Bengaluru-based manufacturing platform Zetwerk has filed its updated draft red herring prospectus with SEBI for its initial public offering. The proposed IPO includes a fresh issue of shares amounting to ₹2,600 crore. It also features an offer-for-sale (OFS) component of up to 9.68 crore equity shares by existing promoters and shareholders.
IPO Structure and Use of Proceeds
The IPO's offer-for-sale will see participation from promoters Amrit Acharya and Srinath Ramakkrushnan, alongside early investors like Peak XV Partners and Lightspeed. This component allows key stakeholders to partially divest their holdings in the contract manufacturer. The move signals a new phase of growth and public ownership for the expanding company.
Zetwerk has outlined a clear strategy for the capital raised from the fresh issue. A substantial portion, approximately ₹1,800 crore, is earmarked for the repayment or prepayment of existing borrowings. The remaining funds will be allocated towards potential acquisitions and general corporate purposes to fuel further expansion.
Robust Financial Growth and Performance
The company demonstrated impressive top-line growth, with revenue from operations surging over 40% to ₹15,913 crore in fiscal year 2026. This growth was driven by a strong performance in its manufacturing business, which contributed around ₹9,300 crore. The firm's adjusted EBITDA also saw a remarkable fourfold increase, reaching ₹421 crore during the same period.
Despite the revenue growth, Zetwerk's net loss widened, primarily due to specific one-time charges. The company recorded a ₹450 crore provision related to its discontinued civil infrastructure business. An additional accounting charge of approximately ₹800 crore was incurred due to an increase in the founders' ownership stake.
Strategic Shift to In-House Manufacturing
Zetwerk is strategically evolving from its original asset-light marketplace model towards owning more of its manufacturing capacity. The company now operates 26 captive plants across India and internationally, which account for a third of its manufacturing revenue. This shift enables better control over complex, high-value production processes previously difficult to outsource.
This strategic realignment includes a focus on high-growth sectors such as renewable energy, defence, electronics, and AI infrastructure. Energy has become a dominant segment, contributing about 70% of the manufacturing business revenue. The company also discontinued its civil infrastructure business to concentrate on these more strategic areas.
Expanding Global Reach and Customer Loyalty
The company's international business has become a significant growth driver, with revenue from overseas markets reaching ₹2,800 crore in FY26. International operations, primarily in the US and Europe, now contribute nearly 30% of total manufacturing revenue. This expansion is bolstered by global supply chain diversification trends like the "China+1" strategy.
Zetwerk has demonstrated strong customer stickiness, with about 80% of its FY26 revenue generated from repeat clients. The company boasts a net revenue retention rate of 120%, indicating that existing customers are increasing their spending. This loyalty is reflected in its manufacturing order book, which doubled to ₹12,370 crore in FY26.
Zetwerk's upcoming IPO represents a pivotal moment as it solidifies its transition into a manufacturing powerhouse with significant in-house capabilities. By focusing on high-growth sectors and expanding its global footprint, the company is well-positioned to capitalize on evolving industrial demands. The public offering will provide capital to reduce debt and pursue strategic growth, marking a new chapter.