Initial public offer · Defence electronics
Tonbo Imaging India IPO review: Our Opinion
Tonbo designs thermal cameras, weapon sights and missile seekers for armies and security forces. The work is done in Bengaluru, where it has 339 permanent staff, and partner factories build the units. The IPO is a sale of 21% of the company by 13 existing shareholders.
How Tonbo makes money
Tactical systems: 58% of sales
Weapon sights, hand-held binoculars and targeting systems that soldiers carry. A thermal camera shows the heat given off by people and vehicles, so a soldier can see in the dark. This line was 84% of sales in FY24.
Platform systems: 40% of sales
Cameras and sights fitted to vehicles and drones, plus missile seekers, the sensors in a missile’s nose.
Who buys it
The Indian government bought 71% of FY26 sales, mostly through tenders. Tonbo won 45 of 131 bids (34%). System integrators, who fit its cameras into larger systems, took 24%. Confirmed orders were ₹314 Cr in June 2026.
How an order turns into money
Tonbo wins a tender, and 130 of its engineers design the product. Tonbo owns all the designs and spent ₹26 Cr on research in FY26. Partners such as Kaynes Technology build the units. Payment is slow, with customers taking 212 days.
Why customers pick Tonbo
It supplies about 51% of the thermal sights the Indian government buys, and its products are free of ITAR, a US rule limiting who American defence technology can be sold to.
Key dates
Sales mix · Customers · Orders
A leader in thermal sights, but with very few customers
Where FY26 sales came from
Tactical systems
58.4%
Platform systems
39.9%
Other
1.7%
Who bought, share of FY26 sales
Indian government
71.2%
System integrators
24.1%
Foreign governments
3.3%
Other operating income
1.4%
Tender record
Key takeaway
Tonbo supplied about 51% of the thermal sights the Indian government bought and 94% of India’s thermal exports by units, in a report paid for by the company. India’s defence electronics market was US$10.6 billion in 2025 and is forecast at US$17.6 billion by 2030, about 11% a year. The business is lumpy, though. Ten customers took 78% of FY26 sales, overseas sales swung from 66% to 6% of the total in a year, orders come through tenders, and partner factories build the units.
Sales · Profit · Cash, FY24 to June 2026
Margins are high, but sales, profit and cash flow weakened
Sales (₹ Cr)
Down 22.7% in FY26
Profit after tax (₹ Cr)
Down 30% in FY26
Cash from operations (₹ Cr)
Negative in FY25 and FY26
The numbers
| FY24 | FY25 | FY26 | Apr-Jun 2026 | |
|---|---|---|---|---|
| Sales (₹ Cr) | 428.2 | 469.1 | 362.6 | 36.0 |
| EBITDA margin (%) | 26.23 | 29.65 | 28.85 | -36.21 |
| Profit after tax (₹ Cr) | 68.5 | 72.8 | 50.9 | -17.7 |
| Profit per share (₹) | 13.63 | 12.70 | 8.88 | -3.20 |
| Cash from operations (₹ Cr) | 78.3 | -136.1 | -63.2 | -14.7 |
| Return on equity (%) | 52.7 | 20.2 | 9.8 | -3.2 |
Year ends 31 March. April to June is three months, and most of the company’s revenue comes in the second half. EBITDA is operating profit before interest, tax and wear on assets.
Key takeaway
Tonbo earns high margins for a hardware business, with an EBITDA margin of 28.9% in FY26. But sales fell 22.7% to ₹363 Cr, profit fell 30% to ₹51 Cr and return on equity dropped from 20.2% to 9.8%. The company blames overseas orders that slipped and moved into FY27, and the April to June 2026 quarter was a loss of ₹18 Cr. Cash is the bigger worry. Operations used ₹136 Cr in FY25 and ₹63 Cr in FY26 as cash got stuck in stock and unpaid sales, and the company moved from net cash to net debt. The ₹314 Cr order book has to turn into sales and cash in the second half.
Sale by existing holders · Anchors · Closest peer
Early investors sell, and the P/E is 33% below the peer
Who sells
Two CEAQ companies
75.2% of the offer
Three promoters
16.1%
Eight other holders and a promoter group firm
8.7%
The anchor book
43 anchors put in ₹255 Cr at ₹700. Indian mutual funds took 57.7%, foreign funds 34.4% and life insurers 7.8%. Half of their shares are locked in for 30 days and the rest for 90 days.
Against the closest listed peer, Paras Defence
| Tonbo at ₹700 | Paras | |
|---|---|---|
| Sales growth, FY26 (%) | -22.7 | 30.7 |
| Profit per share (₹) | 8.88 | 10.93 |
| P/E | 78.8x | 117.7x |
Key takeaway
At ₹700 the shares cost 78.8 times FY26 profit against 117.7 times for Paras. Paras is growing, with sales up 31%, while Tonbo’s sales fell 23%, so a lower P/E is not surprising.
Anchor price ₹700 · Strong anchor demand · 33% below closest peer
A strong thermal sight maker, but a weak year
Strong anchor book
43 funds put in ₹255 Cr at ₹700. Indian mutual funds and insurers took 66%.
Leader in thermal sights
About 51% of thermal sights bought by the Indian government.
High margins
EBITDA margin of 28.9% in FY26 and 29.6% in FY25.
Orders in hand
₹314 Cr of confirmed orders, against FY26 sales of ₹363 Cr.
Priced below its peer
78.8x P/E against 117.7x for Paras, 33% below.
Sales and profit fell
Sales down 22.7% and profit down 30% in FY26. The April to June 2026 quarter was a loss.
Cash flow is negative
Operations used ₹136 Cr in FY25 and ₹63 Cr in FY26. Customers take 212 days to pay.
Few big customers
Top ten took 77.8% of FY26 sales.
Complaints and court cases
Allegations and a lawsuit against the company. None has a ruling.
The sellers are early investors
The company gets nothing. Two CEAQ companies sell 75%.
Our opinion
Apply for listing gains
Strong demand from 43 anchor funds and a P/E 33% below the closest peer support a listing gain. Sales, profit and cash flow all weakened in FY26, so this is not a case for holding long term.
