Inox Air Products IPO

Strengths · 8

• 01The company is the largest integrated industrial, medical, electronic and specialty gases company in India by revenue, with a market share of 22.4% for Fiscal 2026 as per the CRISIL report.
• 02EBITDA margin rose to 51.29% in FY2026 from 49.85% in FY2025 and 47.99% in FY2024.
• 03Net debt was negative at Rs 849.75 crore as at 31 March 2026, giving a net debt to equity ratio of -0.12.
• 04Net cash generated from operating activities was Rs 1,264.24 crore in FY2026, higher than the restated profit of Rs 913.87 crore for the year.
• 05On-site operational capacity grew to 16,074 tonnes per day in FY2026 from 12,280 TPD in FY2024, and Merchant capacity to 5,106 TPD from 4,425 TPD.
• 06The customer base is spread out: more than 3,000 customers as at 31 March 2026, with the top five giving only 25.94% of FY2026 revenue from operations.
• 07There are no auditor qualifications in the examination report on the restated consolidated financial information.
• 08Net worth grew to Rs 7,259.75 crore as at 31 March 2026 from Rs 5,491.34 crore as at 31 March 2024.

Risks · 10

• 01The offer is entirely an offer for sale of up to 7,71,56,663 equity shares by five selling shareholders, so the company itself receives no money from the issue.
• 02The selling shareholders bought their shares very cheaply: the weighted average cost of acquisition is Rs 0.06 per share for Siddhomal Air Products Private Limited, Rs 0.26 for Siddho Mal Trading LLP and Rs 0.64 for INOX Chemicals LLP.
• 03The steel, healthcare and pharmaceutical and automotive end-use industries gave 57.26% of revenue from operations in FY2026, 54.94% in FY2025 and 55.75% in FY2024, so a slowdown in these sectors would hit volumes.
• 04A significant number of facilities are operated at customer sites, which makes the business dependent on those customers continuing to operate and on the relationships being renewed.
• 05Revenue growth is slow for the sector the company sits in: 8.75% in FY2026 and 7.72% in FY2025.
• 06Adjusted return on capital employed fell to 24.45% in FY2026 from 27.58% in FY2025 and 30.24% in FY2024, and return on net worth fell to 12.59% from 13.94% in FY2024.
• 07There are 60 tax proceedings and one action by a statutory or regulatory authority outstanding against the company, with an aggregate amount of Rs 22.15 crore excluding interest and penalty.
• 08Proceedings against the promoters cover 4 criminal matters, 5 tax matters and 3 actions by statutory or regulatory authorities, involving an aggregate of Rs 716.01 crore.
• 09Operations depend on an uninterrupted and cost-effective supply of power, fuel and water, and the company flags pricing pressure from customers and competitors as a risk to margins.
• 10The shares were voluntarily delisted from six stock exchanges between 1999 and 2000, so there is no formal market for the shares and no recent traded price to look at.

Inox Air Products Limited makes and supplies industrial gases in India. Its product range covers oxygen, nitrogen, argon, hydrogen, carbon dioxide, acetylene, helium, silane, ammonia and nitrous oxide, along with medical oxygen, welding mixtures and specialty gas mixtures. The CRISIL report cited in the draft prospectus places the company as the largest integrated industrial, medical, electronic and specialty gases company in India by revenue, with a market share of 22.4% for Fiscal 2026.

The company sells through three business verticals. The On-site vertical serves large industrial customers that need a continuous and large-scale supply of oxygen, nitrogen, argon and hydrogen, usually from plants built at the customer's own site. The Merchant vertical supplies bulk gases to downstream manufacturing clusters, MSMEs and fabrication units. The Packaged and Specialty Gases vertical serves smaller customers, healthcare providers and specialty industries. The group reports no separate business segments under Ind AS 108.

As at 31 March 2026 the company operated facilities spread across 57 locations in 15 states and one union territory in India. These include air separation units, nitrogen generators, hydrogen production units, cylinder filling stations and storage facilities. Total operational capacity in the On-site business stood at 16,074 tonnes per day and in the Merchant business at 5,106 tonnes per day as at 31 March 2026, up from 12,280 TPD and 4,425 TPD respectively as at 31 March 2024. The company owned 739 transport tankers and had 1,679 bulk customer installations at the end of FY2026.

It had served more than 3,000 customers as at 31 March 2026, across steel, oil and gas, chemicals, healthcare and pharma, electronics and semiconductor, solar, glass, automotive and other manufacturing sectors. Its top five customers gave 25.94% of total revenue from operations in Fiscal 2026 and its top ten customers 31.60%.

The company was incorporated in Maharashtra in 1963 and its registered and corporate office is at Navi Mumbai. Its equity shares were voluntarily delisted from BSE, NSE and the Ahmedabad, Calcutta, Delhi and Madras stock exchanges between 1999 and 2000, so there is no formal market for the shares at present. The promoters are Pavan Kumar Jain, Siddharth Jain, Prodair Corporation, INOX Chemicals LLP, Siddho Mal Trading LLP, Air Products and Chemicals, Inc. and Air Products Manufacturing Corporation. Each equity share of face value Rs 10 was split into 10 shares of face value Rs 1 in June 2026, followed by a bonus issue of 4 shares for every 1 share held in September 2026.

The industry

The CRISIL report cited in the draft prospectus forecasts the industrial gases market in India to grow at a compound annual growth rate of 9% to 12% during Fiscals 2026 to 2032, faster than global growth, helped by rising demand for hydrogen. The report links this growth to government programmes such as Make in India, policies that encourage import substitution, and demand from steel, pharmaceuticals, manufacturing, defence, chemicals, healthcare, energy and electronics. Inox Air Products is placed as the largest integrated industrial, medical, electronic and specialty gases company in India by revenue with a 22.4% market share as of Fiscal 2026, and holds leading positions in all three of its verticals.

Customer concentration: The top five customers gave 25.94% and the top ten customers 31.60% of total revenue from operations for Fiscal 2026.