Zetwerk's Rs 5,012 Crore IPO Opens to Thin Bids as Loss-Making Platform Tests Investor Appetite

Zetwerk Manufacturing Businesses, the Bengaluru-based platform that connects companies with factory capacity, opened the largest of Thursday's three new IPOs to a slow start. By about 1 pm, the Rs 5,012.33 crore issue had been subscribed 0.07 times, with the retail portion at 0.13 times and the employee quota at 0.16 times. At 12:30 pm the overall figure had been just 0.03 times.

A sluggish first day is common for a five-day book-built issue, and institutions usually bid late. But Zetwerk's offer has a structure that sets it apart from most issues hitting the market this month.

A small retail slice, by design

Because Zetwerk is loss-making, at least 75% of the net offer is reserved for qualified institutional buyers. Non-institutional investors can get up to 15% and retail investors only up to 10%, against the usual 35%.

The issue combines a fresh share sale of Rs 2,830 crore with an offer for sale of 14.45 crore shares worth about Rs 2,182 crore at the top of the price band. Fresh proceeds are earmarked for repaying borrowings at the company and some subsidiaries, funding acquisitions and general corporate purposes. Promoters Amrit Pratik Acharya and Srinath Ramakkrushnan will see their combined holding fall from 15.86% to 11.36%.

Issue details at a glance

• Price band: Rs 143 to Rs 151 per share
• Lot size: 99 shares, or Rs 14,949 at the upper end
• Employee discount: Rs 14 per share
• Bidding window: October 15 to October 19
• Allotment: expected October 21
• Listing: tentatively October 23 on the BSE and NSE
• Registrar: KFin Technologies

Big names in the anchor book

Institutional interest before the opening was strong. On Wednesday, Zetwerk raised Rs 2,251.23 crore from 99 anchor investors at Rs 151 a share. The list included BlackRock, Goldman Sachs, Nomura, Capital Group, Norway's Government Pension Fund Global, the Abu Dhabi Investment Authority, and domestic fund houses such as SBI Mutual Fund and HDFC Mutual Fund.

Growth, but still in the red

Zetwerk's total income rose to Rs 16,100.63 crore in FY26 from Rs 11,492.23 crore in FY25. Losses, however, widened to Rs 1,606.17 crore from Rs 370.71 crore a year earlier, even as adjusted EBITDA improved to Rs 421.34 crore from Rs 322.59 crore. Continuing operations posted a loss of about Rs 64 crore in the June quarter.

That gap between operating progress and bottom-line losses is where brokerages split. SBI Securities and ICICI Direct recommend subscribing with a long-term view, arguing that Zetwerk's hybrid model, which mixes its own factories with a network of partner suppliers, should deliver operating leverage as volumes grow, and that repaying debt with IPO money will cut interest costs. SBI Securities pegs the valuation at about 66.5 times FY26 EV/EBITDA and 1.6 times price-to-sales at the upper band, while flagging working capital intensity and negative operating cash flows as risks.

Swastika has a neutral rating, pointing to thin operating margins and continuing net losses as the main concerns, and suggesting the issue suits only investors seeking high-risk, long-term industrial exposure.

A crowded day for primary markets

Zetwerk is competing for money with two other mainboard issues that opened the same day, Bonfiglioli Transmissions and Sahajanand Medical Technologies, all ahead of Jio Platforms' record issue opening on October 21. How the institutional book fills on the final day will be the real test.

This is an original summary based on public reporting. See our editorial policy for how we source, write, and correct our stories.