Airfloa Rail Technology IPO

Airfloa Rail Technology claims to have versatile manufacturing capabilities, producing high-quality components for clients in the railway, aerospace, and defense sectors. The company's extensive expertise enables it to meet the complex demands of these industries, solidifying its position as a reliable supplier across multiple sectors.

Airfloa Rail Technology claims to have evolved into a turnkey solutions provider, managing the entire lifecycle of projects. From design and engineering to manufacturing, assembly, and commissioning, the company offers seamless end-to-end services. Its successful execution of complex projects, such as for Indian Railways and metro systems, demonstrates its expertise in delivering integrated solutions.

The company claims to have advanced manufacturing infrastructure, with two strategically located facilities across Chennai and Kancheepuram. Equipped with modern machinery, these units ensure high-efficiency production and precision engineering, enabling the company to meet stringent quality standards in the railway and aerospace sectors. This robust infrastructure supports Airfloa’s capacity to adapt to market demands efficiently.

Airfloa Rail Technology claims to have a strong work order book, valued at Rs 375.89 crore as of August 28, 2025.

The company holds IRIS certification (ISO/TS 22163:2017) for rail industry quality management systems, ISO 9001:2015 certification for design and manufacturing of railway and general applications, and AS9100D & BS EN ISO 9001:2015 for aerospace and defense manufacturing. The company is also an approved supplier for Indian Railways, Hindustan Aeronautics Limited (HAL), and the Defense Avionics Research Establishment (DARE), among others.

The company has reported a consistent increase in revenue from operations and profit after tax (PAT). Revenue from operations increased from Rs 95.17 crore (standalone) in FY23 to Rs 119.30 crore (standalone) in FY24 and Rs 192.39 crore (consolidated) in FY25. PAT increased from Rs 1.49 crore (standalone) in FY23 to Rs 14.23 crore (standalone) in FY24 and Rs 25.55 crore (consolidated) in FY25.

Airfloa Rail Technology's order book relies significantly on contracts from entities under Indian Railways, which are awarded through a competitive bidding process. They accounted for Rs 107.16 crore (55.70 percent) of the company’s total revenue in FY25, Rs 77.08 crore (64.61 percent) in FY24, and Rs 75.06 crore (78.87 percent) in FY23. Any adverse changes in the tendering process or failure to secure future contracts from Indian Railways could negatively impact the company's business growth, financial condition, and results of operations. The competitive nature of the bidding process, with potential entrants offering lower margins, further increases the uncertainty surrounding contract acquisition.

As of FY25, the company had trade receivables of Rs 127.60 crore, an increase from Rs 101.71 crore in FY24 and Rs 48.77 crore in FY23. Any failure to collect these receivables on time or at all could adversely affect the business and its financial condition.

The company recorded negative cash flow from operating activities amounting to Rs 4.45 crore (consolidated) in FY25. If cash outflows continue to exceed inflows in the future, the company may face liquidity challenges.

The top 10 customers accounted for Rs 178.01 crore (92.52 percent) of the company’s revenue in FY25, Rs 109.68 crore (91.93 percent) in FY24, and Rs 90.47 crore (95.07 percent) in FY23. Any failure to retain these key customers or a loss of business from them could adversely affect the company’s business and financial standing.

The company, its directors, and promoters are involved in certain ongoing tax proceedings. Any adverse judgments in any of these cases could be detrimental to the company’s business prospects.

The top 10 suppliers accounted for Rs 83.41 crore (64.37 percent) of the company’s total purchases in FY25, Rs 39.02 crore (64.86 percent) in FY24, and Rs 28.40 crore (50.90 percent) in FY23. Any disruption in supplies from one or more of these suppliers could adversely affect the company’s business and finances.

The company has recorded a high average employee attrition rate in recent years. It stood at 39.92 percent in FY25, 81.31 percent in FY24, and 54.12 percent in FY23. Sustained attrition at this scale could adversely affect operational efficiency and the company’s ability to execute its business strategy effectively.

Airfloa Rail Technology is completely reliant on third-party logistics service providers for the transport of input materials and finished products. Any disruption in their services or inability to secure alternative providers could significantly impact the company’s operations. Additionally, the company does not have contractual arrangements with these third-party providers, which exposes it to potential liability for negligence or accidents, which may result in financial losses or legal consequences.

As of FY25, the company had financial indebtedness of Rs 59.98 crore. Any failure to service or repay these loans can hurt the company’s operations and financial position.