remained negative throughout the reported timeframe, indicating reliance on financing activities to fund operations.

Total outstanding borrowings on a consolidated basis were ₹5,208.07 crore as of 31 August 2026. Non-current liabilities increased sharply from ₹252.21 crore in FY2025 to ₹1,244.04 crore in FY2026, reflecting significant long-term debt addition.

Why the Company Is Raising Funds

The primary objective of the fresh issue is debt reduction. The company plans to utilize ₹1,300.00 crore for the repayment or prepayment of borrowings at the company level. An additional ₹860.00 crore is allocated for subsidiary-level debt repayment via investments in entities such as Sharp Tanks, Terra91, Smile Electronics, Kryfs Power, Kryfs Transformers, Unimacts Global, Zetwerk Singapore, Zap91 Solar, and Zet Town. Remaining proceeds are designated for funding inorganic growth through acquisitions and general corporate purposes, subject to SEBI ICDR caps.

Business Strengths

The company highlights its asset-light model, which aggregates capacity from 6,979 third-party suppliers across 26 countries while maintaining 26 own facilities. This structure supports a Manufacturing Business Return on Capital Employed (ROCE) of 22.75% in FY2026. Customer retention metrics remain robust, with a median Net Revenue Retention (NRR) of 128.85% for the Manufacturing Business between FY2023 and FY2026. Revenue from repeat customers accounted for 80.15% of the total in FY2026. Additionally, the share of Gross Merchandise Value (GMV) from recurring components rose to 71.20% in Q1 FY2027, enhancing revenue predictability.

Key Risks

Material risks disclosed include sustained losses from continuing and discontinued operations, with restated losses from continuing operations reaching ₹9,643.93 million in FY2026. Negative operating cash flows across all reported periods pose liquidity challenges. The company faces high indebtedness with restrictive covenants under financing agreements, where non-compliance could trigger accelerated repayment. Reliance on third-party suppliers for up to 96.51% of combined segment revenue exposes the company to supply disruptions and price volatility in raw materials like aluminium and copper. Statutory auditor emphasis of matter paragraphs regarding uncertain receivables and internal control weaknesses also present governance concerns.

Important IPO Dates

• IPO Opening Date: 15-Oct-2026
• IPO Closing Date: 19-Oct-2026
• Allotment Date: 21-Oct-2026
• Listing Date: 23-Oct-2026

Offer Details

The offering consists solely of a fresh issue component totaling ₹2,160.00 crore for identified debt repayment purposes, alongside unspecified amounts for acquisitions and general corporate purposes. No Offer for Sale (OFS) component is detailed in the provided data. Price band, face value, and lot size details are not currently available in the supplied filing information.

Bottom Line

Zetwerk Manufacturing Business Limited presents a growth story marked by a 40.43% revenue increase in FY2026 and a substantial order book of ₹13,062.40 crore. However, the filing underscores persistent net losses and negative operating cash flows, with the primary use of IPO proceeds directed toward reducing a ₹5,208.07 crore debt burden. The success of the platform will depend on converting its technology-led asset-light model into sustainable profitability while managing significant working capital requirements.