Garuda Aerospace IPO

Garuda Aerospace filed its confidential DRHP with SEBI on 7 April 2026, targeting a ₹1,000 crore IPO (₹750 crore fresh + ₹250 crore OFS) with listing expected by December 2026. As of publication, the price band, dates and final issue structure are not yet public — the company is in pre-RHP regulatory review. The investment framing rests on three pillars: (1) Garuda is profitable, which is unusual for early-stage Indian dronetech. FY25 PAT ₹18.4 crore (+41% YoY) on revenue of ₹123.5 crore (+12% YoY) gives a PAT margin of ~14.9% — comparable to mature manufacturing peers and materially better than loss-making listed dronetech competitors; (2) 9M FY26 numbers (₹41.2 crore revenue, ₹11 crore PAT) show continued profitability though the H1 vs H2 seasonal pattern in agricultural-drone demand makes annualisation tricky; (3) lead-manager appointments — SBI Capital, Axis Capital, ICICI Securities, IIFL — signal full-mainboard IPO machinery, suggesting institutional-quality book is expected. The structural tailwinds are clear and durable. India's Drone Rules 2021, the drone-PLI scheme, defence-indigenisation framework, and the Namo Drone Didi programme (15,000 women-operated drones by FY27) collectively define a multi-year demand pipeline for domestic drone manufacturers with established product-government-procurement relationships. Garuda has been a named beneficiary across these programmes, which provides revenue visibility that pure-private-sector dronetech competitors lack. The central pricing question is the IPO valuation. ₹1,000 crore raised against trailing PAT of ~₹18-25 crore (FY25 + annualised FY26) implies a P/E in the 40-55x range for a company with revenue under ₹200 crore. That valuation requires aggressive revenue scaling — at least 3-5x over 3-4 years — to justify on standard discounted-cash-flow terms. Comparable: ideaForge listed at high P/E multiples in 2023 and has since traded sideways as revenue scaling proved harder than the IPO thesis assumed. Garuda's bull case is that the agricultural + DaaS revenue mix (vs ideaForge's defence-heavy mix) gives faster scaling potential because the addressable market is wider. The bear case: (1) drone manufacturing in India still depends heavily on imported components — flight controllers, ESCs, motors, sensors — which compresses gross margin and exposes the business to FX + import-licence risk; (2) Namo Drone Didi and other government programmes are tender-based with multi-vendor allocation, so revenue concentration on these programmes is structurally capped; (3) defence drone procurement cycles are long and policy-dependent — a single MoD framework change can compress 2-3 years of revenue plan; (4) the gap between published IPO valuation and the realistic medium-term earnings trajectory will determine whether the stock re-rates like Zen Technologies (positive) or sideways like ideaForge. Neutral pre-RHP. For investors interested in the dronetech category, Garuda's profitability + scale combination is uniquely attractive among listed and pre-IPO Indian peers. The question is entry price. Wait for the RHP, then anchor list, then bookbuild day-1 subscription data. Strong QIB participation (>10x by day 2) would signal institutional conviction in the multi-year story; weak QIB would signal the valuation is too rich relative to near-term earnings visibility.