This Defence Company Owns 100% IP, Dominates Exports & Is Now Eyeing IPO; Here’s Why Markets Are Watching

Tonbo Imaging Limited, a global defence electronics original equipment manufacturer (OEM), has filed its Draft Red Herring Prospectus (DRHP) with SEBI.

An Offer for Sale (OFS) of up to 18,085,246 equity shares with a face value of Rs 2 each is part of the company's initial public offering (IPO). 1,960,000 equity shares from Promoter Selling Shareholders, 339,700 equity shares from Promoter Group Selling Shareholders, and 15,635,046 equity shares from Investor Selling Shareholders make up the Offer for Sale.

Qualcomm Ventures, Artiman, Edelweiss Value, Celesta Capital II LP, HBL Engineering, Tenacity Ventures, India Exim Bank, and Florintree are among the company's marquee investors. The book running lead managers for the IPO are JM Financial Limited and IIFL Capital Services Limited.

Tonbo Imaging was founded in 2003 by technicians who had previously worked for Sarnoff Corporation and the U.S. Department of Defence. After being acquired by its promoters in 2012, the firm changed its focus to producing defence-related products. In terms of revenue, EBITDA, and PAT margin growth (CAGR FY23-FY25) among listed peers, Tonbo Imaging is the fastest-growing defence technology company in India, according to the F&S Report in its DRHP. In terms of sales value, it was also the largest producer of thermal imaging devices for the Indian government and defence organisations during that time.

The firm is India's largest supplier of thermal imaging equipment, accounting for 93% of the nation's exports in FY25. Global military, law enforcement agencies, homeland security organizations, and international defense OEMs are among its diverse clientele.

The firm creates, develops, and produces advanced sensing, processing, communication, and guiding systems for surveillance, reconnaissance, targeting, and control applications that are free under the International Traffic in Arms Regulations of the United States.

For defense deployment, it is transitioning from standalone tactical systems to integrated autonomous platform solutions that integrate various hardware and software subsystems.
The company is one of the few defense companies in India that owns all of its intellectual property, including electronics, embedded software, and optics, and does not rely on outside technology partners.

It uses an asset-light business model, outsourcing manufacturing to certified electronics manufacturing services (EMS) partners like Kaynes Technology India Limited and Avalon Technology and Services Private Limited while keeping ownership of the core design and intellectual property. All prototype development, system integration, and qualification testing are carried out internally.

As of September 30, 2025, it had an order book of Rs 2,665.70 million. Additionally, between October 1, 2025 to November 30, 2025, it has received orders aggregating to Rs 716.80 million. For the three months ended June 30, 2025, revenue from operations stood at Rs 686.77 million, with India contributing Rs 632.86 million, accounting for 92.15% of total revenue, while the rest of the world (Middle East/Africa) contributed Rs 41.70 million, representing 6.07%; Europe and Asia accounted for Rs 3.19 million (0.46%) and Rs 7.69 million (1.12%), respectively, during the quarter, while profit after tax (PAT) for the period was Rs 54.31 million, with a PAT margin of 7.68%.

In Fiscal 2025, revenue from operations increased to Rs 4,690.80 million, with Europe emerging as the largest contributor at Rs 3,065.18 million, accounting for 65.34% of total revenue, followed by India at Rs 1,570.44 million (33.48%), Asia at Rs 7.69 million (0.16%) and the United States at Rs 0.51 million (0.01%), while PAT stood at Rs 727.60 million, reflecting a PAT margin of 15.34%.

Compared to Rs 2,081.46 million (48.61%) in Fiscal 2024 and Rs 180.64 million (18.66%) in Fiscal 2023, revenues from foreign clients increased to Rs 3,073.38 million in Fiscal 2025, or 65.52% of revenue from operations. Revenues from clients outside of India were Rs 44.89 million for the three months that ended on June 30, 2025, or 6.54% of the total revenue from operations.

Developing airborne systems with high performance EO/IR gimbal for an Indian defense R&D organization, a multi-spectral infrared seeker and command launcher unit with advanced computer vision capabilities for a defense manufacturing company, and an affordable FSO communication system appropriate for terrestrial and naval applications that addresses the shortcomings of current FSO technologies in difficult environments for Indian armed forces are some of its major projects. It has more than 20,000 units installed in 24 countries as of June 30, 2025.