Teja Engineering Industries

Teja Engineering Industries is coming out with an initial public offering (IPO) of 16,98,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 220 per equity share.
The issue will open on June 30, 2026 and will close on July 2, 2026.
The shares will be listed on SME Platform of NSE.
The share is priced at 22.00 times higher to its face value of Rs 10.
Book running lead manager to the issue is Interactive Financial Services.
Compliance Officer for the issue is Deepak Kumar Laddha.

Profile of the company

The company provides services across Operation & Maintenance (O&M) including Annual Maintenance Contracts (AMC), Erection & Commissioning (E&C) including project works, installation of stainless-steel tubing, Overhauling, Decommissioning & Recommissioning. It also undertakes instrument calibration, nondestructive thickness testing of pressure vessels, and testing and servicing of safety relief valves (SRVs). It operates in the Oil & Gas, Power, and Energy sectors, supporting OEMs, CNG compressor packagers, and public sector undertakings involved in gas distribution and energy infrastructure. With a network extending across India, it provides technical knowledgeable manpower and execution support for CNG stations, gas compression plants, and natural gas distribution terminals. The company’s role is to ensure smooth and efficient operation of energy infrastructure, though it does not manufacture equipment itself.

Its workforce of 1994 is deployed across client sites to deliver Operations & Maintenance, Erection & Commissioning, installation, overhauling, and recommissioning services. Its main area of service is O&M. The company has expanded its services to 15 states: Gujarat, Maharashtra, Telangana, Andhra Pradesh, Tamil Nadu, Kerala, Karnataka, Goa (UT), Madhya Pradesh, Rajasthan, Odisha, West Bengal, Bihar, Tripura and Jharkhand its work includes Erection, Installation, Testing, Commissioning, Operation and maintaining, natural gas compression stations to ensure smooth and reliable operations. This allows it to handle projects of different scales and requirements effectively. It has completed over 300 CNG compressor station projects and manages O&M services for more than 550 units pan India. Its expertise spans the entire lifecycle of gas and energy projects from commissioning to operation and maintenance enabling it to effectively support customers in the City Gas Distribution (CGD) sector.

The company is proud to hold the PESO certification under the SMPV (U) Rules, 2016, specifically Rule 18, for conducting the testing of Safety Relief Valves (SRV) and Pressure Safety Valves (PSV). This certification, issued by the Petroleum and Explosives Safety Organization (PESO), is a testament to its technical competence, compliance with safety standards, and commitment to excellence in the field of natural gas and energy sectors. It is an authorized service provider in India for renowned international company that manufactures safety relief valves (SRVs). The certification & authorization ensures that its testing and inspection processes adhere to stringent safety and quality regulations of environment, enabling it to provide reliable and efficient services to its clients.

Proceed is being used for:

Funding capital expenditure requirements for the purchase of equipment/machineries
Funding the working capital requirements of the company
General corporate purpose

Industry overview

The services sector is not only the dominant sector in India’s GDP but has also attracted significant foreign investment, has contributed significantly to exports, and has provided large-scale employment. India’s services sector covers a wide variety of activities such as trade, hotel and restaurants, transport, storage and communication, financing, insurance, real estate, business services, community, social and personal services, and services associated with construction. To enhance India's commercial services exports, share in the global services market from 3.3% and permit a multi-fold expansion in the GDP, the government is also making significant efforts in this direction.

The Government of India recognises the importance of promoting growth in the services sector and provides several incentives across a wide variety of sectors like health care, tourism, education, engineering, communications, transportation, information technology, banking, finance, and management among others. The Indian services sector was the largest recipient of FDI inflows worth Rs 7,47,413 crore between April 2000-December 2024. India is expected to receive over Rs 52,32,600 crore in alternative investments over the next three years, significantly boosting the startup ecosystem. India's services exports surged 13.6% on-year to a record Rs 33,09,638 crore in FY25.

Pros and strengths

Extensive Pan-India Presence of the company enabling wide market access and service coverage to its Business: A major strength of its business is its presence across Gujarat, Telangana, Andhra Pradesh, Tamil Nadu, Kerala, Karnataka, Goa (UT), Madhya Pradesh, Rajasthan, Odisha, West Bengal, Bihar, Jharkand, Dadra Nagar Haveli (UT), Assam and Maharashtra. This pan-India presence is not only a measure of its reach but also a reflection of its ability to mobilize manpower, resources, and technical expertise across diverse regions. Its teams are deployed at client sites, such as CNG stations, gas compression plants, and group gathering stations, ensuring operations and maintenance activities are performed in line with client expectations and regulatory requirements. The ability to execute projects and provide O&M services simultaneously in several states showcases the scalability of its business model. It also provides resilience, as its operations are not dependent on a single geography. This wide footprint strengthens its reputation as a capable and dependable service provider for critical infrastructure in the Oil & Gas and energy sectors.

Commitment to quality and industry accreditations: The company emphasizes maintaining consistent quality throughout all stages of its services. Its approach focuses on efficient use of resources, effective project execution, and adherence to required standards. From planning to execution, and from testing to final handover, it ensures that each step aligns with client specifications, statutory requirements, and global benchmarks. Its approach is built on three pillars: efficient use of resources, strict adherence to standards, and proactive monitoring of outcomes.

Strong customer relationships as a key business strength: The company has built a strong and diverse clientele across multiple industries and cities nationwide. Its commitment to quality service in E&C services, O&M services, and other specialized services has been instrumental in securing repeat and continuous business from existing clients while also attracting new customers. This approach has helped it establish long-term working relationships and enhance its customer retention strategy. Its Operation & Maintenance services provide a significant advantage in retaining customers, ensuring consistent engagement and ongoing service excellence. It considers its strong customer relationships a competitive edge, contributing to its sustained business growth.

Risks and concerns

High dependence on revenue from O&M services: Its significant portion of its revenue is derived from O&M services. The contribution made by the O&M services for the nine months period ended December 31, 2025 is Rs 5120.99 lakh aggregating to 94.28%, For FY 2025, contributed approximately Rs 5,166.76 lakh, aggregating to 93.57% of total revenue; for FY 2024, Rs 3645.34 lakh, aggregating to 91.099%; and for FY 2023, Rs 2,166.28 lakh, aggregating to 88.14%. Any reduction in client requirements, delay in contract renewal, increased competition, operational disruptions, or changes in market conditions affecting O&M services could materially and adversely impact its revenues, profitability, and overall business operations.

Significant revenue concentration from key customers: Its top customers contribute a significant portion of its revenue from operations. Its top 10 customers accounted for 98.95%, 99.32%, and 99.94% of its revenues during the financial year 2024-25, 2023-24 and 2022-23, respectively. Over the past three years, its top 10 customers have consistently contributed over 98% of its revenue. The loss of any of these key customers could have a significant adverse impact on its financial position. Any decline in the quality of its services or changes in demand from these customers could adversely affect its ability to retain them. It cannot assure that it will maintains the same level of business, or any business at all, from these customers. The loss of business from one or more of them could materially affect its revenues and profitability.

Dependence on skilled manpower and exposure to labour disruptions: The company’s business operations are highly dependent on skilled manpower deployed across client sites, operational facilities, and project locations. The nature of its services, including Operations & Maintenance (O&M), gas compression solutions, valve testing, and calibration, requires specialized expertise, and any inability to attract, retain, or efficiently deploy skilled personnel could adversely affect service delivery, operational efficiency, and business performance. Additionally, the company may be exposed to labour disputes, work stoppages, or strikes, which could disrupt ongoing operations.

Outlook

Teja Engineering Industries is primarily engaged in business of services of testing, calibration and O&M. It operates in the Oil & Gas, Power, and Energy sectors, supporting OEMs, CNG compressor packagers, and public sector undertakings involved in gas distribution and energy infrastructure. With a network extending across India, it provides technical knowledgeable manpower and execution support for CNG stations, gas compression plants, and natural gas distribution terminals. On the concern side, the company has to undertake the hazardous operations in carrying out the construction of CNG Gas Pump station on turnkey basis. Hazards operations can cause personal injury and loss of life, severe damage to and destruction of property and equipment, environmental damage and may result in the suspension of operations and the imposition of civil and criminal liabilities.

The company is coming out with an IPO of 16,98,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 220 per equity share to mobilize Rs 37.36 crore. On performance front, in the F.Y. 2024-25, the company’s total revenue was Rs 5,521.83 lakh, which is increased by 37.97% in compare to total revenue from operations of Rs 4,002.08 lakh in F.Y. 2023-24. Profit after tax is Rs 401.59 lakh for the F.Y. 2024-25 in compared to Rs 252.62 lakh in F.Y. 2023-24.

Meanwhile, the company will install the Gas Engine Driven Reciprocating Heavy Duty Gas Compressor packages directly at client sites. These installations will be executed under compression service agreements, wherein the company earns revenue on a per-unit basis for each cubic meter of gas compressed. Since the compressors will operate at client-provided sites, the company will not require any additional owned or leased property for installation. The compressor assets will remain the property of the company, ensuring full ownership and control while being deployed for client operations.

Teja Engineering Industries Ltd.