Aditya Infotech IPO: SBI Sec suggests to avoid it; Arihant Capital, Swastika are positive

The initial public offering (IPO) of Aditya Infotech, which is set to hit Dalal Street on Tuesday, July 29, has garnered mixed reviews from the analysts so far. The company shall be offering its shares in the range of Rs 640-675 apiece, for which investors can apply for a minimum of 22 equity shares and its multiples thereafter.

Aditya Infotech, which offers video security and surveillance products under 'CP Plus' brand name, is raising Rs 1,300 crore via IPO, which includes a fresh share sale of Rs 500 crore and an offer-for-sale (OFS) of up to 1,18,51,851 equity shares. The IPO, which shall open on Tuesday, July 29 can be subscribed until Thursday, July 31. Anchor details for the issue shall be announced later today.

Aditya Infotech is a leader in the video security and surveillance products in India with a 21 per cent market share. The recent quality norms introduced by the Central Govt from April 2025 should benefit domestic manufacturers. It is also looking at backward integration into components such as plastic and metal housings which should boost margins going ahead, said SBI Securities.

"The FY25 financials and ratios however are not comparable with previous years due to consolidation of AIL0Dixon JV. The stock trades at FY25 P/E of 77times, which we believe is exorbitant, in the backdrop of mid-teen return ratios and weak operating cash flows. Investors are recommended to 'avoid' the issue and track performance post-listing," it added.

Aditya Infotech is expected to grow at a CAGR of 16.46 per cent through 2030. Backed by its leadership in the CP PLUS brand and longstanding relationships with key OEMs, distributors, and system integrators, the company continues to invest in technology, innovation, and nationwide expansion through a broader retail and distribution footprint, said Arihant Capital Markets.

With a strong balance sheet, prudent capital allocation, and a focus on quality and governance, AIL is well-equipped to navigate near-term challenges and deliver sustainable long-term value. We believe that being the only listed player in the segment provides a competitive edge. The issue is valued at a P/E ratio of 20.4 times and an EPS of Rs 33," it added with a 'subscribe for long-term' rating.

ICICI Securities and IIFL Capital Services are the book-running lead managers of the Aditya Infotech IPO, while MUFG Intime India (Link Intime) is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE, with Tuesday, August 5 as the tentative date of listing.

Aditya Infotech's core business involves providing electronic security and surveillance products, with a strong presence across India. Its Ebitda margin expanded to 8.27 per cent in FY25, reflecting operational efficiency and growing demand, said Swastika Investmart in its IPO note.

"Based on recent financials and dependence on key suppliers like Dahua, the issue appears reasonably priced but carries concentration risks. Given the company's pan-India network, diversified product portfolio, and growth potential in the surveillance market, investors may consider applying for long-term and listing gains," it added.

The IPO of Aditya Infotech has managed to hold its ground in the grey market. Last heard, the company was commanding a grey market premium (GMP) of Rs 220-225 apiece, suggesting a listing of pop of 32-33 per cent for the investors.

The IPO is being closely watched due to the company’s market leadership and strong revenue base, though some caution arises from the concentrated promoter control and niche business model, said Jickson Sajee, Research Analyst at INVasset PMS. "The business operates in a competitive hardware segment with an evolving technology cycle. Long-term valuation will depend on execution and broader demand trends in security infrastructure," he said.