A good business can still be a bad deal for the person buying it from its owners. HD Fire Protect is a good business. The question is who this IPO is for.
The issue
HD Fire Protect opens on Tuesday, 13 October 2026 and closes on Thursday, 15 October, at a price band of ₹258 to ₹271, lot size 55 shares (₹14,905 at the top). The issue is ₹712 crore and all of it is an offer for sale. There is no fresh issue, so the company does not get a single rupee. Listing is expected on 21 October on NSE and BSE. At ₹271 the company is valued at ₹4,749 crore. Allocation is 50% QIB, 15% NII, 35% retail. Ambit, Anand Rathi and IIFL are the lead managers.
What the company does
HD Fire makes fire protection equipment and systems: sprinklers, deluge valves, foam systems, gas suppression and custom-engineered systems, from two plants in Jalgaon and Thane. It holds 21 UL listings and 87 FM approvals, which are the certifications refineries, data centres and Gulf oil projects ask for. CRISIL ranks it the second-largest Indian maker of fire protection equipment by operating income and the largest exporter by value in FY25. About 35% of revenue is exports. It sold to 2,066 customers in FY26; the top 10 were 23.7% of revenue, so there is no single-customer risk.
The numbers
| ₹ crore | FY24 | FY25 | FY26 | Q1 FY27 |
|---|---|---|---|---|
| Revenue from operations | 373 | 433 | 489 | 109 |
| EBITDA | 107 | 138 | 150 | 30 |
| PAT | 88 | 110 | 117 | 24 |
| EBITDA margin | 28.6% | 31.9% | 30.8% | 27.3% |
| ROCE | 37.6% | 39.6% | 40.3% |
This is not a rush IPO. Margins near 30%, ROCE near 40% for three years, and finance cost of ₹0.17 crore in FY26. But growth is slowing. Revenue grew 16% in FY25 and 13% in FY26. Profit grew 25% in FY25 and 6% in FY26. The June quarter margin is the lowest in the table.
Where the money goes
Nowhere in the company. The two sellers are promoters Kusum Harish Dharamshi (₹469 crore) and Harish Narshi Dharamshi (₹243 crore). Their average cost is close to nil, per the offer document. Promoter holding falls from 100% to 85%.
The part I would read twice is the dividend. HD Fire paid ₹56 crore of dividend in FY25 and ₹140 crore in FY26. FY26 profit was ₹117 crore and operating cash flow was ₹92 crore. So the company paid out more than it earned and more than it generated in cash, almost all of it to the promoter family, in the year before the IPO. Net worth fell from ₹397 crore to ₹377 crore. Between that dividend and this OFS, the family takes about ₹850 crore out in about 18 months.
Flags
- Receivables rose 62%, from ₹58 crore to ₹94 crore, while revenue rose 13%. Receivable days went from 45 to 57.
- Inventory rose 25% to ₹87 crore. The cash cycle stretched from 83 to 102 days.
- Contingent liabilities of ₹9.6 crore. Small.
- The top 10 suppliers are 59% of expenses, with no long-term contracts.
- The RHP's peer set is Azad Engineering, KSB, Kirloskar Pneumatic, Elgi Equipment and Ingersoll-Rand, at P/Es of roughly 32x to 134x. None of them makes fire protection equipment. There is no close listed peer, so the comparison tells you little.
Valuation
At ₹271 the price is 40.7x FY26 earnings and 12.6x book. On the June quarter run-rate it is closer to 50x. For a debt-free business with 40% ROCE and a certification moat, a premium multiple is not absurd. For one growing profit at 6%, 41x is the full price, and then some.
Subscription and GMP
The grey market premium was ₹86 on 12 October, about 32% over the top of the band. That is demand for listing day, not a view on the business.
Verdict
Strong business, real moat, clean balance sheet. But the money goes out, not in: first as a dividend bigger than profit, then as a 100% OFS at 41x earnings. Good company, and the price is set for the seller.
Educational purposes only, not investment advice. DYOR.
Sources: HD Fire Protect Limited RHP and price band announcement, October 2026; Chittorgarh and Investorgain IPO pages, 12 October 2026; Business Today, 7 October 2026; IPO Watch review, October 2026.
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