{"id":23472,"date":"2026-10-15T17:18:57","date_gmt":"2026-10-15T11:48:57","guid":{"rendered":"https:\/\/www.moneyworks4me.com\/investmentshastra\/?p=23472"},"modified":"2026-10-15T17:31:55","modified_gmt":"2026-10-15T12:01:55","slug":"tonbo-imaging-india-ipo-review-our-opinion","status":"publish","type":"post","link":"https:\/\/www.moneyworks4me.com\/investmentshastra\/tonbo-imaging-india-ipo-review-our-opinion\/","title":{"rendered":"Tonbo Imaging India IPO review: Our Opinion"},"content":{"rendered":"
\n

Initial public offer \u00b7 Defence electronics<\/p>\n

Tonbo Imaging India IPO review: Our Opinion<\/h1>\n

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.<\/p>\n

How Tonbo makes money<\/p>\n

\n

Tactical systems: 58% of sales<\/p>\n

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.<\/p>\n<\/div>\n

\n

Platform systems: 40% of sales<\/p>\n

Cameras and sights fitted to vehicles and drones, plus missile seekers, the sensors in a missile\u2019s nose.<\/p>\n<\/div>\n

\n

Who buys it<\/p>\n

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 \u20b9314 Cr in June 2026.<\/p>\n<\/div>\n

\n

How an order turns into money<\/p>\n

Tonbo wins a tender, and 130 of its engineers design the product. Tonbo owns all the designs and spent \u20b926 Cr on research in FY26. Partners such as Kaynes Technology build the units. Payment is slow, with customers taking 212 days.<\/p>\n<\/div>\n

\n

Why customers pick Tonbo<\/p>\n

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.<\/p>\n<\/div>\n

\n
\n
Issue size at \u20b9700<\/div>\n
\u20b9852 Cr<\/div>\n
All 1.22 crore shares are sold by 13 existing holders. The company gets nothing<\/div>\n<\/div>\n
\n
Price used<\/div>\n
\u20b9700<\/div>\n
Anchor price paid on 14 October<\/div>\n<\/div>\n<\/div>\n
\n
\n
Market cap at \u20b9700<\/div>\n
\u20b94,010 Cr<\/div>\n
5.73 crore shares<\/div>\n<\/div>\n
\n
Sales, FY26<\/div>\n
\u20b9363 Cr<\/div>\n
Down 22.7%<\/div>\n<\/div>\n
\n
Listing P\/E<\/div>\n
78.8x<\/div>\n
FY26 PAT \u20b950.9 Cr, \u20b98.88 a share<\/div>\n<\/div>\n
\n
Anchor book<\/div>\n
\u20b9255 Cr<\/div>\n
43 funds bought at \u20b9700<\/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 Orders<\/p>\n

A leader in thermal sights, but with very few customers<\/h1>\n
\n
\n
Confirmed orders<\/div>\n
\u20b9314 Cr<\/div>\n
June 2026. Another \u20b9118 Cr came in July to September<\/div>\n<\/div>\n
\n
Top ten customers<\/div>\n
77.8%<\/div>\n
Share of FY26 sales. It was 95.5% in FY25<\/div>\n<\/div>\n
\n
Customers pay in<\/div>\n
212 days<\/div>\n
FY26. It was 118 days in FY25<\/div>\n<\/div>\n
\n
Overseas sales<\/div>\n
5.6%<\/div>\n
Of FY26 sales. It was 65.5% in FY25<\/div>\n<\/div>\n<\/div>\n

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

\n

Tactical systems<\/p>\n

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

58.4%<\/span><\/p>\n<\/div>\n

\n

Platform systems<\/p>\n

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

39.9%<\/span><\/p>\n<\/div>\n

\n

Other<\/p>\n

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

1.7%<\/span><\/p>\n<\/div>\n

Who bought, share of FY26 sales<\/p>\n

\n

Indian government<\/p>\n

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

71.2%<\/span><\/p>\n<\/div>\n

\n

System integrators<\/p>\n

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

24.1%<\/span><\/p>\n<\/div>\n

\n

Foreign governments<\/p>\n

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

3.3%<\/span><\/p>\n<\/div>\n

\n

Other operating income<\/p>\n

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

1.4%<\/span><\/p>\n<\/div>\n

Tender record<\/p>\n

\n
\n
Tenders won, FY26<\/div>\n
34%<\/div>\n
45 of 131 bids. It was 36% in FY25<\/div>\n<\/div>\n
\n
Research spend, FY26<\/div>\n
\u20b926 Cr<\/div>\n
8.6% of all expenses, up from \u20b99 Cr<\/div>\n<\/div>\n
\n
Systems deployed<\/div>\n
28,000+<\/div>\n
In 24 countries<\/div>\n<\/div>\n<\/div>\n
\n

Key takeaway<\/p>\n

Tonbo supplied about 51% of the thermal sights the Indian government bought and 94% of India\u2019s thermal exports by units, in a report paid for by the company. India\u2019s 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.<\/p>\n<\/div>\n<\/section>\n

\n

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

Margins are high, but sales, profit and cash flow weakened<\/h1>\n
\n
\n

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

Down 22.7% in FY26<\/p>\n

\n
428<\/span><\/div>\n
469<\/span><\/div>\n
363<\/span><\/div>\n<\/div>\n
FY24<\/span>FY25<\/span>FY26<\/span><\/div>\n<\/div>\n
\n

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

Down 30% in FY26<\/p>\n

\n
69<\/span><\/div>\n
73<\/span><\/div>\n
51<\/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 FY25 and FY26<\/p>\n

\n
78<\/span><\/div>\n
-136<\/span><\/div>\n
-63<\/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\n
<\/th>\nFY24<\/th>\nFY25<\/th>\nFY26<\/th>\nApr-Jun 2026<\/th>\n<\/tr>\n
Sales (\u20b9 Cr)<\/td>\n428.2<\/td>\n469.1<\/td>\n362.6<\/td>\n36.0<\/td>\n<\/tr>\n
EBITDA margin (%)<\/td>\n26.23<\/td>\n29.65<\/td>\n28.85<\/td>\n-36.21<\/td>\n<\/tr>\n
Profit after tax (\u20b9 Cr)<\/td>\n68.5<\/td>\n72.8<\/td>\n50.9<\/td>\n-17.7<\/td>\n<\/tr>\n
Profit per share (\u20b9)<\/td>\n13.63<\/td>\n12.70<\/td>\n8.88<\/td>\n-3.20<\/td>\n<\/tr>\n
Cash from operations (\u20b9 Cr)<\/td>\n78.3<\/td>\n-136.1<\/td>\n-63.2<\/td>\n-14.7<\/td>\n<\/tr>\n
Return on equity (%)<\/td>\n52.7<\/td>\n20.2<\/td>\n9.8<\/td>\n-3.2<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n

Year ends 31 March. April to June is three months, and most of the company\u2019s revenue comes in the second half. EBITDA is operating profit before interest, tax and wear on assets.<\/p>\n

\n
\n
Stock<\/div>\n
\u20b9320 Cr<\/div>\n
June 2026. It was \u20b9111 Cr in March 2025<\/div>\n<\/div>\n
\n
Borrowings<\/div>\n
\u20b9130 Cr<\/div>\n
June 2026. It was \u20b978 Cr in March 2025<\/div>\n<\/div>\n
\n
Net position<\/div>\n
Net debt \u20b935 Cr<\/div>\n
It was net cash of \u20b9102 Cr<\/div>\n<\/div>\n<\/div>\n
\n

Key takeaway<\/p>\n

Tonbo earns high margins for a hardware business, with an EBITDA margin of 28.9% in FY26. But sales fell 22.7% to \u20b9363 Cr, profit fell 30% to \u20b951 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 \u20b918 Cr. Cash is the bigger worry. Operations used \u20b9136 Cr in FY25 and \u20b963 Cr in FY26 as cash got stuck in stock and unpaid sales, and the company moved from net cash to net debt. The \u20b9314 Cr order book has to turn into sales and cash in the second half.<\/p>\n<\/div>\n<\/section>\n

\n

Sale by existing holders \u00b7 Anchors \u00b7 Closest peer<\/p>\n

Early investors sell, and the P\/E is 33% below the peer<\/h1>\n
\n
\n
Holders selling<\/div>\n
13<\/div>\n
21.25% of the company, 1.22 crore shares<\/div>\n<\/div>\n
\n
Money to company<\/div>\n
\u20b90<\/div>\n
All of the \u20b9852 Cr goes to the sellers<\/div>\n<\/div>\n
\n
Promoters\u2019 stake after<\/div>\n
14.0%<\/div>\n
Down from 17.4%<\/div>\n<\/div>\n<\/div>\n

Who sells<\/p>\n

\n

Two CEAQ companies<\/p>\n

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

75.2% of the offer<\/span><\/p>\n<\/div>\n

\n

Three promoters<\/p>\n

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

16.1%<\/span><\/p>\n<\/div>\n

\n

Eight other holders and a promoter group firm<\/p>\n

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

8.7%<\/span><\/p>\n<\/div>\n

The anchor book<\/p>\n

43 anchors put in \u20b9255 Cr at \u20b9700. 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.<\/p>\n

Against the closest listed peer, Paras Defence<\/p>\n

\n
\n\n\n\n\n\n
<\/th>\nTonbo at \u20b9700<\/th>\nParas<\/th>\n<\/tr>\n
Sales growth, FY26 (%)<\/td>\n-22.7<\/td>\n30.7<\/td>\n<\/tr>\n
Profit per share (\u20b9)<\/td>\n8.88<\/td>\n10.93<\/td>\n<\/tr>\n
P\/E<\/td>\n78.8x<\/td>\n117.7x<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n
\n
\n
P\/E discount<\/div>\n
33%<\/div>\n
Below Paras<\/div>\n<\/div>\n
\n
Price to book value<\/div>\n
7.4x<\/div>\n
\u20b9700 against \u20b994.01<\/div>\n<\/div>\n
\n
Value to sales<\/div>\n
11.1x<\/div>\n
Against FY26 sales of \u20b9363 Cr<\/div>\n<\/div>\n<\/div>\n
\n

Key takeaway<\/p>\n

At \u20b9700 the shares cost 78.8 times FY26 profit against 117.7 times for Paras. Paras is growing, with sales up 31%, while Tonbo\u2019s sales fell 23%, so a lower P\/E is not surprising.<\/p>\n<\/div>\n<\/section>\n

\n

Anchor price \u20b9700 \u00b7 Strong anchor demand \u00b7 33% below closest peer<\/p>\n

A strong thermal sight maker, but a weak year<\/h1>\n
\n
\n
Sales, FY26<\/div>\n
\u20b9363 Cr<\/div>\n
Down 22.7%<\/div>\n<\/div>\n
\n
Profit after tax, FY26<\/div>\n
\u20b950.9 Cr<\/div>\n
Down 30%<\/div>\n<\/div>\n
\n
Listing P\/E<\/div>\n
78.8x<\/div>\n
Peer Paras: 117.7x<\/div>\n<\/div>\n
\n
Order book<\/div>\n
\u20b9314 Cr<\/div>\n
June 2026<\/div>\n<\/div>\n<\/div>\n
\n
\n
In its favour<\/div>\n
\n

Strong anchor book<\/p>\n

43 funds put in \u20b9255 Cr at \u20b9700. Indian mutual funds and insurers took 66%.<\/p>\n<\/div>\n

\n

Leader in thermal sights<\/p>\n

About 51% of thermal sights bought by the Indian government.<\/p>\n<\/div>\n

\n

High margins<\/p>\n

EBITDA margin of 28.9% in FY26 and 29.6% in FY25.<\/p>\n<\/div>\n

\n

Orders in hand<\/p>\n

\u20b9314 Cr of confirmed orders, against FY26 sales of \u20b9363 Cr.<\/p>\n<\/div>\n

\n

Priced below its peer<\/p>\n

78.8x P\/E against 117.7x for Paras, 33% below.<\/p>\n<\/div>\n<\/div>\n

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

Sales and profit fell<\/p>\n

Sales down 22.7% and profit down 30% in FY26. The April to June 2026 quarter was a loss.<\/p>\n<\/div>\n

\n

Cash flow is negative<\/p>\n

Operations used \u20b9136 Cr in FY25 and \u20b963 Cr in FY26. Customers take 212 days to pay.<\/p>\n<\/div>\n

\n

Few big customers<\/p>\n

Top ten took 77.8% of FY26 sales.<\/p>\n<\/div>\n

\n

Complaints and court cases<\/p>\n

Allegations and a lawsuit against the company. None has a ruling.<\/p>\n<\/div>\n

\n

The sellers are early investors<\/p>\n

The company gets nothing. Two CEAQ companies sell 75%.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

\n

Our opinion<\/p>\n

Apply for listing gains<\/h2>\n

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.<\/p>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

Tonbo designs thermal cameras, weapon sights and missile seekers for armies and security forces.<\/p>\n","protected":false},"author":715,"featured_media":23473,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_is2025_no_summary":false,"footnotes":""},"categories":[822],"tags":[],"class_list":["post-23472","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\/23472","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=23472"}],"version-history":[{"count":1,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/posts\/23472\/revisions"}],"predecessor-version":[{"id":23474,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/posts\/23472\/revisions\/23474"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/media\/23473"}],"wp:attachment":[{"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/media?parent=23472"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/categories?post=23472"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.moneyworks4me.com\/investmentshastra\/wp-json\/wp\/v2\/tags?post=23472"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}