Himachal Pradesh-based precision transmission component manufacturer Milestone Gears has filed DRHP with the Securities and Exchange Board of India (SEBI) to raise INR 1,100 crore through an IPO.
Milstone Gears IPO consists of an INR 800 crore fresh issue and an INR 300 crore OFS by the promoters and members of the promoter group. JM Financial, Axis Capital, and Motilal Oswal are acting as lead managers, while KFin Technologies is the registrar of the issue.
Milestone Gears IPO: Company Overview
Founded in 1984 by Ashok Kumar Tandon, Milestone Gears has become one of the leading manufacturers of high-precision transmission and drivetrain components in India. The company supplies tractors, construction equipment, electric vehicles (EVs), locomotives, windmills with over 700 active SKUs and long-standing relationships with marquee OEMs like Mahindra & Mahindra, TAFE, Escorts, CNH Industrial, John Deere, JCB.
From its nine plants across Himachal Pradesh, Punjab and Haryana, Milestone has built a vertically integrated production chain of forging, machining, heat treatment and gear finishing—a rare full spectrum capability among mid sized Indian component manufacturers..
đź’° Use of Funds: Debt Reduction and EV Expansion
According to the DRHP, Milestone Gears IPO proceeds will be primarily utilised for:
| Objective | Allocation (INR Cr) |
|---|---|
| Repayment of borrowings | 356.9 |
| New Greenfield facility at Baddi, HP (EV & locomotive components) | 296.4 |
| General corporate purposes | Balance |
The proposed Greenfield project will enhance Milestone’s capacity for advanced gear assemblies targeted at electric drivetrains and locomotive applications, aligning with global shifts toward sustainable mobility.
đź“Š Financials in Motion: Margins Rebound, Profitability Accelerates
Milestone Gears’ financial trajectory reflects operational discipline amid cyclic market dynamics.
| Metric | FY23 | FY24 | FY25 | Q1 FY26 |
|---|---|---|---|---|
| Revenue from Operations | 612.9 | 533.3 | 530.2 | 168.0 |
| EBITDA | 76.8 | 70.6 | 96.3 | 31.8 |
| PAT | 14.1 | 6.7 | 22.1 | 9.4 |
| EBITDA Margin | 12.5 | 13.2 | 18.2 | 18.9 |
| PAT Margin | 2.3 | 1.3 | 4.2 | 5.6 |
After a muted FY24, profitability surged sharply in FY25, driven by better capacity utilisation, improved product mix, and cost rationalisation. EBITDA margins touched 18%, signaling a transition from a volume-driven to a margin-driven growth model.
Post-IPO, debt repayment is expected to materially reduce leverage (net debt/equity of 3.23x in FY25), freeing up balance sheet capacity for future expansion.
⚙️ Engineering Advantage: High Utilization and Technology Depth
Milestone Gears’ operations are characterised by efficient asset deployment and high plant utilisation—with over 85% average capacity use across major product categories such as bull gears, axles, and transmission shafts.
Its manufacturing sophistication—including German scudding and Reishauer grinding systems—enables DIN Class-4 precision, a quality level demanded by global tractor and EV OEMs.
“The company’s technological edge and strong OEM linkages make it a Tier-1 candidate for new-generation driveline components, particularly as 4WD and EV segments expand,” said a Mumbai-based analyst with a domestic brokerage.
đź‘Ą People Power
As of June 2025, Milestone employed 1,417 permanent and 2,038 contractual workers. Of the permanent staff, over 1,000 are engineers or machinists, reflecting the company’s technical depth. Importantly, no unionisation or major work stoppages have been reported, underscoring efficient HR management.
🌍 Global and Domestic Market Tailwinds
Global Off-Highway Vehicle (OHV) Market
The global OHV industry—agricultural and construction machinery—grew from USD 211.6 billion (~INR 18.7 lakh crore) in 2019 to USD 293.1 billion (~INR 25.9 lakh crore) in 2024 and is expected to reach USD 409.9 billion (~INR 36.2 lakh crore) by 2029 at a 6.9% CAGR.
- Tractors account for ~68% of OHV volume (26 lakh units in 2024).
- Construction machinery adds another 12 lakh units.
- Growth is driven by mechanisation, infrastructure spending and electrification.
India: The Tractor Capital of the World
India is the world’s largest tractor market, accounting for ~40% of global volumes.
- Sales grew from 8.72 lakh units in FY19 to 10.4 lakh units in FY25 and is expected to reach 15.4 lakh units by FY30 (CAGR 8.2%).
- Within this, 4WD tractors are gaining traction—expected to grow from 23% share in FY25 to 42% by FY30—a segment where Milestone is developing driveline systems.
The domestic off-highway market is also growing rapidly—from INR 1.2 lakh crore in FY19 to INR 2.17 lakh crore in FY25 and is expected to reach INR 3.83 lakh crore by FY30 (CAGR 12%) driven by the PM Gati Shakti and National Infrastructure Pipeline programmes.
🔩 Industry Linkages: Trusted by Global Leaders
Milestone Gears supplies to all seven tractor OEMs in India—Mahindra, Swaraj, Sonalika, TAFE, Escorts, Kubota, John Deere and CNH Industrial—covering almost 88% of the domestic market. It is also an approved vendor to global leaders like Deere, CNH, AGCO and Kubota, which together command over 50% of the global agri-equipment market by value.
🌱 Macro Themes: Electrification, Localisation, and the China+1 Shift
Industry analysts note that the IPO comes at a time when OEMs worldwide are diversifying supply chains under the “China+1” strategy, creating tailwinds for Indian precision component manufacturers.
“Milestone’s focus on high-tolerance gear assemblies, localisation, and upcoming EV product lines places it strategically to benefit from this shift,” said a sector expert.
Government schemes such as Make in India, PLI for Auto Components, and FAME-II are further enabling suppliers like Milestone to integrate into global electric drivetrain ecosystems.
🧠The Road Ahead
With a strong foothold in tractors and construction equipment—and emerging exposure to EVs and locomotives—Milestone Gears embodies the new wave of “industrial India” stories bridging legacy manufacturing with advanced mobility.
If executed well, its post-IPO journey could mirror the transformation seen in companies like Craftsman Automation—leveraging India’s manufacturing resurgence, localisation trends, and the growing global demand for clean, intelligent machinery.
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