ADIA evaluates anchor stake as Zetwerk prices IPO

Abu Dhabi Investment Authority is pondering an anchor investment in Zetwerk's upcoming stock market launch, as the Indian manufacturing platform readies to invite institutional bids on Wednesday. Over 30 domestic and overseas investors are scrutinizing the possibility of participating in the offering, according to sources familiar with the talks.

Neither the amount ADIA may invest nor any specific allocation has been verified, as expressions of interest do not assure an actual investment. Zetwerk has set its initial public offering price range at Rs143 to Rs151 per share, resulting in a company valuation of around Rs25,583 crore at the higher end. The actual price will be lower than the roughly Rs27,000 crore valuation previously discussed before the price band was announced.

Anchor investors are set to make their bids on October 14, preceding the public subscription window from October 15 to 19. Shares are anticipated to commence trading on the BSE and National Stock Exchange on October 23, pending the completion of allotment and listing procedures. The offering totals approximately Rs5,012 crore, consisting of Rs2,830 crore in freshly issued shares and around Rs2,182 crore in shares previously owned by investors.

Proceeds from the secondary segment will be distributed to selling shareholders rather than to Zetwerk. Other entities considered as possible anchor participants comprise Norges Bank, BlackRock, Goldman Sachs Asset Management, and investment managers linked to State Bank of India and HDFC. Their appearance among potential bidders does not imply they have secured shares or pledged funds.

Anchor allocations are granted to eligible institutional investors prior to an IPO's opening for broader subscription. Their involvement can signal demand and establish a base of institutional shareholders, although allocations and ensuing market performance are distinct matters. The size of any proposed ADIA subscription has not been disclosed.

The authority has not formally announced a final investment decision or outlined conditions for a potential allocation. The completed anchor book's specifics will become more apparent after the institutional bidding process. For Zetwerk, the flotation offers both new capital and a chance for early backers to sell a portion of their holdings.

Its investors include Peak XV Partners, Accel, and Lightspeed Venture Partners, whose stakes aided the growth of the manufacturing business. The company plans to utilize a significant portion of the fresh issue proceeds to pay down debt, with roughly Rs2,160 crore designated for debt repayment. Other declared uses encompass acquisitions and general corporate activities, granting management added financing flexibility after the listing.

Zetwerk links industrial clients with manufacturing partners and also operates its own production plants. Its operations cover renewable energy equipment, precision components, electronics, and capital goods, catering to customers in India and abroad. The business has grown beyond merely arranging manufacturing contracts to directly manufacturing selected products.

Chief executive Amrit Acharya disclosed that company-owned facilities now account for roughly a quarter of its manufacturing activity, highlighting its decision to build capacity in areas requiring closer production oversight. Energy-related products make up the bulk of its business, while precision manufacturing involves components utilized in consumer electronics, electric vehicles, and other applications.

Notable customers in the IPO prospectus include Siemens Gamesa, Acer India, and NTPC Renewable Energy. Financial disclosures accompanying the issue reveal revenue of Rs4,118 crore for the quarter ending June, a surge of more than 55 percent from the same period a year ago. The quarterly loss narrowed to about Rs64 crore, although Zetwerk remains loss-making.

For the financial year concluding March 2026, the company posted a net loss of roughly Rs1,606 crore, compared to Rs371 crore in the previous year. The losses highlight the financial risks that prospective investors must consider alongside the company's revenue growth and expanding order book. Acharya has connected future profitability enhancements to increased operating scale and higher margins.

The company has also shut down its civil infrastructure business, separating activities no longer deemed essential to its manufacturing strategy. The offering is being handled by a syndicate of investment banks, while KFin Technologies is serving as registrar. The ultimate institutional allocation will hinge on demand, pricing rules, and the number of shares set aside for eligible anchor investors under applicable regulations.

Public investors can submit share applications in blocks of 99, with the minimum application at the upper end of the price band equating to Rs14,949. The tentative allotment date is October 21, followed by the anticipated market debut two days later.