Airfloa Rail Technology is coming out with its IPO on SME platform between 11 – 15 September 2025. The company is a Chennai-based manufacturer of high-precision, forged, and machined components, serving the Indian Railways, aerospace, and defense industries. With more than 20 years of experience and an order book of INR 375.89 crore (as of August 2025), Airfloa positions itself as a long-term growth story backed by stable contracts, repeat customers, and a diversified portfolio. We take a deeper look at the operations in the Airfloa Rail Technology IPO review.
Airfloa Rail Technology IPO Review: Company Overview
Airfloa Rail Technology is a Chennai-based precision engineering company engaged in the manufacturing of critical components for railway rolling stock, aerospace, and defence applications. With over two decades of experience, the company has positioned itself as a reliable partner to Indian Railways, global OEMs, and defence contractors.
In the railway segment, Airfloa supplies seating systems, doors, windows, luggage racks, climate control units, and structural parts that form the backbone of modern coaches. The company has contributed to prestigious projects including the Train-18 Vande Bharat Express, RRTS corridors, Agra-Kanpur Metro, Kolkata Metro, Vistadome coaches, and Sri Lankan DEMU trains. Beyond railways, the company has expanded into the aerospace and defence sector, where it produces intricate machined components and high-fidelity simulators used in pilot training centres. This diversification acts as a growth engine and reduces dependency on a single market.
Airfloa operates through two advanced manufacturing facilities in Chennai, equipped with modern forging, machining, and assembly infrastructure. These plants allow it to deliver both standalone components and turnkey furnishing projects, giving the company a competitive edge in highly regulated industries with high entry barriers.
Airfloa Rail Technology Business Model & Operations
Airfloa Rail Technology operates a multi-vertical business model that spans across railway rolling stock, turnkey interior solutions, and aerospace & defence precision components. The company is not limited to supplying parts but has evolved into an integrated solutions provider.
A. Railways – Core Business
- Manufactures critical components for passenger coaches and metro systems such as seats, windows, doors, luggage racks, air-conditioning units, roof & sidewall structures, and nose cones.
- Specialises in interior furnishing projects, where it delivers end-to-end fit-outs including seating, lighting, restrooms, and climate control.
- Key contributions include flagship projects like Vande Bharat Express, RRTS Metro, Kolkata Metro, Vistadome coaches, and Sri Lankan DEMU coaches.
- Acts as both a component vendor and a turnkey solutions partner.
B. Aerospace & Defence – Growth Vertical
- Produces high-precision machined components for aerospace applications.
- Supplies aviation training simulators that replicate real cockpits for pilot training.
- This vertical gives the company exposure to a high-value industry and reduces dependency on railway contracts.
C. Turnkey Solutions Capability
- Unlike niche suppliers, Airfloa Rail Technology has the capability to handle entire project lifecycles:
- Design & Engineering
- Manufacturing & Assembly
- Installation & Commissioning
- This makes it a preferred partner for large-scale projects, since clients can rely on one supplier for multiple phases of work.
D. Operational Execution
- Business operations are highly structured, starting from work orders → bill of materials → production planning → manufacturing → quality assurance → delivery & invoicing.
- Its Chennai-based facilities are equipped with advanced forging, machining, and assembly infrastructure, allowing production of both small precision parts and large coach assemblies.
- With capacity utilization at 85% (FY25), the company has demonstrated operational efficiency while maintaining stringent industry quality standards.
E. Market Positioning
- Airfloa Rail Technology operates in industries with stringent qualification norms (ICF, metro rail, global OEMs, PSUs), creating natural entry barriers.
- By being both a component manufacturer and a turnkey project executor, it positions itself not just as a vendor, but a strategic partner in the supply chain.
- Long-term contracts and repeat orders highlight its credibility and reliability in highly regulated sectors.
Airfloa’s business model is multi-pronged — railways remain the anchor, but aerospace & defence provide diversification and growth. Its turnkey solutions capability sets it apart from smaller peers and allows it to capture more value per project. In industries where trust, quality, and certification are critical, Airfloa has carved out a sustainable niche with high entry barriers.
Airfloa Rail Technology IPO Review: Revenue Streams Analysis
Airfloa Rail Technology has a diversified revenue model, with contributions across segments, products, geographies, and customer types.
Segment-wise Revenue
| Segment | FY 2023 | FY 2024 | FY 2025 | Trend |
|---|---|---|---|---|
| Railway Rolling Stocks | 94.76 (99.6%) | 113.22 (94.9%) | 124.17 (64.5%) | Railway share declining as aerospace grows |
| Aerospace, Defence & Others | 0.41 (0.4%) | 6.08(5.1%) | 68.22 (35.5%) | Rapid diversification |
- Railways remain the backbone (~65%), but Aerospace & Defence surged to 35% in FY25, reducing dependency.
- This shift indicates Airfloa is scaling beyond railways and building a multi-industry footprint.
Product-wise Revenue (FY 2025)
| Product | Revenue (INR Crore) | % of Revenue |
|---|---|---|
| Train Materials | 88.13 | 45.8 |
| Train-18 Seats | 55.23 | 28.7 |
| Roof & Sidewall | 15.92 | 8.3 |
| Automatic Sliding Door | 9.22 | 4.8 |
| Luggage Rack | 9.06 | 4.7 |
| Others (Air Filters, Nose Cone, Windows, Defence items, etc.) | 14.82 | 7.7 |
| Total | 192.39 | 100 |
- Top two products (Train Materials + Seats) contribute ~74% of revenue.
- Rising share of defence and aerospace components seen in “Others”.
- Strong order visibility in coach interiors (seats, racks, panels).
Location-wise Revenue (FY 2025)
| State | Revenue (INR Crore) | % Share |
|---|---|---|
| Tamil Nadu | 179.75 | 93.4 |
| Gujarat | 6.37 | 3.3 |
| Others (Maharashtra, Karnataka, Punjab, etc.) | 6.27 | 3.3 |
| Total | 192.39 | 100 |
- Tamil Nadu dominates due to proximity of factories + ICF contracts.
- Expansion into export and interstate projects (Sri Lanka, Mozambique, metros) likely to diversify geography over time.
Sector-wise Revenue
| Sector | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Government | 99.6% | 94.9% | 64.5% |
| Non-Government | 0.4% | 5.1% | 35.5% |
- Historically government-driven, but private/OEM share rising rapidly.
- This mix reduces risk of overdependence on Indian Railways.
Customer Concentration & Repeat Business
- Top 5 customers = 82.5% of revenue (FY25).
- Repeat customers: 62% in FY25 vs 38% in FY24 → improving stickiness.
Airfloa’s revenue base is still concentrated, but diversification into aerospace, private OEMs, and exports is a clear growth lever.
Airfloa Rail Technology IPO Analysis: Financial Performance
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Revenue from Operations | 95.17 | 119.30 | 192.39 |
| Growth (%) | (30.8) | 25.4 | 61.3 |
| Total Income | 95.33 | 122.87 | 192.66 |
| EBITDA | 14.68 | 34.58 | 47.41 |
| EBITDA Margin (%) | 15.4 | 28.1 | 24.6 |
| Net Profit (PAT) | 1.49 | 14.23 | 25.55 |
| PAT Margin (%) | 1.6 | 11.9 | 13.3 |
| RoE (%) | 3.6 | 29.1 | 30.6 |
| RoCE (%) | 11.3 | 26.4 | 26.3 |
| Debt-Equity | 1.44 | 1.14 | 0.54 |
Key Takeaway:
- Revenue growth strong at 61% in FY25 → driven by new contracts in aerospace & defence.
- Profitability: EBITDA margin slightly fell (28% → 25%), but PAT margin improved → reflecting better cost control & higher value-add products.
- Returns: RoE and RoCE both above 25% = highly efficient.
- Debt reduction: D/E dropped to 0.54, signaling healthier balance sheet.
The company has successfully moved from low-margin component supplier (FY23) to a high-return turnkey provider (FY25).
Airfloa Rail Technology IPO Analysis: Capacity & Utilization
| Particulars | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Installed Capacity (Nos.) | 11,863 | 8,761 | 6,220 |
| Actual Production (Nos.) | 9,151 | 6,955 | 5,317 |
| Utilization (%) | 77 | 79 | 85 |
- Despite reduced installed base, utilization improved to 85% in FY25 → leaner, more efficient operations.
- Shows management discipline in capacity rationalization and focus on quality over quantity.
- IPO funds (INR 13.67 crore earmarked for machinery) will likely lift production capability and maintain utilization at high levels.
Airfloa Rail Technology IPO Review: Competitive Strengths
Airfloa Rail Technology enjoys multiple advantages that differentiate it from smaller SME players and even some listed mid-cap peers:
- Turnkey Solutions Provider – Not just a parts supplier but an end-to-end partner handling design, engineering, manufacturing, assembly, and installation. This boosts margins and strengthens client stickiness.
- Multi-Sector Presence – Serving both railways (~65%) and aerospace/defence (~35%), creating resilience and reducing dependence on a single segment.
- Strong Leadership & Expertise – Promoters with 20+ years in the industry, plus Sudhanshu Mani (architect of Vande Bharat Express) as Technology Advisor, giving credibility and vision.
- Large Order Book – INR 375.9 Cr backlog (Aug 2025), 2x FY25 revenue, provides strong visibility.
- Operational Excellence – 85% capacity utilization, advanced facilities in Chennai, leaner cost structure, and consistent profitability.
Airfloa Rail Technology Strategies & Growth Outlook
Airfloa’s growth plan aligns with industry tailwinds (rail capex, metro expansion, Make in India defence push):
- Customer Base Expansion – Deepening wallet share with Indian Railways and global OEMs like Alstom, Siemens.
- Capacity Enhancement – INR 13.7 Cr IPO proceeds to be used for machinery → higher precision, scale, faster turnaround.
- Financial Strengthening – INR 6 Cr repayment of debt + working capital infusion (INR 59.3 Cr) → stronger balance sheet and liquidity.
- Transition to Full-Fledged Solutions Provider – Focus on aluminium & FRP interiors → aligned with next-gen rolling stock requirements.
- Technology & Innovation – Advisor-driven R&D, automation, lean manufacturing to maintain high RoE/ROCE profile.
Airfloa Rail Technology is clearly positioning itself as a “mini-Titagarh of the SME space”, with ambitions to scale into a full-service rolling stock company.
Peer Comparison – Airfloa vs Industry Leaders
| Company | Revenue (INR Cr) | EPS | P/E (x) | RoNW (%) | EBITDA (%) | PAT (%) |
|---|---|---|---|---|---|---|
| Jupiter Wagons | 4,008 | 9.08 | 37.8 | 13.8 | ~12–14 | ~6–7 |
| Titagarh Rail Systems | 3,943 | 20.39 | 41.9 | 11.1 | ~12–15 | ~7–8 |
| Airfloa Rail Tech (IPO) | 193 | 15.63 | 8.5–9.0 | 23.1 | 24.6 | 13.3 |
Key Insights:
- Scale: Airfloa Rail Technology is much smaller in revenue (~INR 193 Cr vs ~ INR 4,000 Cr peers), but growing at a faster clip (61% YoY).
- Profitability: Airfloa’s EBITDA (24.6%) and PAT margins (13.3%) are significantly higher than peers (generally 12–15% EBITDA, 6–8% PAT).
- Returns: RoNW of 23% is almost double peers, reflecting efficient use of capital.
- Valuation: At IPO price band, Airfloa trades at 8.5–9x earnings, a steep discount vs peers trading at 38–42x.
Airfloa may be small-cap in size but mid-cap in quality metrics. Its combination of high margins + low valuation makes it an attractive opportunity. As it scales, valuations could rerate closer to peers.
Airfloa Rail Technology IPO Details & Objectives
| IPO Dates | 11 – 15 September 2025 |
| IPO Price | INR 133 – 140 per share |
| Fresh Issue | 65,07,000 shares (INR 86.54 – 91.10 crore) |
| Offer For Sale | Nil |
| Total IPO Size | 65,07,000 shares (INR 86.54 – 91.10 crore) |
| Minimum Bid | 2,000 shares (INR 2,80,000) |
| Lot Size | 1,000 shares (INR 1,40,000) |
| Face Value | INR 10 per share |
| Individual Allocation | 35% |
| Listing On | BSE SME |
Objects of the Issue:
- Funding working capital requirements – INR 59.27 Cr
- Capital expenditure towards purchase of machinery and equipment – INR 13.68 Cr
- Repayment of a portion of certain outstanding borrowing availed by the company – INR 6.0 Cr
- General Corporate
Conclusion
Airfloa Rail Technology IPO offers investors a rare mix of strong fundamentals and attractive valuations. With a robust order book, superior margins compared to peers, and growing diversification into aerospace and defence, the company is positioned for sustained growth. At just 8.5–9x earnings, the issue looks reasonably priced, leaving ample room for re-rating. Despite sectoral risks like working capital needs and raw material costs, the positives far outweigh the concerns. Overall, this IPO stands out as a promising opportunity in the SME segment with potential for both healthy listing gains and long-term value.
For more details related to IPO GMP, SEBI IPO Approval, and Live Subscription, stay tuned to IPO Central.
Installed capacity has come down from 11,863 nos in 2023 to 6220 nos in 2026 .
Production has come down 9157 nos to5317 nos during corresponding period.
Any remark from management?