HY-Tech Engineers, a four-decade-old hydraulic fittings manufacturer, has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The company, promoted by the Mondkar family, is seeking to raise funds through a combination of a fresh issue and an offer for sale (OFS), with the proceeds earmarked for capacity expansion, debt repayment, and general corporate purposes.
HY-Tech Engineers IPO Structure
According to the DRHP, the IPO will comprise:
- Fresh Issue: Equity shares aggregating up to INR 70 crore.
- Offer for Sale: Up to 1.19 crore shares, primarily offloaded by promoters Hemant Tukaram Mondkar and his spouse Surekha Hemant Mondkar.
The shares will be listed on both BSE and NSE. New Berry Capitals has been appointed as the book-running lead manager, while Bigshare Services will act as registrar.
HY-Tech Engineers: A Legacy in Hydraulics
Founded in 1978, HY-Tech Engineers has built a reputation in the design, manufacture, and supply of hydraulic fittings across multiple industries, including construction, agriculture, automotive, and injection moulding machinery. Its catalogue boasts over 10,000 SKUs, ranging from DIN-metric fittings to O-Ring Face Seal (ORFS) fittings, conversion fittings, and customised solutions.
The company also holds critical certifications such as IRIS (railways) and DRDO approval (defence), opening up avenues in high-growth, strategic sectors.
Financial Performance: Recovery and Growth
HY-Tech’s financials reveal a steady growth trajectory, with a notable rebound in FY25:
| Metrics | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue from Operations | 133.34 | 137.71 | 161.38 |
| EBITDA | 31.33 | 22.55 | 35.79 |
| EBITDA Margin (%) | 23.49 | 16.38 | 22.18 |
| PAT | 18.00 | 11.60 | 19.62 |
| PAT Margin (%) | 13.15 | 8.21 | 11.77 |
| ROE (%) | 28.80 | 15.11 | 21.39 |
| Debt-to-Equity | 0.30 | 0.50 | 0.43 |
Highlights:
- FY25 saw 17% YoY revenue growth, driven largely by domestic demand.
- EBITDA margins rebounded sharply to 22.2% after a dip in FY24.
- PAT surged nearly 69% YoY in FY25 to INR 19.6 crore.
- Balance sheet remains moderately leveraged, with debt-to-equity at 43%.
Customer Base and Exports
HY-Tech operates on a B2B model with dual distribution:
- Direct sales: 152 OEMs/industrial customers served in FY25.
- Distributors: Six active partners in FY25, up from four in FY23.
Repeat business underpins its revenue model, with 95% of FY25 sales coming from returning customers.
On the global front, exports contributed 28.3% of FY25 revenue (₹456.7 million). The USA accounted for nearly 23% of turnover, followed by Belgium and Russia. The company’s promoter group entity, Hy-Tech USA Inc., acts as its exclusive distributor in North America, Canada, and Brazil.
Manufacturing Footprint
The company runs six manufacturing facilities:
- Maharashtra (4): Thane, Shirwal, Kavathe, Nashik (forging).
- Madhya Pradesh (2): Pithampur Units I & II.
Together, they have an installed capacity of 4.55 crore fittings p.a. and 3,120 MT forgings p.a. Utilisation stood at ~67% in FY25, down from 73% in FY24, reflecting recent capacity additions.
IPO proceeds will fund significant expansion:
- Shirwal Unit: +83% capacity (1.44 → 2.64 crore pcs).
- Kavathe Unit: +150% capacity (1.80 → 2.76 crore pcs).
- Pithampur I: +150% capacity (0.48 → 1.20 crore pcs).
This will take total installed fittings capacity well beyond 6.60 crore pcs annually.
Sectoral Diversification and New Frontiers
- Railways & Defence: Certified supplier, positioned to tap large government-led modernisation projects.
- Valves Diversification: Evaluating entry into hydraulic valves, a logical adjacency, to leverage existing distribution and OEM relationships.
The Indian hydraulic fittings market grew at a CAGR of 7.7% (CY19–24) and is projected to accelerate to 10.4% CAGR (CY24–30), driven by automation, infrastructure, and industrial expansion (CARE Report). Globally too, demand is buoyant, with the US, Europe, and the Middle East expected to grow between 8–10% CAGR through 2030.
Promoter Holding
Mondkar family holds nearly 98% of HY-Tech Engineers:
- Hemant Tukaram Mondkar – 64.8%
- Surekha Mondkar (joint holding) – 24.8%
- Ashwin Hemant Mondkar – 8.4%
The OFS will significantly dilute promoter holding, bringing public shareholders into the mix.
Final Words
HY-Tech Engineers IPO blends the story of a niche manufacturing leader with strong domestic traction, export credentials, and ambitious expansion plans. Its FY25 rebound in margins and profits suggests operating leverage is at play, though utilisation levels must improve to justify aggressive capacity additions.
Key positives:
- Strong promoter-led legacy with IIT Bombay pedigree.
- Diversified end-markets and export base.
- Certifications open doors to defence and railways.
Key risks:
- Heavy dependence on the US market (23% of revenue).
- Execution risk in capacity expansion.
- Margins are sensitive to input costs and utilisation.
With a clear roadmap and sizeable opportunity in a growing sector, HY-Tech Engineers IPO will be closely watched by both institutional and retail investors as India’s manufacturing and industrial infrastructure boom gathers pace.
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