CFF Fluid Control Ltd, a leading player in the defence engineering sector, is bringing its Initial Public Offering (IPO) to the market via the BSE SME platform. This fixed-price issue is aimed at mobilising ₹87.75 Crores through a fresh issue of 15 lakh equity shares priced at ₹585 each. The IPO is open for subscription from July 09 to July 11, 2025, with allotment expected on July 14 and listing tentatively set for July 16, 2025.

About the Company

CFF Fluid Control Ltd was established with a vision to deliver cutting-edge technology and engineering solutions for India’s defence sector. Right after its inception, the company signed a Technology Transfer (TOT) agreement with Coyard SAS, France, enabling it to introduce new-age fluid control systems and mechanical equipment specifically designed for the Indian Navy's submarine programme.

This agreement provided the company with advanced technology to manufacture critical components for underwater platforms, marking it as a strategic partner in India’s Atmanirbhar Bharat defence initiative. The firm's growth aligns with India’s push for self-reliance in defence production, making it an appealing prospect for investors looking to benefit from government-supported sectors.

IPO Details at a Glance

• Issue Type: Fixed Price Issue

• Total Issue Size: ₹87.75 Crores

• Price per Share: ₹585

• Total Shares Offered: 15 lakh equity shares

• Lot Size: 200 shares

• Minimum Retail Investment: 2 lots (400 shares) = ₹2,34,000

• Market Capitalisation at IPO Price: ₹1,226.98 Crores

• Subscription Period: July 09–11, 2025

• Tentative Allotment Date: July 14, 2025

• Tentative Listing Date: July 16, 2025

• Listing Exchange: BSE SME

Aryaman Financial Services Limited is the Book Running Lead Manager (BRLM) for the issue, while Cameo Corporate Services Limited acts as the Registrar. Aryaman Capital Markets Limited serves as the Market Maker for this IPO.

Grey Market Premium (GMP) Insight

The Grey Market Premium (GMP) for CFF Fluid Control IPO was recorded at ₹50 as of July 04, 2025. This suggests an expected listing price of approximately ₹635, an 8.54% premium over the issue price. However, investors should remember that GMP is an unregulated, unofficial indicator driven purely by demand and supply in informal markets. It is widely used for gauging investor sentiment but does not guarantee listing performance.

Live Subscription Status

As of 12:00 PM on July 11, 2025 (final day), the IPO was subscribed 2.30 times, indicating healthy interest but without the over-the-top frenzy seen in some recent SME issues. This suggests a balanced demand, which can be positive for long-term stability.

Investors can check real-time subscription updates on the BSE SME platform.

Financial Performance and Strength

One of the key selling points for CFF Fluid Control Ltd’s IPO is its solid financial track record, which signals consistent growth and operational scalability:

• Revenue from Operations:

  • FY23: ₹7,109.94 Lakh

  • FY24: ₹10,697.57 Lakh

  • FY25: ₹14,609.79 Lakh

• EBITDA:

  • FY23: ₹1,882.82 Lakh

  • FY24: ₹3,085.38 Lakh

  • FY25: ₹4,130.94 Lakh

• Profit After Tax (PAT):

  • FY23: ₹1,013.60 Lakh

  • FY24: ₹1,708.78 Lakh

  • FY25: ₹2,385.03 Lakh

These numbers show steady growth in both revenue and profitability, indicating that the company has successfully scaled operations while maintaining margins.

Valuation Metrics

• Pre-Issue EPS (FY24): ₹12.25

• Post-Issue EPS (FY24): ₹11.37

• Pre-Issue P/E Ratio: 47.75x

• Post-Issue P/E Ratio: 51.45x

• Industry Average P/E Ratio: 80x

These figures suggest that the IPO is fairly priced when compared to industry peers. Investors can expect reasonable valuation support post-listing.

Return Ratios

• ROCE (FY24): 21.84%

• ROE (FY24): 17.42%

• RoNW (FY24): 16.13%

These healthy return ratios indicate that the company is using its capital efficiently, providing strong returns on both equity and overall employed capital.

Management Strength

The company is led by experienced promoters:

• Mr. Sunil Menon

• Mr. Gautam Makker

Both bring over three decades of business experience and more than two decades in the defence sector. Their expertise has been instrumental in securing technology partnerships and scaling production. Their track record is seen as a key asset for the company’s long-term growth.

IPO Objectives: Use of Proceeds

CFF Fluid Control plans to use the net proceeds as follows:

1. ₹7,260.00 Lakhs for working capital requirements.

2. ₹833.00 Lakhs for general corporate purposes.

This deployment is designed to enhance production capacity, manage the growing order book, and support operational scalability in line with upcoming defence contracts.

Strengths of CFF Fluid Control Ltd

• Specialised Defence Engineering: Focused on submarine and naval systems, offering high entry barriers for competitors.

• Technology Partnership: TOT with Coyard SAS, France ensures access to world-class designs.

• Strong Financial Growth: Steady increase in revenue and profitability over the last three years.

• Government Support: Beneficiary of Atmanirbhar Bharat defence indigenisation initiatives.

• Experienced Leadership: Proven ability to deliver on strategic goals.

Risks and Considerations

• Client Concentration: Heavy reliance on a few government defence orders.

• Regulatory Dependence: Subject to defence procurement policies and geopolitical dynamics.

• SME Platform Limitations: Lower liquidity and potentially high volatility post-listing.

• High Minimum Investment: ₹2.34 lakh entry barrier may limit retail investor participation.

• Grey Market Uncertainty: GMP may not reliably predict listing price due to informal nature.

GMP Trend and Listing Outlook

The ₹50 GMP (as of July 04, 2025) suggests an 8.54% premium, but actual listing performance will depend on:

• Overall market sentiment.

• Subscription demand.

• Sector rotation into defence and manufacturing themes.

• Liquidity conditions on the BSE SME platform.

Historical SME listings show high initial volatility, so investors should brace for swings post-listing.

Investor Guidance

Given the strong fundamentals, reasonable valuation, and defence-sector tailwinds, the CFF Fluid Control IPO may appeal to long-term investors seeking exposure to India’s defence manufacturing story.

However, it is not risk-free. The SME segment’s illiquidity and the minimum investment size make it suitable only for risk-tolerant investors who can accept volatility for potentially higher returns.

Our view: Risk-seeking investors may consider applying for potential listing gains, while those with a longer horizon can see it as a strategic defence-sector bet in line with Atmanirbhar Bharat goals.

Disclaimer:
This analysis is for educational and informational purposes only. It does not constitute investment advice or a solicitation to buy or sell any securities. Investors should perform their own due diligence or consult a SEBI-registered financial advisor before making any investment decisions. All data is based on information available as of the publication date and may be subject to change.

The Upcoming IPOs in this week and coming weeks are Savy Infra, Monika Alcobev, NSDL.

The Current active IPO are Anthem Biosciences, Spunweb Nonwoven.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.