India’s electronic surveillance industry is buzzing with anticipation as Aditya Infotech, the country’s largest distributor of video surveillance equipment, opens its ₹1,300 crore initial public offering (IPO) on 29 July 2025. With its stronghold in the security market through marquee brands like CP Plus and Dahua Technology, the IPO is being closely watched by investors looking to ride India’s growing demand for electronic security.

But beneath the glossy numbers lies a complex story—of booming volumes, rising inventories, modest profits, and premium valuations.

🏢 IPO Details at a Glance

• IPO Size: ₹1,300 crore
  • Fresh Issue: ₹500 crore
  • Offer-for-Sale (OFS): ₹800 crore by promoters
• Post-IPO Shareholding:
  • Promoters: 77% (down from 93%)
  • Dixon Technologies: 7%
  • Public Shareholding: 24%
• Price Band: ₹640–₹675 per share
• Valuation: ₹7,912 crore (at upper end)
• Use of Proceeds:
  • ₹375 crore to reduce debt
  • Balance for general corporate purposes

🔐 CP Plus: The Brand Behind the Buzz

At the heart of Aditya Infotech’s dominance is its homegrown brand CP Plus, which commands a 21% market share in India’s organized surveillance segment. In FY25, CP Plus alone contributed 69% of Aditya’s ₹3,112 crore revenue, with Dahua Technology adding 25%, and other brands making up the rest.

This brand mix not only establishes Aditya’s strength in the value chain but also cushions it from over-reliance on third-party suppliers. The company is also innovating with CP Plus by integrating AI-powered analytics (via SparkCognition), laying the foundation for recurring revenue streams through software subscriptions.

🧰 Product Portfolio: Wide, but Unprotected

Aditya’s offerings span:

• Surveillance hardware: CCTV, NVRs, PoE solutions
• Consumer electronics: Dash cams, smart doorbells
• Commercial tech: Thermal imaging, interactive panels

Surveillance equipment accounts for 79% of revenue, while accessories and ancillary items contribute the remaining 21%. However, none of the products or designs are patented, leaving the company exposed to imitation and margin pressures in the long term.

🏗️ Manufacturing Muscle vs Rising Inventory

With a capacity of 17.2 million units, Aditya Infotech is the third-largest surveillance product manufacturer globally, operating at a solid 77% utilization rate in FY25.

Yet, inventory levels have surged 71% year-on-year to ₹871 crore. Whether this stockpile reflects bullish demand expectations or sluggish sales is unclear—but it could stretch working capital and strain margins if the market underdelivers.

⚙️ Supply Chain and Geographic Risks

Aditya’s manufacturing arm AIL Dixon (a JV with Dixon) supplied 52% of material needs in FY25, of which 85% was imported. Also, the top five suppliers accounted for 92% of raw material procurement—highlighting supplier concentration and geographic dependency.

On a brighter note, 85% of CP Plus production is localized, with 96% of raw materials sourced domestically—a vital hedge against geopolitical and import risks.

🛒 Sales, Distribution & Customer Landscape

Aditya has built a formidable distribution network:

• 1,000+ distributors
• 69 exclusive CP Plus Galaxy stores
• Presence in 550 cities and towns

North India leads sales (39%), followed by West (26%), South (20%) and East (15%), ensuring geographic diversification.

Client concentration is minimal, with the top customer contributing just 4% of FY25 revenues. Most top clients, like Bright Computers and Wasp Infotech, have longstanding relationships exceeding 6 years. However, the absence of long-term contracts keeps sales volumes vulnerable to demand shifts.

⚠️ Warranty Liabilities and Margin Impact

Rising product volumes have also brought an uptick in warranty claims, increasing from ₹9.5 crore in FY23 to ₹14.8 crore in FY25. While still under 0.5% of revenue, these costs are not insured, which could affect margins in the event of surging defects or service liabilities.

📉 Profitability: Mixed Signals Despite Growth

Aditya Infotech has grown revenue by 36% in two years, from ₹2,285 crore in FY23 to ₹3,112 crore in FY25. EBITDA grew to ₹258 crore, with margins improving to 8.3%. Yet, net profit dropped by 10% to ₹103 crore in FY25 (adjusted for one-time gains).

Key Financial Highlights:

Higher operating expenses, rising employee costs, and fourfold increase in depreciation have dragged down bottom-line profitability. Return on equity sits at 10%, while return on capital employed is 16%—modest by industry standards.

💸 Valuation: Punchy Pricing or Prudent Bet?

At the upper price band, the IPO values Aditya at a P/E multiple of 77x, a steep premium for a company with modest return ratios and falling PAT. For comparison, Dixon Technologies was allotted shares at ₹340, less than half the current IPO price.

However, Aditya is well positioned in a high-growth sector. India’s surveillance market is projected to double to ₹227 billion by FY30, growing at 16.5% CAGR. Unit sales are also forecast to increase from 40 million to 75 million.

Still, the current valuation leaves limited margin of safety for investors, especially if execution falters or margin expansion stalls.

🧭 Final Takeaway

Aditya Infotech is no ordinary electronics player—it is a market leader, a local brand powerhouse, and a vital cog in India’s security infrastructure. Its brand equity in CP Plus, deep distribution reach, and expanding service offerings provide solid fundamentals.

But this public debut also comes with red flags: rising inventories, premium valuation, supplier concentration, and falling net profits. For investors, the question is not whether the company is promising—it is whether the promise justifies the price.

If the company delivers on localization, expands margins, and grows its service-driven revenue base, the returns could follow. But at ₹675 a share, the expectations are already sky high.

IPO opens 29 July. Enter with optimism—cautiously tempered by valuation reality.

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Disclaimer

This article should not be interpreted as investment advice. For any investment decisions, consult a reputable financial advisor. The author and publisher are not responsible for any losses incurred by investors or traders based on the information provided.