{"id":23447,"date":"2026-10-15T12:28:37","date_gmt":"2026-10-15T06:58:37","guid":{"rendered":"https:\/\/www.moneyworks4me.com\/investmentshastra\/?p=23447"},"modified":"2026-10-15T17:13:02","modified_gmt":"2026-10-15T11:43:02","slug":"zetwerk-manufacturing-ipo-expert-review-and-recommendations","status":"publish","type":"post","link":"https:\/\/www.moneyworks4me.com\/investmentshastra\/zetwerk-manufacturing-ipo-expert-review-and-recommendations\/","title":{"rendered":"Zetwerk Manufacturing IPO review: Our Opinion"},"content":{"rendered":"
\n

Zetwerk is a manufacturer that works to order. A business that needs a product, such as a transformer, solar parts or heavy machinery, gives Zetwerk the order. Zetwerk then makes it, either in its own 26 plants or through 6,979 outside factories that it manages. It works like a marketplace for factory capacity, but Zetwerk stays responsible for quality and delivery.<\/p>\n

How Zetwerk makes money<\/p>\n

\n

Manufacturing: 59% of sales<\/p>\n

Zetwerk makes goods to order, such as solar parts, transformers and electronics, partly in its own 26 plants and partly through outside factories it manages. It earns about 6% operating margin.<\/p>\n<\/div>\n

\n

Metals trading: 41% of sales<\/p>\n

This is a separate trading arm. It buys and sells steel, aluminium and copper without making anything, a high-volume, low-profit business with a margin of about 1.2%.<\/p>\n<\/div>\n

\n

Customers who come back<\/p>\n

80% of manufacturing sales come from existing customers, and orders worth \u20b913,062 Cr are yet to be delivered.<\/p>\n<\/div>\n

\n
\n
Price band<\/div>\n
\u20b9143 to \u20b9151<\/div>\n
Anchors paid \u20b9151. One lot is 99 shares<\/div>\n<\/div>\n
\n
Issue size at \u20b9151<\/div>\n
\u20b95,012 Cr<\/div>\n
\u20b92,830 Cr new shares, \u20b92,182 Cr sold by owners<\/div>\n<\/div>\n<\/div>\n
\n
\n
Market cap at \u20b9151<\/div>\n
\u20b925,582 Cr<\/div>\n
Counting all new shares<\/div>\n<\/div>\n
\n
Sales, FY26<\/div>\n
\u20b915,913 Cr<\/div>\n
Up 40% on FY25<\/div>\n<\/div>\n
\n
Loss after tax, FY26<\/div>\n
\u20b91,606 Cr<\/div>\n
Loss in every year shown<\/div>\n<\/div>\n
\n
Anchor book<\/div>\n
\u20b92,251 Cr<\/div>\n
99 investors paid \u20b9151<\/div>\n<\/div>\n<\/div>\n

Key dates<\/p>\n

\n
Anchor bidding<\/span>Wed 14 Oct<\/b><\/div>\n
Issue opens<\/span>Thu 15 Oct<\/b><\/div>\n
Issue closes<\/span>Mon 19 Oct<\/b><\/div>\n
Allotment<\/span>Wed 21 Oct<\/b>on or about<\/span><\/div>\n
Listing<\/span>Fri 23 Oct<\/b>on or about<\/span><\/div>\n<\/div>\n<\/section>\n
\n

Orders \u00b7 Sales mix \u00b7 Margins<\/p>\n

Orders are strong, but low-margin metal trading is over half of sales<\/h1>\n
\n
\n
Order book<\/div>\n
\u20b913,062 Cr<\/div>\n
Orders not yet delivered, June 2026. Double the March 2024 level<\/div>\n<\/div>\n
\n
Repeat customers<\/div>\n
80%<\/div>\n
Share of FY26 manufacturing sales from existing customers<\/div>\n<\/div>\n
\n
Top ten customers<\/div>\n
36%<\/div>\n
Share of FY26 sales. It was 22% in FY24<\/div>\n<\/div>\n<\/div>\n

Where FY26 sales came from<\/p>\n

\n

Metals and raw materials<\/p>\n

\n
<\/div>\n<\/div>\n

\u20b96,539 Cr 41.1%<\/span><\/p>\n<\/div>\n

\n

Energy products<\/p>\n

\n
<\/div>\n<\/div>\n

\u20b96,508 Cr 40.9%<\/span><\/p>\n<\/div>\n

\n

Capital goods<\/p>\n

\n
<\/div>\n<\/div>\n

\u20b91,464 Cr 9.2%<\/span><\/p>\n<\/div>\n

\n

Precision products<\/p>\n

\n
<\/div>\n<\/div>\n

\u20b91,397 Cr 8.8%<\/span><\/p>\n<\/div>\n

Profit margin by business, FY26<\/p>\n

\n

Manufacturing<\/p>\n

\n
<\/div>\n<\/div>\n

6.0%<\/span><\/p>\n<\/div>\n

\n

Metals and raw materials<\/p>\n

\n
<\/div>\n<\/div>\n

1.2%<\/span><\/p>\n<\/div>\n

\n

Whole company<\/p>\n

\n
<\/div>\n<\/div>\n

2.65%<\/span><\/p>\n<\/div>\n

Operating profit before interest, tax and depreciation, as a share of sales.<\/p>\n

\n

Key takeaway<\/p>\n

In FY26, metals made 41.1% of sales (\u20b96,539 Cr), energy products 40.9% (\u20b96,508 Cr), capital goods 9.2% and precision products 8.8%, so manufacturing was the other 58.9%. Manufacturing earns a 6.0% margin against 1.2% for metals and 2.65% for the whole company, and metals rose to 54% of April to June 2026 sales at about 1.4%, so the mix is moving toward the weaker business. The market is large, with Indian businesses buying \u20b917.4 trillion of durable goods in FY26 and \u20b937.5 to 42.6 trillion forecast by FY31 in a report paid for by the company, of which Zetwerk has about 1.5%. The top ten customers took 36% of FY26 sales, up from 22% in FY24.<\/p>\n<\/div>\n<\/section>\n

\n

Sales \u00b7 Losses \u00b7 Cash, FY24 to June 2026<\/p>\n

Sales are rising fast, but losses and cash burn continue<\/h1>\n
\n
\n

Sales (\u20b9 Cr)<\/p>\n

Up 40% in FY26<\/p>\n

\n
12,364<\/span><\/div>\n
11,332<\/span><\/div>\n
15,913<\/span><\/div>\n<\/div>\n
FY24<\/span>FY25<\/span>FY26<\/span><\/div>\n<\/div>\n
\n

Loss after tax (\u20b9 Cr)<\/p>\n

Loss in every year<\/p>\n

\n
-918<\/span><\/div>\n
-371<\/span><\/div>\n
-1,606<\/span><\/div>\n<\/div>\n
FY24<\/span>FY25<\/span>FY26<\/span><\/div>\n<\/div>\n
\n

Cash from operations (\u20b9 Cr)<\/p>\n

Negative in every year<\/p>\n

\n
-282<\/span><\/div>\n
-386<\/span><\/div>\n
-682<\/span><\/div>\n<\/div>\n
FY24<\/span>FY25<\/span>FY26<\/span><\/div>\n<\/div>\n<\/div>\n

The numbers<\/p>\n

\n
\n\n\n\n\n\n\n\n
<\/th>\nFY24<\/th>\nFY25<\/th>\nFY26<\/th>\nApr-Jun 2026<\/th>\n<\/tr>\n
Sales (\u20b9 Cr)<\/td>\n12,364<\/td>\n11,332<\/td>\n15,913<\/td>\n4,118<\/td>\n<\/tr>\n
Operating profit (\u20b9 Cr)<\/td>\n97<\/td>\n323<\/td>\n421<\/td>\n103<\/td>\n<\/tr>\n
Loss before one-offs and tax (\u20b9 Cr)<\/td>\n-427<\/td>\n-121<\/td>\n-81<\/td>\n-51<\/td>\n<\/tr>\n
Loss after tax (\u20b9 Cr)<\/td>\n-918<\/td>\n-371<\/td>\n-1,606<\/td>\n-733<\/td>\n<\/tr>\n
Loss per share (\u20b9)<\/td>\n-5.23<\/td>\n-2.03<\/td>\n-11.02<\/td>\n-4.82<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n

Continuing businesses. April to June is three months. Sales in that quarter were 55% above a year earlier.<\/p>\n

\n

Key takeaway<\/p>\n

Sales rose 40% to \u20b915,913 Cr in FY26 and were up 55% in April to June 2026. The FY26 loss of \u20b91,606 Cr is mostly one-off, since it includes a non-cash charge on investors\u2019 preferred shares and the write-down of a civil construction business that is being closed. The everyday business is improving, with the loss before one-offs and tax shrinking from \u20b9427 Cr in FY24 to \u20b981 Cr in FY26. Cash is the concern: operations used \u20b9682 Cr in FY26 and \u20b9506 Cr in April to June 2026, and cash and investments fell from \u20b93,339 Cr in March to \u20b92,597 Cr in June. Losses are narrowing, but Zetwerk has never made a profit and still burns cash.<\/p>\n<\/div>\n<\/section>\n

\n

Use of money \u00b7 Sellers \u00b7 Anchors \u00b7 Price<\/p>\n

Most of the new money repays debt, and there is no peer to value it against<\/h1>\n

What the new money is for<\/p>\n

\n

Repay the company\u2019s loans<\/p>\n

\n
<\/div>\n<\/div>\n

\u20b91,300 Cr 46%<\/span><\/p>\n<\/div>\n

\n

Repay loans of subsidiaries<\/p>\n

\n
<\/div>\n<\/div>\n

\u20b9860 Cr 30%<\/span><\/p>\n<\/div>\n

\n

Acquisitions and general use<\/p>\n

\n
<\/div>\n<\/div>\n

\u20b9670 Cr 24%<\/span><\/p>\n<\/div>\n

Debt repayment is 76% of the new money. The balance is before offer costs. Borrowings were \u20b95,208 Cr on 31 August 2026.<\/p>\n

Who sells<\/p>\n

24 existing shareholders sell 9.59% of the company. The two founders sell about 11 to 12% of their own stakes, and the company gets none of that money. Greenoaks, the largest holder at 20%, is not selling.<\/p>\n

The anchor book<\/p>\n

99 anchors put in \u20b92,251 Cr at \u20b9151. Indian mutual funds took 45.6%, foreign funds 45.0% and life insurers 7.4%. Half the anchor shares are locked in for 30 days and the rest for 90 days.<\/p>\n

What \u20b9151 means<\/p>\n

\n
\n
Price to sales<\/div>\n
1.4x<\/div>\n
Market cap against FY26 sales<\/div>\n<\/div>\n
\n
Price to book value<\/div>\n
5.8x<\/div>\n
Book value is \u20b925.85 a share<\/div>\n<\/div>\n
\n
P\/E<\/div>\n
Not meaningful<\/div>\n
Loss of \u20b911.02 a share in FY26<\/div>\n<\/div>\n<\/div>\n

The offer document says no listed company runs a similar business, so there is no peer to compare the price with. At the \u20b9143 low end, the figures are 1.35x sales and 5.5x book value.<\/p>\n

\n

Key takeaway<\/p>\n

At \u20b9151 the shares cost 1.4 times sales and 5.8 times book value, with no profit and no listed peer to compare.<\/p>\n<\/div>\n<\/section>\n

\n

Anchor price \u20b9151 \u00b7 Auditor warnings \u00b7 No listed peer<\/p>\n

Fast growth, but big losses, auditor warnings and no peer<\/h1>\n
\n
\n
Sales, FY26<\/div>\n
\u20b915,913 Cr<\/div>\n
Up 40%<\/div>\n<\/div>\n
\n
Loss after tax, FY26<\/div>\n
\u20b91,606 Cr<\/div>\n
\u20b9733 Cr in April to June 2026<\/div>\n<\/div>\n
\n
Cash from operations<\/div>\n
-\u20b9682 Cr<\/div>\n
FY26<\/div>\n<\/div>\n
\n
Listing P\/E<\/div>\n
Not meaningful<\/div>\n
Loss-making. Price used: \u20b9151<\/div>\n<\/div>\n<\/div>\n
\n
\n
In its favour<\/div>\n
\n

Fast sales growth<\/p>\n

Up 40% in FY26 and 55% in April to June 2026.<\/p>\n<\/div>\n

\n

Orders are building<\/p>\n

Order book of \u20b913,062 Cr, double March 2024.<\/p>\n<\/div>\n

\n

Everyday losses shrinking<\/p>\n

\u20b9427 Cr in FY24 down to \u20b981 Cr in FY26.<\/p>\n<\/div>\n

\n

Customers come back<\/p>\n

80% of manufacturing sales are repeat business.<\/p>\n<\/div>\n

\n

Strong anchor book<\/p>\n

\u20b92,251 Cr, 53% from Indian funds and insurers.<\/p>\n<\/div>\n<\/div>\n

\n
Against it<\/div>\n
\n

Large losses and cash burn<\/p>\n

\u20b91,606 Cr loss in FY26. Operations used cash in every period.<\/p>\n<\/div>\n

\n

Auditor warnings<\/p>\n

No opinion on internal controls in FY24, a qualified opinion in FY25, and audit-trail gaps in FY26.<\/p>\n<\/div>\n

\n

Legal cases<\/p>\n

Founders are named in a fraud complaint over a road project.<\/p>\n<\/div>\n

\n

Thin-margin sales rising<\/p>\n

Metals were 54% of the latest quarter at about 1% margin.<\/p>\n<\/div>\n

\n

No peer to value it against<\/p>\n

5.8 times book value for a loss-making company.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

\n

Our opinion<\/p>\n

Avoid this IPO<\/h2>\n

Zetwerk is having negative PAT and its auditors have warned about weak controls. A strong anchor book does not remove these flags. Do not apply for this IPO and track the performance of the company for 1-2yrs once the company is listed before buying from the secondary market.<\/p>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

Zetwerk is a manufacturer that works to order. A business that needs a product, such as a transformer, solar parts or heavy machinery, gives Zetwerk the order.<\/p>\n","protected":false},"author":715,"featured_media":23451,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_is2025_no_summary":false,"footnotes":""},"categories":[822],"tags":[],"class_list":["post-23447","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ipo-fpo-analysis"],"_links":{"self":[{"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/posts\/23447","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/users\/715"}],"replies":[{"embeddable":true,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/comments?post=23447"}],"version-history":[{"count":5,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/posts\/23447\/revisions"}],"predecessor-version":[{"id":23471,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/posts\/23447\/revisions\/23471"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/media\/23451"}],"wp:attachment":[{"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/media?parent=23447"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/categories?post=23447"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/tags?post=23447"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}