CFF FLuid Control ₹88 Crore IPO Opens at ₹585 with Defence Industry Focus and 8 GMP

CFF FLuid Control Limited, a specialist in delivering cutting-edge fluid control technology for India’s defence sector, has opened its ₹87.75 crore Fixed Price IPO on the BSE SME platform.

This IPO features a 100% Fresh Issue of 15 lakh shares, designed to raise capital for working capital requirements and general corporate needs.

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

The listing is expected on 16 July 2025 following allotment finalisation on 14 July 2025.

IPO Structure, Price and Lot Details

• Total Issue Size: ₹87.75 Crores.

• Fixed Price: ₹585 per share.

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

• Lot Size: 200 shares.

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

This large minimum investment is typical for SME issues, aiming to ensure committed participation from informed investors.

Grey Market Premium (GMP) Suggests Listing Upside

As of 04 July 2025, the Grey Market Premium (GMP) for CFF FLuid Control IPO was ₹50 per share, reflecting an 8.54% listing gain potential.

This moderate premium signals solid investor confidence while remaining mindful of market risk.

Key Points about GMP:

• Informal, unregulated, indicative only.

• Can be volatile depending on demand and sentiment.

• Useful but not guaranteed predictor of listing performance.

• Should be interpreted cautiously by investors.

Robust Early Subscription Demand

On 10 July 2025, 11:00 AM, the IPO had achieved 1.26x subscription on the second day.

While SME IPOs often see big spikes on the final day, this early demand suggests healthy investor interest, likely driven by:

• Defence sector exposure.

• Reasonable valuation compared to industry peers.

• Steady financial growth.

Company Background: Serving India's Strategic Defence Needs

CFF FLuid Control Ltd was established to deliver advanced engineering solutions to India’s defence industry.

At inception, it signed a Transfer of Technology (TOT) agreement with Coyard SAS France, introducing next-generation fluid control and mechanical equipment to Indian Navy's submarine program.

This early strategic partnership positioned CFF FLuid Control as a key supplier for the under-construction Indian Navy submarines, reflecting:

• Proven technological capability.

• Critical industry trust.

• Strategic alignment with India’s Aatmanirbhar Bharat (self-reliant India) goals in defence manufacturing.

Business Model and Product Strength

The company's core focus is on engineering, designing, and supplying sophisticated fluid control solutions for defence systems.

Its offerings include:

• Fluid control equipment for submarines.

• Complex mechanical assemblies.

• Bespoke defence engineering solutions.

These products are highly customised and subject to stringent quality standards, offering:

• Entry barriers to competition.

• High-margin, low-volume business model.

• Dependence on government defence procurement.

Promoters and Management Experience

CFF FLuid Control Limited is led by:

• Mr. Sunil Menon and Mr. Gautam Makker, each with over three decades of business experience and more than 20 years in the defence sector.

Their experience is crucial in navigating:

• Complex procurement cycles.

• Technical validation processes.

• Strategic industry relationships.

This expertise underpins the company's strong growth and its ability to secure long-term contracts in the highly regulated defence sector.

Strong Financial Performance Indicates Growth Potential

Revenue from Operations:

• FY23: ₹71.09 Crores.

• FY24: ₹106.98 Crores.

• FY25: ₹146.09 Crores.

EBITDA:

• FY23: ₹18.82 Crores.

• FY24: ₹30.85 Crores.

• FY25: ₹41.30 Crores.

Profit After Tax (PAT):

• FY23: ₹10.13 Crores.

• FY24: ₹17.08 Crores.

• FY25: ₹23.85 Crores.

These figures show:

• Consistent top-line growth at ~30–40% annually.

• Strong operational efficiency with rising EBITDA margins.

• Scalable profit model linked to defence capital expenditure cycles.

Valuation and Profitability 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 P/E Ratio: 80x

Profitability Ratios (FY24):

• ROCE: 21.84%

• ROE: 17.42%

• RoNW: 16.13%

These valuation multiples, while not cheap, remain well below the industry P/E of 80x, making the IPO relatively attractive for investors looking at defence sector exposure.

Objectives of the Issue: Funding Growth and Operations

The company plans to deploy the Net Proceeds as follows:

1. ₹72.60 Crores for working capital requirements to fund large defence projects.

2. ₹8.33 Crores for general corporate purposes.

Working capital funding is crucial because defence manufacturing involves:

• Long production cycles.

• Significant upfront costs.

• Delayed payment schedules from government buyers.

This fund raise ensures smooth execution of orders and operational stability.

IPO Listing and Allotment Timelines

• Issue Opens: 09 July 2025.

• Issue Closes: 11 July 2025.

• Allotment Date: 14 July 2025.

• Tentative Listing Date: 16 July 2025 on BSE SME.

How to Check Allotment Status:

• Visit Cameo Corporate Services IPO status page.

• Choose CFF FLuid Control Limited IPO.

• Enter Application Number, PAN or DP Client ID.

• View allotment result instantly.

Strengths, Opportunities and Risks

Strengths:

• Critical supplier to Indian Navy submarine programs.

• Proven TOT partnership with French OEM.

• Seasoned management with decades of sector experience.

• Steady revenue and profit growth.

• Strong defence sector tailwinds under 'Make in India'.

Opportunities:

• Rising defence budgets.

• Greater indigenisation.

• Potential to expand into other defence platforms.

• Export potential in friendly foreign markets.

Risks:

• Dependence on Indian Navy procurement cycles.

• Long payment timelines can strain working capital.

• High pricing and valuation multiples.

• SME platform liquidity constraints post-listing.

• Geopolitical factors affecting defence budgets.

GMP and Investor Outlook

The ₹50 GMP suggests 8.54% listing gain potential over the ₹585 issue price.

This moderate GMP reflects:

• Strong demand for niche defence-sector exposure.

• Solid but not speculative investor interest.

• Confidence in sustained revenue growth.

However, listing gains are not guaranteed and depend on broader SME market sentiment at listing.

Recommendation

For Listing Gains:

• The IPO is priced reasonably vs sector peers.

• Moderate GMP suggests limited but positive upside.

• Apply if willing to take SME platform volatility risk.

For Long-term Investors:

• Attractive strategic niche in Indian defence modernisation.

• Proven capability and strong order book.

• Requires patience to ride out payment cycles and lumpy defence ordering.

Verdict:
Risk-tolerant investors can Apply for potential listing gains and long-term defence sector exposure.

Disclaimer:

This article is intended for informational and educational purposes only and does not constitute investment advice. Readers are advised to consult their financial advisor before making any investment decisions. Investments in securities are subject to market risks. Please read all related documents carefully before applying for the IPO. The data provided is based on publicly available information and may be subject to change.

The Upcoming IPOs in this week and coming weeks are Monika Alcobev, NSDL, Anthem Biosciences, Spunweb Nonwoven.

The Current active IPO are Smartworks Coworking, Asston Pharmaceuticals, CFF Fluid Control, Glen Industries.

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