Defence Manufacturing · Strategic Investment
ACQUISITION OPPORTUNITY
DEFENCE MANUFACTURING ENTERPRISE
PROPRIETARY INVESTMENT MEMORANDUM | DEFENCE SECTOR, INDIA
M&A ADVISORY SERVICES PROVIDED BY:
CA Dhiraj Ostwal & Co.
YOUR VISION, OUR EXPERTISE— SEAMLESS M&A SOLUTIONS.
PRIVATE & CONFIDENTIAL
NOT AN OFFER FOR SALE
Company Overview & Defence Credentials
A specialised defence manufacturing company with proven design, development and delivery capabilities for critical equipment. Strong relationships with premier Defence PSUs and a robust order pipeline.
Key Highlights
Strategic Differentiation
- Indigenous designs for electro‑mechanical & aerospace ground support equipment
- Proven track record with DRDO labs and DPSUs
- 100% transferable IP (product patents)
Reason for stake sale: Promoter seeking strategic partner for scaling; committed 5‑year handholding to ensure seamless transition.
Deal Structure & Valuation
Asking Price (100% enterprise)
₹22 Crore
Flexible structure – business only or including immovable assets
Valuation Break-up
- Business (technology, patents, order book, relationships): ₹18 Cr
- Immovable Assets (plant & land): ₹4 Cr
- 80% Stake (proportional): ₹17.6 Cr (no premium)
Structuring Options
- Option 1 – Complete acquisition: ₹22 Cr (business + assets)
- Option 2 – Business only: ₹18 Cr (assets demerged, avoids stamp duty)
- Promoter support: 5‑year handholding, non‑compete & knowledge transfer
Financial Performance Analysis
| Particulars | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 5.94 | 4.98 | 7.90 |
| Growth % | -26.95% | -16.27% | +58.76% |
| EBITDA | 0.62 | 0.96 | 1.16 |
| EBITDA margin % | 10.45% | 19.35% | 14.68% |
| PAT | 0.12 | 0.57 | 0.44 |
| PAT margin % | 2.00% | 11.47% | 5.55% |
Clarifications & Due Diligence Responses
1. Detailed Bifurcation of ₹4 Cr Assets & ₹18 Cr Business Valuation
- Plant & Machinery
- Moulds / Tools / Production Equipment
- Furniture & Fixtures
- Electrical Installations
- IT Infrastructure
Detailed fixed asset schedule with depreciation & current book value available under NDA.
- Normalized EBITDA & Industry Valuation Multiples
- Order Book Strength & Customer Relationships
- Technical Know-how & Process Capabilities
- Future Growth Potential & Scalability (DCF)
- Strategic Value to an Acquirer
2. Revenue Contribution from Top Customers
3. Vendor-wise Purchase Details
No single vendor holds monopolistic control over critical raw materials. Alternative suppliers are available for all key inputs. A detailed vendor ledger summary can be shared under confidentiality.
4. Reasons for Decline in EBITDA & PBT Margins
Order Book & Revenue Visibility
Current Order Book
100% confirmed · 90% already delivered
FY26‑27 Pipeline
Expected revenue visibility for next 2‑3 years
Strong momentum: FY26 revenue already ₹12 Cr achieved by Feb’26, on track for ~₹13.5 Cr.
Product Portfolio & Customer Base
Top 3 products contribute 80% of total revenue. Diversified portfolio with specialised defence applications.
Marquee Customers & Market Access
- Established relationships with Defence PSUs and Ordnance factories
- Preferred vendor for critical ground support equipment – repeat orders from all key customers
IP, Approvals & Management Continuity
Patents & Certifications
- Patents: Fully owned product patents (transferable)
- Defence Validations: DRDO, DPSU collaborations
- Certifications: Indigenous design credentials
All patents are product patents owned by the company and will be transferred as part of the acquisition.
Operational Continuity
Promoter dependency: Currently substantial – mitigated by 5‑year handholding commitment.
Second‑line leadership: Active recruitment for order procurement & engineering. Structured transition plan in place.
Working Capital & Investment Highlights
Working Capital & Receivables
- Requirement: 25‑45% of order value (defence typical)
- Advance payments: usually 10‑20% (sometimes nil for MSMEs)
- Receivable days: average 70 days (better than industry)
- Current receivables: ₹1.28 Cr
- Cash blockage period: 9‑15 months from order to final payment
Key Investment Highlights
- 58.76% revenue growth (FY25) – strong recovery
- ₹13 Cr order book (90% executed)
- ₹15‑20 Cr pipeline for FY27
- Marquee customers: HAL, BEL, ECIL
- Fully owned product patents (transferable)
- Vendor codes with TATA, GE, ABB, all PSUs
- 5‑year promoter handholding
- Flexible deal structure (₹22 Cr all‑in or ₹18 Cr business only)
✓ Defence sector tailwinds · Atmanirbhar Bharat · China+1 opportunity
NEXT STEP: STRATEGIC ACQUISITION INQUIRY
We look forward to partnering with you to unlock this defence opportunity.
CA DHIRAJ OSTWAL & Co.
Your Vision, Our Expertise— Seamless M&A Solutions.
**Private & Confidential:** This document contains confidential information and is not an offer for sale.
Defence Manufacturing Enterprise | Private & Confidential