Amba Auto Sales and Services Ltd. IPO

Amba Auto Sales and Services

• Amba Auto Sales and Services is coming out with an initial public offering (IPO) of 48,24,000 shares in a price band of Rs 130-135 per equity share.
• The issue will open on April 27, 2026 and will close on April 29, 2026.
• The shares will be listed on SME Platform of NSE.
• The face value of the share is Rs 10 and is priced 13.00 times of its face value on the lower side and 13.50 times on the higher side.
• Book running lead manager to the issue is Capitalsquare Advisors.
• Compliance Officer for the issue is Chetan Kumar Hiralal Solanki.

Profile of the company

The company operates as an authorised dealer of Bajaj Auto and LG Electronics India under the brand name Amba Bajaj and Amba LG Best Shop (LG Best Shop), respectively. It has a presence across the automotive retail value chain, including sales of new vehicles, after-sales service and repairs (including sales of spare parts, lubricants and accessories) and facilitation of the sales of third-party financial and insurance products.

Additionally, in consumer electronics, it offers a diversified range of products including air conditioners, televisions, washing machines, refrigerators and small appliances. It has established its market presence in Bengaluru, Karnataka with more than two decades of experience having commenced its business operations as a proprietary concern by setting up its first dealership for two wheelers sales and service. Over the years it has expanded its operations and has acquired dealership for Three-Wheeler, KTM (Sports Motorcycles) & Chetak as well from Bajaj Auto.

Currently, it is an authorised dealer of 4 out of 5 product segments of Bajaj Auto, which includes Motorcycles, KTM, Chetak and Three-Wheeler. It prioritized strengthening its market position in existing regions rather than expanding into new territories. This focused approach has enabled it to establish the company’s brand presence across Bengaluru and build closer connections with the customers while enhancing its understanding of market segments and consumer preferences.

Proceed is being used for:

• Funding capital expenditure for setting up new showrooms and renovating existing ones
• Meeting the working capital requirements of the company
• General corporate purpose

Industry Overview

India’s automobile industry stands as one of the most vital pillars of its economy, consistently ranking among the top contributors to the country's manufacturing output, employment generation, and export earnings. As one of the world’s largest automobile markets by volume, India holds a prominent position in the global automotive landscape, particularly in the two-wheeler and three-wheeler segments. The diversity and depth of India’s automobile sector-from mass-market motorcycles and scooters to CVs and emerging electric mobility solutions-provide it with a competitive edge in both domestic and international markets. India’s automobile ecosystem is vast and multifaceted, catering to a wide spectrum of mobility needs across the country. From the bustling metro cities where passenger cars dominate the urban landscape to rural and semi-urban regions where two-wheelers and three-wheelers serve as essential means of transport, the industry plays a critical role in enabling access, connectivity, and livelihood. With the continuous rise in urbanization, aspirations for personal mobility, and growth in e-commerce and logistics, the demand for diverse vehicle types has accelerated significantly. This has positioned India not only as a manufacturing powerhouse but also as a consumption-driven auto market. The India Two-Wheeler Market was estimated at around 17.97 million units in FY 2024, rising to 18.21 million units in FY 2025, and is projected to reach 20.22 million units by FY 2033, representing a Compound Annual Growth Rate (CAGR) of 1.32% during the 2025-2033 period.

India’s electronics manufacturing sector is heavily dominated by mobile phones, which contribute nearly half of the industry’s total output value. In FY 2023-24, the segment generated about $51.00 billion, a significant increase from the previous year, underscoring India’s rise as the second-largest mobile phone producer globally. This growth is largely driven by robust domestic demand, a thriving export market, and strong government support through initiatives such as the PLI scheme. Consumer electronics, including televisions, audio systems, and related accessories, form the second-largest segment, benefiting from rising household incomes, urbanization, and lifestyle upgrades. Industrial electronics and electronic components have also emerged as key pillars, indicating that India’s manufacturing capabilities are diversifying beyond consumer-focused products into areas like automation, infrastructure, and component localization. Other segments such as automotive electronics and strategic electronics are witnessing accelerating demand, propelled by the expansion of electric mobility and defense manufacturing. Niche areas like IT hardware, wearables and hearables, LED lighting, and telecom equipment, though smaller in share, are fast-growing due to technological innovation and evolving consumer preferences. The Indian consumer electronics market was valued at Rs 3,499.84 billion in FY 2024 and is estimated Rs 4,110.32 billion and is projected to reach Rs 14,876.60 billion by FY 2033, expanding at a compound annual growth rate (CAGR) of 17.44% during the forecast period (FY 2024-FY 2033).

India's automobile industry is on the cusp of a transformative decade, driven by rapid electrification, proactive government policies, rising consumer demand, and technological disruption. As the sector evolves from traditional manufacturing to a mobility-centric ecosystem, it is expected to play a pivotal role in achieving India’s economic, environmental, and industrial development goals. Increased localization, private investments, and digital integration will further propel the sector’s global competitiveness. While, India’s consumer electronics industry is entering a pivotal growth phase, shaped by rising income levels, deepening digital penetration, evolving consumer preferences, and supportive government policies. As the industry transitions from traditional appliances to a smart, connected ecosystem, it is expected to play a critical role in driving India’s digital economy, manufacturing expansion, and export competitiveness. Rapid urbanization, proliferation of ecommerce, and increased focus on domestic production through schemes like PLI will accelerate growth across categories such as smartphones, smart TVs, wearables, and home automation devices.

Pros and strengths

Strategically located logistics and warehousing facilities: The company operates within the local limits of Bengaluru, with a network of multiple showrooms and service centers that provide customers with convenient access to its products and after-sales services. This widespread presence enhances customer reach and service efficiency. In addition, the company operates a strategically located godown aggregating to 20,000 sq. feet, enabling it to maintain adequate inventory levels to meet ongoing demand. As a result, the company recorded an inventory has been 82 days of average cost of sale during in the last financial year 2025 & 75 days during the period ended December 31, 2025. The company estimates holding days to be 75 days in Fiscal 2026, Fiscal 2027 & Fiscal 2028, reflecting effective inventory management practices.

Diversification in product and services: The company operates across multiple segments within the automobile industry, catering to a diverse and expansive customer base. Its product portfolio comprises a wide range of Stock Keeping Units (SKUs), including electric vehicles (EVs), sports bikes, motorcycles, auto rickshaws, and the Qute quadricycle. This diversified offering allows the Company to serve varying customer preferences across both individual and commercial vehicle categories. In addition to product sales, the company provides comprehensive after-sales services, which include routine vehicle servicing, facilitation of third-party insurance, and assistance with vehicle financing options. These value-added services enhance the overall customer experience and contribute to sustained brand loyalty.

Long-term relationship with its OEMs: Its primary original equipment manufacturer(s) (OEMs) are Bajaj Auto for vehicles and LG Electronics for electronic appliances. Its Promoter and the company have nurtured and sustained a long-standing business relationship with Bajaj Auto for more than two decades. This association has been built on trust, consistent performance, and mutual growth. Over this period, Bajaj Auto has duly acknowledged its role and contribution towards augmenting the overall sales of Bajaj Auto’s products in its operating regions. Its relationship with Bajaj Auto has enabled it to expand its operations across diverse business segments, build and strengthen a large and loyal customer base, diversify its product portfolio (SKUs) to address evolving consumer preferences, and drive sustainable growth by aligning its strategies with market developments and industry trends. Furthermore, its relationship with Bajaj Auto has provided it with the ability to capitalize on emerging opportunities in the automotive and allied sectors, thereby enhancing its competitive positioning and contributing to long-term value creation for its stakeholders.

Risks and concerns

Limitations on market expansion due to dealership agreements: Its business operations and growth prospects are significantly influenced and restricted by the terms of its dealership and distribution agreements with its OEMs. Under the dealership agreement executed with Bajaj Auto, it is permitted to operate only within the territory of Bengaluru, Karnataka, and can expand into new territories solely if allotted by the OEMs. These agreements typically authorize it on a non-exclusive and non-transferable basis within specified geographical areas. Consequently, its ability to grow into new markets depends on the discretion of its OEMs. Furthermore, there is no guarantee that its OEMs will not impose additional onerous restrictions, conditions, or performance targets in future agreements or during the renewal process, which could have negative impact on its operational flexibility and profitability.

Heavy reliance on Karnataka market conditions for business stability: The company's entire revenue is currently concentrated and derived from its dealership operations located exclusively in the state of Karnataka, with a primary focus on the city of Bengaluru. This significant geographical concentration of all its automotive (Bajaj Auto) and consumer electronics (LG Electronics) dealership operations heightens its exposure to adverse developments related to regulation, as well as economic, demographic, social, and political changes specifically within Karnataka and the Bengaluru metropolitan area. In the event of a slowdown in the economic activity in Karnataka, or any other adverse developments including, but not limited to, natural disasters (such as prolonged droughts or severe flooding which Bengaluru has experienced), widespread infrastructure disruptions, significant political unrest, civil disturbances, or sustained economic downturn affecting the state's economy, it could experience a material adverse impact on its business, results of operations, and financial condition. Its success is largely dependent on the performance and prevailing conditions affecting the economies of Bengaluru and the broader state of Karnataka.

High dependence on key suppliers: The company heavily relies on external suppliers i.e. its OEMs for the procurement of products required in its operations. Its top 10 suppliers contributed 98.90%, 95.57%, 94.88% and 93.50% of its total purchases for the period ended December 31, 2025 and in the fiscal year 2025, 2024 and 2023, respectively. Any delay, disruption, or failure on the part of these suppliers to deliver products in a timely manner, whether due to logistical issues, financial constraints, regulatory changes, or other unforeseen circumstances could materially impact its business operations. Such disruptions may lead to production delays, increased costs, loss of customer confidence, and reputational damage, which may negatively impact its profitability and financial performance.

Outlook

Amba Auto Sales and Services operate as an authorised dealer of Bajaj Auto and LG Electronics India under the brand name Amba Bajaj and Amba LG Best Shop (LG Best Shop), respectively. It has a presence across the automotive retail value chain, including sales of new vehicles, aftersales service and repairs (including sales of spare parts, lubricants and accessories) and facilitation of the sales of third-party financial and insurance products. Additionally, in consumer electronics, it offers a diversified range of products including air conditioners, televisions, washing machines, refrigerators and small appliances. On the concern side, the automotive industries are sensitive to changing economic conditions and various other factors. Any decline in demand in the products offered by the company, their parts, accessories or related hardware by individuals or entities may adversely impact its business prospects and results of operations. Further, any termination of existing dealership agreements or closure of its showrooms, retail outlets, or service centres, due to various unforeseen circumstances, and any restrictions on opening of new showrooms, retail outlets, or service centers may have a material adverse impact on its revenue and results of operations.

The company is coming out with a maiden IPO of 48,24,000 equity shares of face value of Rs 10 each. The issue has been offered in a price band of Rs 130-135 per equity share. The aggregate size of the offer is around Rs 62.71 crore to Rs 65.12 crore based on lower and upper price band respectively. On performance front, the revenue from operations for FY25 stood at Rs 24,236.65 lakh whereas in FY24 it was Rs 21,122.82 lakh representing an increase of 14.74%. Moreover, net profit after tax for the year ended March 31, 2025, stood at Rs 777.61 lakh and for the year ended March 31, 2024 it was Rs 288.67 lakh representing an increase of 169.38%.

The company aims to strengthen its brand positioning as a premium destination for consumer electronics and home appliances by delivering an exceptional customer experience. This is achieved through live product demonstrations, thoughtfully curated product displays, and personalized consultations that help customers make informed purchasing decisions. Going forward, to foster long-term customer loyalty, the company implements robust after-sales service programs and loyalty initiatives. Additionally, the company has forged strategic alliances with financial institutions to offer attractive EMI schemes, as well as with the dealer for co-branded marketing campaigns. By utilizing advanced data analytics, the company continuously optimizes its product assortment and tailored promotions to meet evolving customer preferences, thereby enhancing both operational efficiency and customer satisfaction. Further, it derives significant brand value from its association with LG Electronics engaged in the manufacturing of consumer electronics and home appliances. By offering products from globally recognized brands, it is able to leverage their reputation for quality, innovation, and reliability, thereby enhancing customer trust and strengthening its own market positioning.