{"id":23460,"date":"2026-10-15T15:38:45","date_gmt":"2026-10-15T10:08:45","guid":{"rendered":"https:\/\/www.moneyworks4me.com\/investmentshastra\/?p=23460"},"modified":"2026-10-15T17:04:11","modified_gmt":"2026-10-15T11:34:11","slug":"bonfiglioli-transmissions-ipo-review-our-opinion","status":"publish","type":"post","link":"https:\/\/www.moneyworks4me.com\/investmentshastra\/bonfiglioli-transmissions-ipo-review-our-opinion\/","title":{"rendered":"Bonfiglioli Transmissions IPO review: Our Opinion"},"content":{"rendered":"
\n

Bonfiglioli makes the gearboxes and drives that move conveyors, excavators and wind turbines. It is the Indian arm of Italy\u2019s Bonfiglioli group, which owns all of it, and sells directly to over 930 customers. The IPO is a sale of 23% of the company by the parent.<\/p>\n

How Bonfiglioli makes money<\/p>\n

\n

Industry and automation: 41% of sales (\u20b9824 Cr)<\/p>\n

Sells gear motors, a gearbox joined to an electric motor, to makers of conveyors, packaging lines, robots and other factory machines. It is the largest line and grew 23% in the latest six months.<\/p>\n<\/div>\n

\n

Wind: 31% of sales (\u20b9635 Cr)<\/p>\n

Makes the gearboxes and the drives that turn the turbine head into the wind and tilt the blades. It holds about 68% of the Indian wind-drive market, but sales were flat in the latest six months.<\/p>\n<\/div>\n

\n

Excavators and mixers: 25% of sales (\u20b9507 Cr)<\/p>\n

Makes drives for construction machines, designed together with each customer from the start. This is the fastest-growing line, up 36% in the latest six months.<\/p>\n<\/div>\n

\n

How the goods are made and sold<\/p>\n

Three plants (two in Tamil Nadu, one near Pune) made 3.41 lakh units in FY25. 63% of sales go direct to machine makers and 19% through 44 dealers. The company earns an 18% operating margin, pays 4.4% of sales to the Italian parent as royalty for the brand and designs, and customers take 94 days to pay.<\/p>\n<\/div>\n

\n
\n
Issue size at \u20b9586<\/div>\n
\u20b92,534 Cr<\/div>\n
All 4.32 crore shares are sold by the parent. The company gets nothing<\/div>\n<\/div>\n
\n
Price used<\/div>\n
\u20b9586<\/div>\n
Anchor price paid on 14 October<\/div>\n<\/div>\n<\/div>\n
\n
\n
Market cap at \u20b9586<\/div>\n
\u20b911,017 Cr<\/div>\n
18.80 crore shares<\/div>\n<\/div>\n
\n
Sales, FY25<\/div>\n
\u20b92,014 Cr<\/div>\n
Up 8.6%. Jan to Jun 2026 up 17.9%<\/div>\n<\/div>\n
\n
Listing P\/E<\/div>\n
46.3x<\/div>\n
FY25 profit after tax \u20b9238 Cr, \u20b912.65 a share<\/div>\n<\/div>\n
\n
Anchor book<\/div>\n
\u20b9759 Cr<\/div>\n
73 funds bought at \u20b9586<\/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

Sales mix \u00b7 Customers \u00b7 Links with the parent<\/p>\n

A market leader, but one that leans on its Italian parent<\/h1>\n
\n
\n
Direct customers<\/div>\n
930+<\/div>\n
Top ten took 36.6% of FY25 sales<\/div>\n<\/div>\n
\n
Plant use<\/div>\n
75%<\/div>\n
Of capacity, Jan to Jun 2026. It was 64% in FY23<\/div>\n<\/div>\n
\n
Customers pay in<\/div>\n
94 days<\/div>\n
FY25. It was 80 days in FY24<\/div>\n<\/div>\n
\n
Group share of sales<\/div>\n
15%<\/div>\n
Sold to group companies in FY25<\/div>\n<\/div>\n<\/div>\n

Where FY25 sales came from<\/p>\n

\n

Industry and automation<\/p>\n

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

\u20b9824 Cr 40.9%<\/span><\/p>\n<\/div>\n

\n

Wind industry<\/p>\n

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

\u20b9635 Cr 31.5%<\/span><\/p>\n<\/div>\n

\n

Excavators and mixers<\/p>\n

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

\u20b9507 Cr 25.2%<\/span><\/p>\n<\/div>\n

\n

Others<\/p>\n

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

\u20b947 Cr 2.3%<\/span><\/p>\n<\/div>\n

Who bought, share of FY25 sales<\/p>\n

\n

Direct to makers<\/p>\n

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

63.3%<\/span><\/p>\n<\/div>\n

\n

Through dealers<\/p>\n

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

19.4%<\/span><\/p>\n<\/div>\n

\n

Group companies<\/p>\n

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

15.2%<\/span><\/p>\n<\/div>\n

\n

Others<\/p>\n

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

2.1%<\/span><\/p>\n<\/div>\n

\n

Key takeaway<\/p>\n

Bonfiglioli serves three growing end markets and is the largest Indian maker in each, with 68% of wind drives, 32% of off-highway drives and 25% of industrial gear motors. These markets were worth \u20b95,850 Cr in FY26 and are forecast to reach \u20b98,940 Cr by FY31, about 9% a year, in a report paid for by the company. The group is both customer and supplier: group companies bought 15% of FY25 sales, the biggest supplier is a group company, and Bonfiglioli pays the parent 4.4% of sales (\u20b989 Cr in FY25) in royalty. Ten customers took 36.6% of sales, and wind, a third of sales, was flat in the latest six months.<\/p>\n<\/div>\n<\/section>\n

\n

Sales \u00b7 Profit \u00b7 Cash, FY23 to June 2026<\/p>\n

Profits are rising, but cash has not kept pace<\/h1>\n
\n
\n

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

Up 8.6% in FY25<\/p>\n

\n
1,687<\/span><\/div>\n
1,854<\/span><\/div>\n
2,014<\/span><\/div>\n<\/div>\n
FY23<\/span>FY24<\/span>FY25<\/span><\/div>\n<\/div>\n
\n

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

Up 24% in FY25<\/p>\n

\n
147<\/span><\/div>\n
192<\/span><\/div>\n
238<\/span><\/div>\n<\/div>\n
FY23<\/span>FY24<\/span>FY25<\/span><\/div>\n<\/div>\n
\n

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

Flat for three years<\/p>\n

\n
198<\/span><\/div>\n
188<\/span><\/div>\n
188<\/span><\/div>\n<\/div>\n
FY23<\/span>FY24<\/span>FY25<\/span><\/div>\n<\/div>\n<\/div>\n

The numbers<\/p>\n

\n
\n\n\n\n\n\n\n\n\n
<\/th>\nFY23<\/th>\nFY24<\/th>\nFY25<\/th>\nJan-Jun 2026<\/th>\n<\/tr>\n
Sales (\u20b9 Cr)<\/td>\n1,687<\/td>\n1,854<\/td>\n2,014<\/td>\n1,132<\/td>\n<\/tr>\n
EBITDA margin (%)<\/td>\n14.45<\/td>\n15.91<\/td>\n18.41<\/td>\n19.78<\/td>\n<\/tr>\n
Profit after tax (\u20b9 Cr)<\/td>\n146.7<\/td>\n191.6<\/td>\n237.9<\/td>\n148.6<\/td>\n<\/tr>\n
Profit per share (\u20b9)<\/td>\n7.57<\/td>\n10.08<\/td>\n12.65<\/td>\n7.90<\/td>\n<\/tr>\n
Cash from operations (\u20b9 Cr)<\/td>\n198.2<\/td>\n188.4<\/td>\n187.7<\/td>\n129.9<\/td>\n<\/tr>\n
Return on equity (%)<\/td>\n19.2<\/td>\n23.1<\/td>\n25.7<\/td>\n14.7<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n

Year ends 31 December. January to June is six months, so its return on equity is not a yearly figure. EBITDA is operating profit before interest, tax and wear on assets.<\/p>\n

\n
\n
Borrowings<\/div>\n
None<\/div>\n
No debt on the books<\/div>\n<\/div>\n
\n
Net cash, June 2026<\/div>\n
\u20b9139 Cr<\/div>\n
After dividends and a buyback<\/div>\n<\/div>\n
\n
Paid out since Jan 2024<\/div>\n
\u20b9344 Cr<\/div>\n
Dividends and a share buyback<\/div>\n<\/div>\n<\/div>\n
\n

Key takeaway<\/p>\n

Sales rose from \u20b91,687 Cr in FY23 to \u20b92,014 Cr in FY25, and January to June 2026 sales were up 17.9%. Profit after tax rose from \u20b9147 Cr to \u20b9238 Cr as the operating margin climbed from 14.5% to 18.4%, and return on equity was 25.7% in FY25. The company has no borrowings and held \u20b9139 Cr of net cash in June 2026. The weak spot is cash. Operating cash was \u20b9188 Cr in FY25, only 79% of profit against 135% in FY23, because customers now take 94 days to pay, and since January 2024 the company has paid \u20b9344 Cr to the parent through dividends and a buyback.<\/p>\n<\/div>\n<\/section>\n

\n

Sale by the parent \u00b7 Anchors \u00b7 Closest peer<\/p>\n

The parent takes the money, and the price is 46% above the peer<\/h1>\n
\n
\n
Parent sells<\/div>\n
23%<\/div>\n
4.32 crore shares. It keeps 77%<\/div>\n<\/div>\n
\n
Money to company<\/div>\n
\u20b90<\/div>\n
The parent takes all \u20b92,534 Cr<\/div>\n<\/div>\n
\n
Parent\u2019s cost<\/div>\n
\u20b96.77<\/div>\n
Average cost a share. Anchors paid \u20b9586<\/div>\n<\/div>\n<\/div>\n

How the offer is split<\/p>\n

\n

Institutions<\/p>\n

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

Up to 50%<\/span><\/p>\n<\/div>\n

\n

Non-institutional<\/p>\n

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

At least 15%<\/span><\/p>\n<\/div>\n

\n

Retail investors<\/p>\n

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

At least 35%<\/span><\/p>\n<\/div>\n

The anchor book<\/p>\n

73 anchors put in \u20b9759 Cr at \u20b9586. Indian mutual funds took 59.2%, foreign funds 32.2% and life insurers 8.5%. Half of their shares are locked in for 30 days and the rest for 90 days.<\/p>\n

Against the closest listed peer, Elecon Engineering<\/p>\n

\n
\n\n\n\n\n\n
<\/th>\nBonfiglioli at \u20b9586<\/th>\nElecon<\/th>\n<\/tr>\n
Profit per share (\u20b9)<\/td>\n12.65<\/td>\n15.20<\/td>\n<\/tr>\n
P\/E<\/td>\n46.3x<\/td>\n31.6x<\/td>\n<\/tr>\n
Return on net worth (%)<\/td>\n24.0<\/td>\n14.8<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n
\n
\n
P\/E premium<\/div>\n
46%<\/div>\n
Over Elecon<\/div>\n<\/div>\n
\n
P\/E, last 12 months<\/div>\n
40.6x<\/div>\n
Still above Elecon<\/div>\n<\/div>\n
\n
Price to book value<\/div>\n
10.7x<\/div>\n
\u20b9586 against \u20b955.02<\/div>\n<\/div>\n<\/div>\n
\n

Key takeaway<\/p>\n

At \u20b9586 the shares cost 46.3 times FY25 profit against 31.6 times for Elecon. Bonfiglioli is the more profitable of the two, but the price already counts on that.<\/p>\n<\/div>\n<\/section>\n

\n

Anchor price \u20b9586 \u00b7 Strong anchor demand \u00b7 Listing gain view<\/p>\n

A strong business and anchor book, but priced too richly to hold<\/h1>\n
\n
\n
Sales, FY25<\/div>\n
\u20b92,014 Cr<\/div>\n
Up 8.6%<\/div>\n<\/div>\n
\n
Profit after tax, FY25<\/div>\n
\u20b9238 Cr<\/div>\n
Up 24%<\/div>\n<\/div>\n
\n
Listing P\/E<\/div>\n
46.3x<\/div>\n
Peer Elecon: 31.6x<\/div>\n<\/div>\n
\n
Net cash<\/div>\n
\u20b9139 Cr<\/div>\n
June 2026. No borrowings<\/div>\n<\/div>\n<\/div>\n
\n
\n
In its favour<\/div>\n
\n

Strong anchor book<\/p>\n

73 funds put in \u20b9759 Cr at \u20b9586. Indian mutual funds and insurers took 68%.<\/p>\n<\/div>\n

\n

Clear market leader<\/p>\n

Largest in India in wind drives, off-highway drives and industrial gear motors.<\/p>\n<\/div>\n

\n

Profits and margins rising<\/p>\n

Profit after tax from \u20b9147 Cr to \u20b9238 Cr in two years.<\/p>\n<\/div>\n

\n

No debt and a strong return<\/p>\n

\u20b9139 Cr net cash. Return on equity 25.7% in FY25.<\/p>\n<\/div>\n

\n

Growth picking up<\/p>\n

Sales up 17.9% in Jan to Jun 2026.<\/p>\n<\/div>\n<\/div>\n

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

Priced above its peer<\/p>\n

46.3x P\/E against 31.6x for Elecon, a 46% premium. This limits gains after listing.<\/p>\n<\/div>\n

\n

Auditors flagged gaps<\/p>\n

Accounts backup not kept in India and audit-trail logs off for some systems, in FY23 to FY25.<\/p>\n<\/div>\n

\n

Leans on the parent<\/p>\n

6% royalty. Group firms bought 15% of sales.<\/p>\n<\/div>\n

\n

The parent takes the money<\/p>\n

The company gets nothing. \u20b9344 Cr was paid out since 2024.<\/p>\n<\/div>\n

\n

Few customers, flat wind<\/p>\n

Top ten took 36.6% of sales. Wind sales were flat.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

\n

Our opinion<\/p>\n

Apply for listing gains<\/h2>\n

Strong demand from 73 anchor funds and a market leader with rising profit and no debt support a listing gain. At 46% above its peer, the price is too rich to hold for the long term.<\/p>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

Bonfiglioli makes the gearboxes and drives that move conveyors, excavators and wind turbines.<\/p>\n","protected":false},"author":715,"featured_media":23461,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_is2025_no_summary":false,"footnotes":""},"categories":[822],"tags":[],"class_list":["post-23460","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\/23460","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=23460"}],"version-history":[{"count":9,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/posts\/23460\/revisions"}],"predecessor-version":[{"id":23470,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/posts\/23460\/revisions\/23470"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/media\/23461"}],"wp:attachment":[{"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/media?parent=23460"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/categories?post=23460"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/tags?post=23460"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}