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Tonbo Imaging India

• Tonbo Imaging India is coming out with a 100% book building; initial public offering (IPO) of 1,21,74,046 shares of face value Rs 2 each in a price band Rs 665-700 per equity share.
• Not more than 50% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 35% for the retail investors.
• The issue will open for subscription on October 15, 2026 and will close on October 19, 2026.
• The shares will be listed on both BSE and NSE.
• The face value of the share is Rs 2 and is priced 332.50 times of its face value on the lower side and 350.00 on the higher side.
• Book running lead managers to the issue are JM Financial and IIFL Capital Services.
• Compliance officer for the issue is Ankita Agarwalla. 

Profile of the company

Tonbo Imaging India is a global defence electronics original equipment manufacturer (OEM). The company designs, develops and manufactures sensing, processing, communication and guidance systems for surveillance, reconnaissance, targeting, and control. It has developed a diversified product portfolio including thermal imaging cores, weapon sights, hand-held thermal imaging binoculars, targeting systems, missile seekers, fire control systems, missile guidance systems amongst others to enable autonomy on the battlefield.

The company’s expertise spans design capabilities across electro optics and infrared systems (EO/IR) and embedded vision systems serving both - Indian and global companies. Over the period of April 2024 to March 2026, the company is the largest manufacturer, in terms of sales value, of thermal imaging systems to government and defence agencies in India. In addition, the company’s market share of thermal imaging exports from India was 94% in terms of units, positioning it as the largest exporter of thermal imaging systems from India by units shipped between FY24 and FY26.

With over 28,000 systems deployed across 24 countries, as of June 30, 2026, the company is a recognized OEM providing a diverse suite of field-proven electro-optic products free from export restrictions under International Traffic in Arms Regulations (ITAR). ITAR is a U.S. export control framework governing the sale, transfer, and sharing of defence related technology, data, and services. Its EO/IR portfolio is free from ITAR, enabling it to serve non-aligned and export sensitive markets more flexibly, as it designs and develops its products within India, making it one of the few global OEMs capable of supplying cutting-edge technologies without geopolitical export limitations.

Proceed is being used for: 

• Achieving the benefits of listing the Equity Shares of face value of Rs 2 each on the Stock Exchanges and for the Offer for Sale of Equity Shares.

Industry overview

India's defence budget has demonstrated steady, if incremental, year-on-year growth over the past decade, reflecting both inflationary adjustments and a broader shift toward modernisation, strategic deterrence, and indigenisation. In FY2015, defence spending stood at $58.9 billion, and by FY2025 it had risen to $92.05 billion, marking a 4.6% CAGR over the ten-year period. India’s defence spending is projected to increase steadily from $96.0 billion in FY2026 to $113.6 billion by FY2030, reflecting a compound annual growth rate (CAGR) of 4.3% over the forecast period. For FY2025-26, the Ministry of Defence has allocated Rs 6,81,210.27 crore ($78.9 billion) to defence, of which Rs 1,92,388 crore ($22.3 billion) is earmarked as capital outlay. This represents a continuation of India’s gradual but deliberate pivot toward capability-building and modernization.

Meanwhile, defence electronics are the sensor, computing, communications, and control subsystems that let military platforms sense, decide, and act. They span sensing (Electro-Optical/Infrared, radar, ESM/EW, acoustic), navigation and timing (INS, GNSS, altimetry), onboard processing and AI (mission computers, DSP/FPGA/GPU, data-fusion), secure communications and networking (RF datalinks, SATCOM, FSO), human-machine interfaces (displays, sights), power/thermal management, and weapon electronics (seekers, fuzes, guidance and fire-control). These rugged, low-SWaP, cyber-resilient building blocks cut across soldiers, vehicles, ships, aircraft, missiles, and unmanned systems, and integrate with C4Intelligence, Surveillance, and Reconnaissance (ISR) for interoperable, network-centric operations. The global defence electronics market expanded from $60.7 billion in CY2020 to a projected $232.1 billion by CY2030, reflecting a CAGR of 14.4%. Growth is driven by digitization, modernization of legacy platforms, and rising demand for electronic warfare and surveillance.

Defence electronics is growing faster than the overall defence equipment market, with its share of total defence spending expected to climb from 25% in CY2020 to over 35% by CY2030. This shift is even more pronounced in programs involving Intelligence, Surveillance, and Reconnaissance (ISR), integrated air defence, multi-domain command and control, and autonomous systems, where electronics dominate both cost and capability envelopes. A growing global trend in modern battlefield digitisation is the adoption of Android Team Awareness Kit (ATAK) as a de-facto standard for connected soldier systems and real-time information sharing. ATAK is a global standard for connected systems on the battlefield and information sharing. It provides better situational awareness by assimilating information from sights, handheld imagers and drone imagery. 

Pros and strengths 

Proprietary technology ownership: The company is one of the few companies in India with no dependence on external technology partners as it owns 100% of its intellectual property since Fiscal 2024, pursuant to assignment agreements dated March 11, 2024 through which the company purchased intellectual property from CEAQ Singapore. The proprietary technology ranges from optics to embedded software and electronics including critical subsystems for sighting systems, including proprietary video engines, AI-accelerated image processing, and sub-5 urad multi-axis gimbal stabilization.

Asset-light business model: The company operates an asset-light business model with a focus on product design and development. The company is integrated horizontally: core design and IP are developed in-house, while manufacturing is outsourced to Electronics manufacturing services (EMS). The company’s contract manufacturing model allows it to focus on its R&D capabilities. Its EMS partners include certified contract manufacturers such as Kaynes Technology India Limited (Kaynes) and Avalon Technology and Services Private Limited (Avalon), who possess the technical expertise and required certifications.

Global defence market presence: The company is a global defence electronics OEM with a clientele spanning both domestic and international markets. Its products have been sold globally to customers in EU, US and Israel, enabling adoption in India through the global first approach, underscoring their acceptance in some of the world’s most advanced defence markets. As of June 30, 2026, the company has deployed over 28,000 tactical systems and served customers across 24 countries. 

Diversified defence product portfolio: The company is a global defence electronics OEM, with a track record of design and delivery of field-tested defence systems, designing and developing products primarily catering to military and armed forces across the globe. It has a portfolio of products addressing surveillance, reconnaissance and targeting applications for ground, air, naval and missile systems. It designs its products baselining its technology with developed markets and pricing them competitively for developing markets. The company’s products have been selected through globally competitive tenders, often prevailing over established international products.

Risks and concerns

Cyclical business and uncertain revenue visibility: The company’s business is cyclical in nature on account of it being geopolitically driven and subject to government budget cycles. Further, tender-based procurement cycle results in poor revenue visibility, which may have an adverse impact on its business, financial stability, results of operations, investor confidence, and the ability to secure financing for growth or innovation.

Significant revenue concentration among top customers: Some of its customers have contributed significantly to its revenue from operations. The company has garnered 92.06%, 53.03%, 86.36% and 72.19% of its revenue from top 5 customers in the three months ended June 30, 2026 and Fiscals 2026, 2025 and 2024, respectively. If its customers choose not to source their requirements from it or to terminate its contracts or purchase orders or tenders, its business, cash flows, financial condition and results of operations may be adversely affected.

Significant reliance on top ten suppliers: The company’s top ten suppliers contributed to a significant portion of its total expenses; 164.00%, 68.77%, 35.46%, and 67.49% of its total expenses in the three months ended June 30, 2026 and the Fiscals 2026, 2025 and 2024, respectively. The company is dependent on its top ten suppliers and failure to maintain its relationship with its suppliers could adversely affect business, financial condition, results of operations and prospects.

Dependence on international markets: As a global defence electronics OEM, the company’s business is dependent on exports and the performance of geographies where it supplies its products. In Fiscal 2025 and 2024, 65.52% and 48.61% of the company’s revenue from operations was from exports and in particular from exports to Europe. Any adverse changes in the geographies where it supplies its products could have an adverse impact on its business, cash flows, results of operations and financial condition.

Outlook

Tonbo Imaging India is a global defence electronics original equipment manufacturer (OEM) engaged in the design, development, and manufacturing of advanced electro-optic, infrared (EO/IR), embedded vision, communication, guidance, and surveillance systems for defence and security applications. On the concern side, the company faces significant risks due to customer and supplier concentration, dependence on exports and European markets, and the cyclical nature of its business driven by geopolitical developments and government budget cycles. Any loss of key customers or suppliers, adverse regional developments, or delays in tender awards could adversely affect its revenue visibility, cash flows, financial condition and results of operations.

The issue has been offering 1,21,74,046 shares in a price band of Rs 665-700 per equity share. The aggregate size of the offer is around Rs 809.57 crore to Rs 852.18 crore based on lower and upper price band respectively. Minimum application is to be made for 21 shares and in multiples thereof thereafter. On performance front, the company’s revenue from operations decreased by 22.69% from Rs 4,690.80 million in Fiscal 2025 to Rs 3,626.48 million in Fiscal 2026. Moreover, the company’s profit for the year was Rs 508.80 million in Fiscal 2026 as compared to Rs 727.57 million in Fiscal 2025.

Meanwhile, the company’s focus on R&D has been critical to the growth of its business. and has improved its ability to address customer requirements effectively. As a result, the company is continuously investing in technology, equipment and skilled employees to develop products that improve its customers’ experience. Further, the company’s focus on strategic areas such as product design, distribution and innovation will drive sustainable growth and maintain a strong pace of design-led product development. This will also provide it the opportunity to consolidate its position with its customers and increase the share of their supply needs that it fulfils.