Lohia Corp: The World's Raffia Machine Maker Goes Public — Right at the Top of the Cycle?
I. Introduction & Episode Roadmap
Somewhere in the world right now, a fifty-kilogram sack of cement is being lifted onto a truck. It is woven from thin plastic tapes, stitched at one end, printed in three colours, and it costs its buyer roughly the price of a cup of tea. Nobody thinks about it. It is the most invisible object in global commerce — and the machine that made it very likely came from Kanpur.
That is the strange, almost comic fact at the centre of this story. Lohia Corp, headquartered in an industrial estate in Uttar Pradesh, holds a 15.4% share by value of the global market for woven raffia machinery, the equipment that turns polypropylene pellets into the sacks carrying cement, fertiliser, rice, sugar, chemicals and grain across roughly a hundred countries.1 Not the sacks. The machines that make the sacks. It is a second-derivative business — one step removed from the commodity, two steps removed from the consumer — and it is genuinely, verifiably world-leading at it.
On July 30, 2026, Lohia Corp listed on the NSE and BSE.2 The offer raised ₹1,101.28 crore. Every rupee of it went to selling shareholders. The company itself raised nothing.3
That structural detail is the spine of this episode. A pure offer-for-sale tells you a great deal about what the sellers believe and almost nothing about what the company intends to build. And the timing invites a question that the IPO roadshow was never going to answer honestly: Lohia's disclosed operating history shows a business that hit a visible trough — capacity utilisation on its flagship product lines running in the twenties and low thirties as recently as fiscal 2025 — and then, in the single fiscal year immediately preceding the listing, produced a sharp recovery.1 Revenue rose about 25%. Profit rose about 64%. EBITDA margin more than doubled from the carve-out base.1 Then the family sold ₹1,101 crore of stock.
There are two readings. One: fiscal 2026 marked a structural reset — share regained, mix improved, operating leverage finally working on a fixed-cost base that had been carrying idle capacity for years. Two: fiscal 2026 was the top of a capital-goods cycle, and the promoters, who have run this business for four decades and understand its rhythm better than any analyst, chose the best possible year to monetise. Both readings are consistent with the published numbers. The evidence that distinguishes them has not yet been produced, because the company has not yet reported a single quarter as a listed entity.
What follows is an attempt to take the business seriously on its own terms — the engineering, the installed base, the training academy, the patents — and then to stress-test each claimed advantage against what actually happened when cheaper competitors showed up. Along the way there is a corporate carve-out worth understanding, an Indian jute-lobby policy risk that most industrial analyses would skip entirely, and one number buried in the offer documents that reframes the entire recovery narrative.
Start where the company started: with an Austrian machine maker who agreed to teach a Kanpur family how to build looms.
Subscribe on LinkedInII. Origins: A Kanpur Joint Venture With an Austrian Machine Maker (1981)
Kanpur in 1981 was a city living off its own past. It had been the Manchester of the East — cotton mills, leather tanneries, a British-era industrial base along the Ganges that had made it one of colonial India's great manufacturing towns. By the early 1980s that base was decaying. The textile mills were sliding toward the long, grinding sickness that would eventually kill most of them. It was, on paper, a bad place and a bad decade to start a precision machinery company.
The Lohia family started one anyway — and, crucially, did not try to do it alone.
The entity was incorporated as Lohia Starlinger Limited, a joint venture between the Lohia family and Maschinenfabrik Starlinger & Co. of Austria, formed to manufacture circular looms and winders for the raffia industry.4 Almost immediately it added a second European partner: a collaboration with Germany's Windmöller & Hölscher for technical know-how on tape extrusion lines.4 The company sold its first circular looms in 1983 and expanded into tape extrusion in 1984.5
Read the structure of those two deals carefully, because it explains everything that followed. Lohia did not license a finished product to assemble. It licensed the two ends of a production chain — the loom that weaves the fabric, and the extruder that makes the tape the loom weaves. Whoever controls both ends controls the specification of everything in between. That was either extraordinary foresight or extraordinary luck, and forty years later it is difficult to tell which.
It is worth pausing on what raffia machinery actually does, because the technical vocabulary hides a very simple physical process. Take polypropylene granules. Melt them and push the melt through a flat die, producing a continuous film — that is the extruder. Slit the film into thin ribbons and stretch them under heat until the polymer chains align and the ribbon becomes strong in one direction; that is the tape line, and the stretching is what turns a flimsy plastic strip into something that can hold fifty kilos of cement. Wind the tapes onto bobbins — the winder. Then weave the tapes on a circular loom, which spins the bobbins around a vertical axis and produces not a flat cloth but a continuous tube of fabric. Cut the tube, stitch one end, and you have a sack. Everything else — printing, lamination, coating, conversion into valve bags or bulk FIBC bags — is finishing.
The economic logic of betting on this in 1980s India was straightforward and, in hindsight, correct. India was an agrarian economy that bagged enormous volumes of commodity: grain, fertiliser, cement, sugar, seed. Jute was the incumbent packaging material and was politically protected, but jute could not scale to meet the volume, and woven polypropylene was cheaper, lighter, waterproof and stronger per unit of weight. Someone was going to supply the machines that made those sacks. Import substitution policy in that era made importing them expensive and licensing the technology attractive.
The partnership had a defined arc, and the ending matters more than the beginning. Between 2011 and 2015, Lohia Starlinger Limited changed its name to Lohia Corp Limited, "consequent to the exit of 'Starlinger & Co.' altogether as a shareholder."4 The technology partner became a former shareholder — and, in the global market, the principal premium-tier rival. Starlinger & Co. GmbH is today listed among Lohia's key global competitors in the woven raffia machinery market.1
That is the provenance: an Indian company built on Austrian and German engineering DNA, which then bought out or outlived its teachers and went after their customers. The interesting question — and the one the last three years have forced — is how much of the resulting advantage was genuine accumulated capability, and how much was a licensed head start in a protected home market. The answer starts to emerge in the decades when Lohia stopped absorbing technology and started generating it.
III. Building the Category (1980s–2010s): From Licensee to Domestic Leader
The signal that a licensee has become something else is usually bureaucratic and boring. For Lohia it came in 1988, when the in-house R&D facility received official recognition from the Government of India.4 Seven years after incorporation, the company had a research centre the state considered real. That is early for an Indian machinery firm of that era, and it is the first hard evidence that the Lohia family intended to build rather than assemble.
The proof arrived in the products. In the 2001–2005 window the company launched the LSL 6, a six-shuttle circular loom running 900 picks per minute of weft insertion with a 720-bobbin capacity.4 Translated: a machine that weaves the plastic tube substantially faster than what preceded it, with more tapes running simultaneously. In a business where the customer's entire economics are throughput per square metre of factory floor, weft insertion rate is the number that closes the sale. Between 2006 and 2010 came the automatic bag conversion line — automating the step where fabric becomes finished bag — and Duotec, a dual-stage stretching technology for flat film production.4 In the 2016–2020 window the company launched Autoroto, a high-speed automatic switch-over precision winder.4
The pattern across two decades is consistent: Lohia kept attacking the labour-intensive and speed-limited steps of its customers' production lines. That is a specific and defensible strategy for a machinery vendor in an emerging market. Your customer is a small or mid-sized sack manufacturer whose competitive position depends on cost per bag. Every machine that removes an operator or raises line speed pays for itself on a computable payback. You do not have to sell vision. You sell arithmetic.
Alongside the product build-out came a second, less obvious investment. In 2012 Lohia established the Technical Training and Research Centre in Kanpur.4 By March 2025 the TTRC had trained 300 engineers and supervisors and 3,500 operators, and its laboratory carried NABL accreditation under ISO 17025:2017 and ILAC recognition, functioning as a BIS-recognised testing lab for plastic woven sack products.4 A separate Manufacturing Technology Training Centre, established in 2019, runs a two-year technical programme modelled on German dual vocational education for assembly fitters, precision machinists, electrical assembly fitters and sheet metal technicians.4
This is the most interesting structural asset in the company and deserves a moment. Lohia's customers are typically not sophisticated industrial buyers with in-house engineering departments. They are sack manufacturers, often family-run, in India, Africa, the Middle East and Latin America, who need people who can operate a circular loom without wrecking it. If the machine vendor also trains the workforce, certifies the apprentices, and runs the testing lab that validates the output fabric against BIS and ISO standards, the vendor has embedded itself into the customer's operating capability, not just its capital budget. That is a real switching cost — not a claimed one — and it is the sort of advantage that does not appear anywhere on a balance sheet.
The IP position grew alongside. As of March 31, 2026 the company held 71 patents in India, 56 abroad, eight design registrations and 54 trademarks, with applications pending on a further 19 patents and 24 trademarks.1 A year earlier, at the close of fiscal 2025, the count stood at roughly 60 Indian grants with about 28 in process and around 55 international applications filed under the Patent Cooperation Treaty extending to over 40 countries.4 The portfolio is genuinely growing, not a legacy stock being recited.
The company also expanded inorganically and deliberately along the same value chain. Leesona Corp, a 125-year-old winding-technology firm in North Carolina, was acquired in 2019.4 Sundarlam Industries, a lamination and coating machine operation in Bengaluru, was established in 2021.1 OMGM Extrusiontechnik S.r.L. was formed in Italy as a joint venture with OMGM S.a.S. for monofilament extrusion lines, and J.J. Jenkins Inc. in the USA was acquired in 2024 through Leesona, extending into synthetic fibre and monofilament yarn.4
So by the early 2020s, Lohia had the shape of a formidable franchise: full product stack, deep patent book, a training institution its competitors did not have, six manufacturing sites across India, the United States and Italy, and a domestic position it had held for a generation.1
And then it lost close to half its home market.
IV. The Lost Half-Decade: Losing Half the Domestic Market (FY23–FY25)
Here is the most honest way to look at what happened, and it is not a market-share statistic. It is a factory-floor number, and it appears in a plain table in the offer documents.
For the year ended March 31, 2024, Lohia's tape extrusion line facility at Chaubepur had installed capacity of 240 machines and produced 71. That is 29.58% utilisation. Its circular loom capacity at Panki and Peenya was 13,800 machines; it produced 2,907, or 21.07%. Its tape winder capacity was 108,000 units; it produced 23,036, or 21.33%.1
Fiscal 2025 barely improved: tape extrusion 31.25%, circular looms 24.18%, winders 21.02%.1
Read that again. For two consecutive years, across all three of its flagship product families, Lohia Corp ran its factories at roughly a fifth to a third of what they were built to produce. Capital-goods businesses are not designed to operate that way. Fixed costs — engineers, tool rooms, plant, the 2,000-odd permanent employees — do not scale down with order intake. This is what a demand collapse looks like when it hits a manufacturer with real operating leverage, and it is exactly why the carve-out EBITDA margin for fiscal 2024 was 9.03%, less than half of what the same business would earn two years later.1
What was happening underneath? Lohia sells to bag and fabric manufacturers, and those customers buy machines only when they are adding capacity. That decision depends on their own utilisation, which depends on bagging volumes in agriculture, cement, fertiliser and chemicals. The post-COVID period had produced a wave of capacity addition among Indian converters; when demand normalised, those converters were sitting on more looms than they needed and simply stopped ordering. A machinery vendor in that situation does not lose customers — it loses the order, which is worse, because it has no revenue at all until the customer's own utilisation recovers.
Layered on top was competition. The offer documents name the global field directly: Starlinger & Co. GmbH, Yongming Machinery, Hengli Machinery, Tianfeng Plastic Machinery, Polystar and JP Extrusiontech. In the Indian market specifically, the named players are JP Extrusiontech, Navrang Machinery, Starlinger, Pelican Rotoflex and B&B Verpackungstechnik.1 Three of the six global names are Chinese manufacturers, and the competitive proposition of a Chinese circular loom against an Indian one in a down-cycle is not subtle. When your customer's own margins are compressed and their looms are idle, the machine they eventually buy is the cheap one.
Now, a necessary act of analytical discipline. Widely circulated commentary around this IPO described Lohia's domestic share as having fallen from roughly 65% in fiscal 2023 to 40.7% in fiscal 2025. The 40.7% figure is real and sourced — it is the Frost & Sullivan number cited in the offer materials for the domestic woven raffia machinery market by value in fiscal 2025, alongside the 15.4% global share by value for calendar 2024.1 The earlier comparison point is not disclosed on a comparable basis in the offer documents or annual report reviewed for this piece. It should be treated as not disclosed rather than repeated as fact.
The good news for anyone trying to assess this business is that the market-share debate is almost beside the point, because the utilisation table settles the question of whether the business was in trouble. It was. And there is a second, cleaner corroboration: the Indian woven raffia machinery market was estimated at US$150 million in fiscal 2025, and Lohia's disclosed domestic revenue that year was ₹575.82 crore.1 Those two numbers are roughly consistent with a ~41% share. Whatever the starting point, the company was operating at a fraction of capacity in its home market while a defined set of lower-cost rivals was present and named.
What is genuinely notable — and this is where management credibility enters — is how little of this appears in the company's own narrative. The Chairman's letter in the fiscal 2025 annual report describes the year as "a year of focused consolidation for Lohia," in "an environment marked by both opportunities and challenges," and reports revenue, EBITDA and profit without a single reference to competitive pressure, pricing, market share, or the capacity utilisation that had been sitting in the twenties for two years.4 The letter runs to roughly 250 words.
That is a data point, not a scandal. Pre-IPO annual reports of unlisted companies are not written for public investors. But it establishes a baseline: as of June 2025, management's own account of a two-year demand trough contained no diagnosis, no named cause, and no corrective plan. Whether that changes now that quarterly disclosure obligations apply is one of the more useful things to watch.
Before the recovery arrived, however, something else happened — something that had nothing to do with looms.
V. Engineering the Listing Vehicle: The 2024 NCLT Reorganization
On June 5, 2023, a company called Kanpur Packaging Machines Limited was incorporated.1 It had no operations, no revenue and no history. Two years later it would be the entity that institutional investors bid ₹1,101 crore for.
Here is the sequence, because the corporate genealogy is genuinely confusing and the names were recycled in a way that obscures what happened.
The operating business — the one founded in 1981, the one with the Starlinger DNA — sat inside an entity then called Lohia Corp Limited. In fiscal 2023–24, that entity, together with the new shell, filed a joint petition before the National Company Law Tribunal, Allahabad Bench at Prayagraj, for a Scheme of Arrangement to demerge the "Technical Textile Machinery Business," defined as the Core Business or Undertaking, out of the old entity and vest it in the new one.14 The NCLT sanctioned the scheme by order dated April 16, 2024. The appointed date was April 1, 2024; the scheme became effective on May 1, 2024 upon filing with the Registrar of Companies, Uttar Pradesh at Kanpur.4
Then the names swapped. The old Lohia Corp Limited was renamed Lohia Trade Services Limited, subsequently LTS Holdings. Kanpur Packaging Machines Limited was renamed Lohia Corp Limited, receiving a fresh certificate of incorporation dated June 6, 2024.1 The demerger vested the machinery business together with all related estate, assets, liabilities, rights, titles, claims, interests, authorities, accretions and appurtenances — and, importantly, the investments in the five operating subsidiaries — into the new vehicle.4
Strip away the procedure and what happened is a textbook pre-IPO carve-out. A family holding company with a mix of assets separated its crown-jewel operating business into a clean, single-purpose entity with a clean balance sheet, a clean subsidiary tree and no legacy encumbrances, and then took that entity public. The vehicle investors bought in July 2026 is legally two years old and operationally forty-five.
The accounting consequence is one investors should internalise, because it constrains every comparison in this article. Fiscal 2024 figures for the demerged business do not exist as ordinary audited consolidated accounts. They exist as "Special Purpose Combined and Carve-Out Financial Statements (Demerged Business)" — a reconstruction of what the machinery business would have looked like had it always been separate.1 Carve-out statements involve genuine judgement: which corporate overheads get allocated, how shared costs are apportioned, what the notional capital structure is. In the carve-out fiscal 2024 accounts there is no share capital line at all; equity appears as "Owner's net investment" of ₹249.60 crore.1 That is normal presentation for a carve-out. It is also a reminder that the fiscal 2024 comparative — the low base against which the fiscal 2026 recovery is measured — is a construction, not a filed historical account.
The second consequence is structural and worth flagging as a live question. LTS Holdings, the entity left behind, retains whatever the family chose not to move into the listed vehicle. What those residual assets are, and whether any ongoing commercial arrangements run between the listed company and the holding entity, is the sort of thing a public-market investor should read the related-party notes for in the first annual report. The fiscal 2025 Directors' Report states that all related-party contracts were in the ordinary course of business and on an arm's length basis, and that there were no materially significant related-party transactions in conflict with the company's interest during fiscal 2024–25.4 That is a clean statement. It is also a pre-listing statement, made by a board whose independent directors had been appointed just months earlier, and it covers the first year of a two-year-old entity.
The scheme also did the housekeeping a listing requires. Authorised share capital was raised on May 15, 2024 from ₹10 lakh to ₹12.60 crore, and a further ₹12.50 crore of authorised capital was transferred from LTS Holdings under the terms of the scheme, taking the total to ₹25.10 crore comprising 25.10 crore shares of ₹1 each as at March 31, 2025.4 Five independent directors were appointed on September 21, 2024, and the board formally recorded in the fiscal 2025 Directors' Report that "The Company proposes to make an initial public offer by way of offer for sale, by existing shareholders."4
That sentence — written in June 2025, more than a year before the listing — is the honest framing of what this exercise was for. The structure was not built to raise growth capital. It was built to sell shares. None of which is improper. It simply means that when fiscal 2026's numbers arrived, they arrived into a vehicle that had already been engineered for exit.
And what numbers they were.
VI. FY26: The V-Shaped Recovery, Right on Cue for the IPO
Fiscal 2026 was, on its face, the best year in the operating history of this business.
Revenue from operations reached ₹1,717.00 crore, up 24.70% from ₹1,376.87 crore.1 Profit after tax rose to ₹193.45 crore from ₹117.84 crore — up roughly 64%.1 EBITDA reached ₹339.45 crore at a 19.53% margin, against 16.49% the prior year and 9.03% in the carve-out fiscal 2024.1 Net cash from operating activities was ₹325.16 crore, more than double the ₹141.28 crore of fiscal 2025 and nearly 1.7 times reported profit.1 Net debt fell to ₹123.53 crore from ₹175.04 crore and ₹265.76 crore, taking net debt to EBITDA to 0.36 times.1 The order book stood at ₹1,358.52 crore against ₹828.46 crore a year earlier and ₹769.24 crore before that.1
Every one of those is a genuinely good number. Now here is the one that reframes them.
Domestic revenue in fiscal 2026 was ₹992.74 crore, against ₹575.82 crore in fiscal 2025 — an increase of about 72%. Overseas revenue was ₹724.26 crore, against ₹801.05 crore — a decline of about 9.6%.1 Exports fell from 58.18% of revenue to 42.18%.1
The entire recovery, and rather more than the entire recovery, was domestic. The international business — the part of the story that supports "genuinely global franchise, diversified away from India-only cyclicality" — went backwards in the year the company listed.
This is the single most important disclosed fact in the offer documents and it materially changes the interpretation of everything else. If fiscal 2026 were a structural competitive reset — better products, better cost position, share taken from rivals — you would expect it to show up across geographies. It did not. It showed up in one country. The most parsimonious explanation is that the Indian capex cycle among sack and fabric converters turned, hard, and Lohia, as the incumbent with 40%-plus domestic share and idle capacity ready to absorb the volume, captured a disproportionate share of the upswing. That is a cyclical recovery in the home market, and it is a perfectly respectable thing for a capital-goods company to enjoy. It is not the same thing as a re-rating.
The margin story deserves the same treatment, because it is widely described in a way the numbers do not support. Material margin — the gross spread after raw material cost — was 43.73% in fiscal 2026, 44.34% in fiscal 2025 and 42.55% in the carve-out fiscal 2024.1 That is essentially flat, and fiscal 2026 was slightly below fiscal 2025. So the near-doubling of EBITDA margin from the fiscal 2024 base did not come from pricing power or product mix at the gross line. It came from spreading fixed costs over far more volume. Employee benefit expense rose only 6.5% (₹180.05 crore to ₹191.78 crore) while revenue rose 24.7%; depreciation was roughly flat at ₹52.37 crore; other expenses rose 13.7%.1
That is operating leverage, cleanly and completely. It is powerful — and it is symmetric. The same arithmetic that doubled the margin on the way up will halve it on the way down. A business whose margin expansion is volume-driven rather than price-driven has not proven pricing power; it has proven it owns a large fixed-cost base.
The returns metrics need one more clarification, because three different numbers circulate. The restated offer-document figures for fiscal 2026 are a return on equity of 36.80% and a return on capital employed of 40.92%.1 Return on net worth is reported at 72.95%, a much higher figure computed on a different base.1 Public financial databases show roughly 44.6% ROE and 43.8% ROCE.6 The spread comes from what sits in the denominator and whether opening, closing or average equity is used on a book that grew from ₹371.59 crore to ₹525.73 crore in a single year.1
The underlying reason returns are high, however, is real and worth understanding, because it is the best thing about this business. Capital expenditure was ₹35.83 crore in fiscal 2026 — just 2.09% of revenue — against ₹25.35 crore and ₹18.28 crore in the two prior years.1 Net working capital ran at 84 days, versus 178 for Rajoo Engineers, 138 for Mamata Machinery and 219 for Jyoti CNC Automation.1 And the balance sheet shows other current liabilities of ₹390.14 crore against ₹181.39 crore a year earlier — a doubling that, in a machinery business with a rising order book, is largely customer advances.1
Put together: Lohia builds machines using capacity it already owns, funded substantially by money its customers pay before delivery. That is why the returns look like a software company's and the capex looks like a services firm's. It is a genuinely attractive model — and it means the order book is not merely a revenue indicator. It is the funding source.
Which brings us to the caveat that sits underneath the ₹1,358.52 crore. An order book of that size equals about 79% of a full year's revenue, which sounds like excellent visibility. But orders in this industry are cancellable, and the company's own disclosure does not present the book as contracted, non-cancellable backlog. Investors should treat it as a demand signal of good quality and not as revenue already earned.
So: a very strong year, driven overwhelmingly by one country, on flat gross margins, funded by customer advances, in a business whose international arm shrank. All of it true simultaneously. And all of it printed in the offer document that the family used to sell down.
VII. The IPO: A Pure Promoter Exit
The book opened on Thursday, July 23, 2026 and closed on Monday, July 27, at a price band of ₹404 to ₹425 per share of ₹1 face value.1 The day before it opened, on July 22, the company allotted 1,15,79,133 shares to 27 anchor investors at ₹425, raising ₹492.11 crore.[^7]
The anchor book was domestic and it was institutional. Mutual funds took 73,17,695 shares worth ₹311 crore — 63.20% of the anchor allocation — across 13 schemes run by seven fund houses including ICICI Prudential, Nippon India, Kotak Mahindra, Motilal Oswal, Aditya Birla Sun Life, Tata and Canara Robeco. Life insurers took a further 14.64%, led by SBI Life at 6.10%, with Tata AIA, Kotak Mahindra Life and Edelweiss Life following. Offshore participation included Citigroup Global Markets Mauritius, Société Générale and Nomura Singapore.[^7]
The book closed subscribed 7.25 times, with bids for 10,40,88,180 shares against 1,43,52,274 on offer. Qualified institutional buyers subscribed 9.11 times, non-institutional investors 6.82 times and retail 2.77 times.7 The retail number is the telling one — modest enthusiasm from individual investors for a machinery company most of them had never heard of, against strong institutional demand.
The structure: an offer for sale of up to 2,59,31,407 shares totalling ₹1,101.29 crore at the upper band. No fresh issue. Not a rupee of primary capital.1 The promoter selling shareholders were Raj Kumar Lohia (up to 1,67,28,500 shares), Amit Kumar Lohia (9,20,187) and Gaurav Lohia (22,17,500), with promoter group seller Ritu Lohia (16,71,250) and other selling shareholders Alok Kumar Lohia (21,71,460), Anurag Lohia (11,37,610) and Anuja Lohia (10,84,900).1
One line in the offer table deserves a long look. The weighted average cost of acquisition per share for Raj Kumar Lohia was ₹0.91.1 For the other sellers it ranged from ₹0.02 to ₹0.07.1 These are essentially nil-cost positions arising from a business built over four decades and restructured through the demerger. Selling into a ₹425 book is therefore not a partial monetisation of an investment; it is the first realisation of forty-five years of accumulated enterprise value. That is neither surprising nor improper. It is simply the honest economic description of what took place, and it is worth holding in mind whenever "promoter conviction" is invoked.
Shareholding moved from 72.94% promoters plus 22.67% promoter group pre-offer — 95.61% combined — to 54.14% and 21.09% post-offer, or 75.23% for promoters and promoter group together, with public shareholders at 24.77%.1 The commonly cited post-issue promoter figure of 68.66% reflects the later reported shareholding pattern classification for July 2026, alongside domestic institutions at 17.51%, foreign institutions at 5.65% and public at 8.16% across roughly 82,000 shareholders.6 Either way, the family retains unambiguous control.
Listing day was Thursday, July 30, 2026. The stock opened at ₹461 on the NSE, an 8.47% premium to the ₹425 issue price, and at ₹460 on the BSE.2 It ran to an intraday high of ₹507.40 and was trading at ₹500.85 by late morning, roughly 17.9% above issue.2 By August 7, 2026 it had traded in a ₹531.55 to ₹555.60 range, with the 52-week band since listing running from ₹461 to ₹555.60 — meaning the stock had not, in its first week, traded below its opening print.8
On valuation: at the upper band the post-issue implied market capitalisation was ₹4,268 to ₹4,490 crore across the band.1 One sell-side assessment put the post-issue price-to-earnings multiple at 23.21 times with EV/EBITDA of 13.59 times.9 Against the fiscal 2026 peer set — Rajoo Engineers at 18.27 times, Mamata Machinery at 62.07 times, Jyoti CNC Automation at 54.60 times and LMW at 134.25 times on July 15, 2026 closing prices — Lohia was priced at a premium to the smallest peer and a substantial discount to most of the rest.1 Post-listing, the multiple sat around 28 times.8
The peer comparison flatters Lohia on operating quality and should. Its fiscal 2026 EBITDA margin of 19.53% was close to Rajoo's 20.02% and roughly double Mamata's 9.11% and LMW's 8.61%.1 Its return on capital employed of 40.92% was more than double any peer's, and its working capital cycle was the tightest of the group by a wide margin.1 On the operating metrics that matter for a machinery business, this is the best company in its listed comparable set.
The framing to carry forward is simple. Because no primary capital was raised, the IPO tells you what the family thought the business was worth in July 2026 and nothing about what management plans to build. There is no use-of-proceeds section to hold them to, no stated capacity expansion, no announced acquisition programme funded by the issue. The accountability that normally comes with a fresh issue — here is the money, here is what we will do with it, judge us — simply does not exist in this transaction.
To judge it, you have to go into the machines.
VIII. Core Business Deep Dive: The Economics of Making the Machines That Make the Bags
Walk into the Panki Industrial Estate facility in Kanpur and what you would see is a floor of circular looms in various states of assembly — steel frames the size of a small car, each one carrying hundreds of bobbin positions, being wired, tested and crated for shipment to a converter in Nigeria or Vietnam or Brazil. The installed capacity of that line is 13,800 looms a year.1 It is not glamorous. It is, in the specific sense that matters to investors, a very unusual business.
The market, sized honestly. The global woven raffia machinery market was US$1,008 million in 2024 and is projected to reach US$1,369 million by 2030, a compound growth rate of 5.2%.1 The Indian market was US$150 million in fiscal 2025, projected to reach US$242 million by fiscal 2030 at roughly 10%.1 Two things follow. First, this is a small global market — roughly a billion dollars — which is precisely why a Kanpur company could come to lead it and why no European or American industrial conglomerate has bothered to crush it. Second, India is the fast-growing sliver, expected to compound at twice the global rate, which is both the opportunity and the concentration risk.
What Lohia actually sells. Fiscal 2026 revenue split as follows: circular looms ₹571.38 crore (33.28%), tape extrusion lines ₹348.42 crore (20.30%), other machines and equipment ₹292.43 crore (17.03%), spare parts ₹194.73 crore (11.34%), tape winders ₹153.69 crore (8.95%), other sales ₹125.19 crore (7.29%), with services and other operating revenue making up the remainder.1 Machinery and equipment overall accounted for 88.16% of fiscal 2026 revenue.910
The spares line is worth isolating. ₹194.73 crore of spare parts revenue, up from ₹173.78 crore and ₹139.36 crore in the prior two years, means the annuity component grew every year — including through the demand trough when machine sales were collapsing.1 That is the installed base doing exactly what an installed base is supposed to do: providing revenue that does not depend on the customer's capex decision. Over 2,447 tape extrusion lines, 502,940 winders and 101,452 circular looms have been sold, representing 8.59 million MT of aggregate extrusion capacity in the field.1 Every one of those machines eventually needs parts.
But calibrate the enthusiasm. Spares were 11.34% of revenue in fiscal 2026 and 12.62% in fiscal 2025 — meaningful, growing, and nowhere near large enough to make this a razor-and-blades business. Roughly seven-eighths of the P&L still rises and falls with somebody's capital expenditure decision.
The geography. Products shipped to around 100 countries across fiscals 2024, 2025 and 2026, supported by four domestic sales offices, five international offices in Brazil, Russia, Thailand, the UAE and the USA, and exclusive agents in 17 countries.1 Regional revenue from manufactured and traded goods in fiscal 2026: MENA ₹209.76 crore, Asia-Pacific excluding India ₹178.09 crore, Africa ₹136.15 crore, North and South America ₹113.43 crore, the CIS ₹41.63 crore and Europe ₹29.89 crore.1 The footprint is genuinely global and genuinely emerging-market weighted. It is not a domestic supplier with an export sideline.
It is also, on fiscal 2026 evidence, not currently growing. Every major overseas region except Africa and Europe declined year over year, with North and South America falling from ₹170.67 crore to ₹113.43 crore and MENA from ₹228.78 crore to ₹209.76 crore.1
Where the demand actually comes from. The machines serve packaging for cement, fertiliser, chemicals, food grains, polymers, FIBCs and shopping bags, plus non-packaging uses in roof underlayment, tarpaulin, geotextiles, ground covers, carpet backing, ropes and twines.1 Trace the chain backwards: a farmer's harvest or a cement plant's despatch volume determines sack demand; sack demand determines converter utilisation; converter utilisation determines whether the converter buys a loom. Lohia sits three links from the end consumer. Its demand is a second derivative — the rate of change of somebody else's capacity. Second derivatives are volatile by construction. This is not a defect in the business; it is the nature of the asset class, and it is why the utilisation table swung from 21% to 40% on circular looms in two years.
How Lohia wins — tested, not asserted. Take the claimed sources of advantage one at a time.
Process power and technology know-how. The strongest claim. 127 patents across India and abroad, 251 employees in R&D representing 12.49% of a 2,010-person workforce, a 6,000 square metre DSIR-recognised R&D centre, and named proprietary technologies including Duotec extrusion, Loom Nova 6, Valvomatic, Blokomatic, LOFIL yarn lines, Prismaflex printing and a 2X Melt Filtration system.1 A patented hot air trapping device won the National Innovation Award in 2012, and in 2025 the company introduced a Circular Weaving Technology developed with SASMIRA.1 Recurring R&D spend was ₹350.04 million in fiscal 2025 against ₹21.09 million of capital R&D spend.4 This is a real engineering organisation, not a marketing claim.
Switching costs. Also real, and structurally more interesting than the patents. The combination of the training academy, the NABL-accredited testing lab, apprenticeship certification, a dedicated spare-parts division and remote support tools means that a converter who standardises on Lohia is buying an operating system, not a machine.4 The evidence is in the spares line growing through the downturn.
Scale economies. Modest. On a US$1 billion global market with a 15.4% share, Lohia's absolute scale advantage over Starlinger is not decisive, and against Chinese manufacturers operating from a far larger domestic industrial base it may run the wrong way. The company's own framing emphasises backward integration — in-house design and manufacture of inverters, controllers, motors, PCBs, sheet metal parts and CNC-machined components, plus plating, moulding, assembly and paint shops — as the source of cost advantage rather than raw volume.1 Backward integration of that depth is unusual and genuinely lowers unit cost and supplier dependence. It also raises fixed costs, which is precisely why the trough years hurt so much.
Brand and network. Present but secondary. Customers are price-sensitive converters, not brand-driven buyers.
Porter's five forces, applied. Rivalry is moderate-to-high and rising: a named premium rival with shared technical heritage, several Chinese entrants competing on price, and domestic Indian challengers. Buyer power is moderate — customers are fragmented and individually small, which helps, but they are price-sensitive and capital-constrained, which does not, and their advances fund Lohia's working capital, which cuts both ways. Supplier power is low-to-moderate; deep backward integration reduces it, though the company remains dependent on global suppliers for steel, motors, sensors and gearboxes.1 Barriers to entry are meaningful — patents, forty years of process knowledge, a global service network — but manifestly not prohibitive, since new entrants took share. Substitutes are the sharpest force: jute is a legislated substitute in India's largest bagging application, and long-run regulatory pressure on plastics is a structural headwind.
The evidence check. Here is the uncomfortable synthesis. The moat, as described, is real: the patents exist, the academy exists, the installed base exists, the returns on capital are genuinely superior to every listed peer. And that moat did not prevent two consecutive years of running the plant at a quarter of capacity while lower-priced competitors were present in the market. Fiscal 2026 is management's rebuttal. It is one year, it was overwhelmingly domestic, and it came on flat gross margins.
A moat that lets you keep the customer's spares business through a downturn but not the customer's next machine order is a moat with a specific and identifiable shape. It defends the installed base. It does not, on this evidence, defend price.
Which makes the identity of the people doing the pricing rather important.
IX. Competitive Landscape: Starlinger, Windmöller & Hölscher, and the Chinese Wave
There is a particular species of business rivalry that only occurs when the teacher and the student end up selling to the same customer. Lohia has it twice over.
Starlinger & Co. GmbH. The Austrian firm that co-founded the Kanpur venture in 1981, supplied the circular loom technology, and exited as a shareholder somewhere in the 2011–2015 window.4 Today it is named first among key players in the global woven raffia machinery market, and Lohia's own stated strategy explicitly positions its international expansion "alongside Starlinger & Co. GmbH."1 Starlinger is also, notably, a named competitor in the Indian market — it did not concede the home turf it helped create.1
The competitive logic here is asymmetric. Starlinger competes on European engineering pedigree, precision and — critically — on the sustainability and recycling side, where it has built a substantial position. Lohia competes on total delivered cost, application engineering for emerging-market conditions, and a service network built for customers in places where a European service call is expensive and slow. In a premium-tier bake-off, Starlinger probably wins on specification. In an emerging-market converter's purchase decision, Lohia's proposition is stronger. The two rarely meet head-on for the same order, which is why both can hold meaningful global share simultaneously.
Windmöller & Hölscher. The German firm that supplied tape extrusion know-how in 1984.5 W&H's centre of gravity has moved toward flexible packaging and printing equipment, and it is a formidable global player in extrusion coating and lamination. In Lohia's coating and lamination segment — strengthened by the Sundarlam acquisition in Bengaluru in 2021 — W&H is the quality benchmark.1 But this is not the segment where Lohia's revenue is concentrated, and the overlap is partial.
The Chinese wave. Yongming Machinery, Hengli Machinery and Tianfeng Plastic Machinery are named in the global competitive set, alongside Taiwan's Polystar.1 This is the more consequential threat and it is worth being precise about why.
A Chinese circular loom manufacturer is not trying to beat Lohia on weft insertion rate or on patented stretching technology. It is trying to sell an adequate machine at a price that changes the payback arithmetic for a converter in Vietnam, Egypt or Uttar Pradesh. In an up-cycle, when converters are capacity-constrained and revenue-hungry, uptime and service response dominate the decision and the incumbent wins. In a down-cycle, when converters are cash-constrained and hesitant, capex cost dominates and the challenger wins. That is precisely the pattern the fiscal 2024 and 2025 utilisation figures describe.
So the crux question for the investment case is this: does Lohia compete on total cost of ownership, or on sticker price? The company's answer, embedded across its disclosures, is total cost of ownership — the training academy that produces operators who do not wreck the machine, the spares division that keeps it running, the service network in 17 countries with exclusive agents, the backward integration that lets it control component cost.1 The evidence supporting that answer is the spares annuity that grew through the trough and the return on capital that no listed peer approaches.
The evidence against it is the trough itself. If total-cost-of-ownership selling were decisive, a two-year collapse in order intake to a fifth of capacity would not have happened. What the record actually suggests is a bifurcated market: Lohia retains customers it has already won and loses marginal new-capacity orders on price when its customers are under stress. That is a defensible position — but it makes Lohia's growth rate a function of its customers' financial health rather than of its own competitive gains, which is a materially different investment proposition from "global leader taking share."
The domestic comparables. For valuation and operating benchmarking the useful Indian names are Rajoo Engineers (fiscal 2026 revenue ₹344.25 crore, 20.02% EBITDA margin, 17.46% ROCE) and Mamata Machinery (₹233.00 crore, 9.11%, 10.62%), with LMW (₹3,207.42 crore, 8.61%, 6.34%), Jyoti CNC Automation (₹2,093.13 crore, 27.27%, 18.84%) and Windsor Machines (₹570.50 crore, 6.14%, 1.73%) rounding out the set.1 None of these serve the same end market. Rajoo and Mamata make plastics processing and packaging machinery; Jyoti makes CNC machine tools; LMW makes textile spinning machinery. They are useful for multiple and margin comparison and for nothing else.
What the comparison establishes is unambiguous: on capital efficiency and working capital discipline, Lohia is the best operator in the group. What it cannot establish is whether that superiority persists when the domestic cycle turns down again, because Lohia has no listed history through a full cycle.
For that, you have to assess the people — and their record of explaining themselves.
X. Current Management: The Lohia Family at the Controls
On January 9, 2025, at an industry event in Maharashtra, Raj Kumar Lohia was felicitated by Sanjay Savkare, the state's Cabinet Minister of Textiles, for leadership in advancing technical textile machinery in India. The same event marked the launch of the SASMIRA–Lohia Corp Circular Weaving Technology for high-strength seamless tubular geotextiles.4
It is a fair credibility data point and it should be weighted as exactly that: recognition from a state textiles ministry at a sector event, not independent evidence of strategic judgement.
Raj Kumar Lohia, Chairman and Managing Director, has been associated with the current entity since July 29, 2023 and has over 43 years of experience in manufacturing. He was previously Managing Director of the demerged company and served as an independent director on the board of J.K. Cement Ltd.1 Forty-three years means he joined the business essentially at inception. He has seen every cycle this industry has produced — the licence-raj years, liberalisation, the China shock, COVID, and the trough of fiscal 2024. Whatever else one concludes, he is not a manager who mistook fiscal 2026 for something unprecedented.
Gaurav Lohia, Whole-time Director and Chief Operating Officer, has been associated with the company since May 1, 2024 with over 20 years in manufacturing, and was previously a director of the demerged company. He was formally appointed Whole-time Director and COO with effect from April 25, 2025, approved by shareholders on May 27, 2025.14 Amit Kumar Lohia is the third promoter, selling 9,20,187 shares in the offer.1
Beneath the family sits a professional layer. Anupam Agarwal is Chief Financial Officer with over 32 years in finance including more than 31 years with the demerged company, where he served as Vice President–Finance and Accounts, responsible for budgeting, financial reporting, internal controls, risk management, ERP implementation and cost optimisation.1 Dinesh Boloor is Chief Sales Officer with 26 years of experience.1 Rajendra Kumar Arya, Whole-time Director, brings 29 years across National Aluminium, BHEL, Maruti Suzuki, Ashok Leyland and Daimler India Commercial Vehicles.1 Shikha Srivastava is Company Secretary and Compliance Officer.1
One transition is worth noting for its timing. K.G. Gupta resigned as Chief Financial Officer effective April 24, 2025, and Anupam Agarwal was appointed CFO with effect from April 25, 2025 — a same-day handover, roughly fifteen months before listing.4 The reasons are not disclosed. Agarwal is a three-decade internal veteran, so this reads as succession rather than rupture, but a CFO change immediately before an IPO is a fact investors should note and monitor rather than assume away.
Governance. The board was assembled for public markets on a specific date: five independent directors — Naresh Kumar Gupta, Keith Reddy Padmaja Reddy, Gaurav Swarup, Dinesh Kumar Mittal and Basant Seth — were all appointed on September 21, 2024, with shareholder approval on November 29, 2024.4 Basant Seth chairs the Audit Committee and brings a career including Chairman and Managing Director of Syndicate Bank, Deputy Managing Director of SIDBI, a directorship on the Central Board of State Bank of India and Public Interest Director at MCX.1 Auditors are Walker Chandiok & Co LLP together with Anil Pariek & Garg, appointed for five years at the first AGM on August 27, 2024.4 The secretarial audit for fiscal 2025 carried no qualification, reservation, adverse remark or disclaimer, and the Directors' Report records no fraud reported by auditors, no going-concern-threatening regulatory orders, and no proceedings under the Insolvency and Bankruptcy Code.4 CRISIL rated the bank facilities AA-/Stable/A1+.4
That is a clean sheet. It is also a very young one — a second annual report, from an entity two years old, with independent directors seated for six months of the year under review.
Capital allocation. The company is not entirely without a payout record, contrary to some IPO commentary: the board recommended a final dividend of ₹1.75 per ₹1 share for fiscal 2024–25, subject to member approval at the second AGM.4 On roughly 10.57 crore shares that is approximately ₹18.5 crore — paid, at that point, almost entirely to the family. There is no stated public-market dividend policy, no capital allocation framework disclosed, and no primary capital raised in the IPO to be held accountable for.
The inorganic record is the better guide, and it is disciplined in shape: Leesona in 2019 for winding technology, Sundarlam in 2021 for lamination and coating, OMGM in Italy as a joint venture for monofilament extrusion, J.J. Jenkins in 2024 for synthetic fibre and monofilament.14 Every one is adjacent to the core, none is transformational, and none appears to have been financed with balance-sheet-straining leverage — net debt to equity fell steadily from 1.06 to 0.47 to 0.23 across the three disclosed years.1 Management has stated an intention to continue expanding through mergers, acquisitions, joint ventures and technical alliances.1 With the balance sheet now nearly ungeared and ₹156.88 crore parked in current investments, the capacity to act on that is real.1
The acquisitions have not all worked, however, and one deserves specific scrutiny. The US subsidiary Leesona Corp posted a loss of ₹102.12 million in fiscal 2025, widening to ₹243.41 million in fiscal 2026, and the parent has issued a ₹413.00 million corporate guarantee on its behalf to HSBC Bank.10 The operating data corroborate the deterioration starkly: the Burlington, North Carolina winder line ran at 92.57% utilisation for the year ended December 2023, 35.43% for December 2024, and 6.14% for December 2025 — 43 units produced against 700 units of capacity. The extrusion lines at Burlington and Como ran at 16.67%.1 A skeptical investor would ask directly why a subsidiary whose losses more than doubled while its flagship line went to near-zero utilisation belongs on the balance sheet at all, and what the plan for it is. That is a fair activist question and it has not been publicly answered.
The credibility test. Applying the standard used throughout this piece — does management explain misses as candidly as it reports wins? — the record so far is thin and lopsided. The fiscal 2025 Chairman's letter, written when utilisation was in the twenties, offered no diagnosis of the demand trough, no mention of competition, and no corrective plan.4 The fiscal 2026 result was strong, and the marketing around it emphasised leadership, patents, global reach and margin expansion. Nowhere in the public materials reviewed for this piece did management address the fact that fiscal 2026's growth was entirely domestic while overseas revenue fell nearly 10%.
That is not evidence of dishonesty. It is evidence of a company that has never had to explain itself to public shareholders. The first earnings call is where that changes, and the first genuinely useful question an analyst can ask is not about the order book. It is about Burlington, and about why exports went backwards in the best year the company ever had.
XI. Beyond Raffia: Recycling and Diversification — Small Today, Worth Watching
There is a machine in Lohia's catalogue that does the opposite of everything else it makes. Where the tape extrusion line turns virgin polypropylene pellets into film, the ReclaMax turns scrap back into pellets.
ReclaMax is a single-step recycling system that converts post-industrial recyclable waste — raffia scrap, tapes, film — directly into consistent recycled pellets, eliminating intermediate processing steps.1 ReclaPro extends the concept as a cutter-compactor pelletiser aimed at film and post-consumer recycling.1 The stated ambition goes further: modular washing systems, AI-driven sorting, two-stage extrusion, PET bottle recycling and AI-enabled sorting systems, with the goal of building a complete recycling chain delivering what the company calls true polymer-to-polymer circularity.1
The strategic logic is sound and, importantly, it is adjacent rather than diversifying. Lohia's customers already generate raffia scrap as a by-product of weaving and conversion. Selling them a machine that turns their own waste back into feedstock is a natural line extension to an existing customer with an existing service relationship — the easiest sale in industrial equipment. And the regulatory tailwind is real: plastics packaging is under tightening scrutiny in most of Lohia's markets, and extended producer responsibility rules increasingly force converters to demonstrate recycled content.
The honest assessment is that it is small and unproven at scale. Recycling machines are not broken out as a separate revenue line in the disclosed product-wise revenue table; they sit within "other machines and equipment," which totalled ₹292.43 crore or 17.03% of fiscal 2026 revenue alongside coating, lamination, printing and conversion machinery.1 There is no disclosed order book for recycling, no installed base figure, and no margin profile. It is a strategic option, not a segment.
The other adjacencies follow the same pattern. High-performance fibres and monofilament — served through Leesona's high-speed take-up machines and the OMGM partnership's monofilament extrusion lines — target a global market the company sizes at US$18.8 billion in 2025 growing to over US$28 billion by 2030 at 8–10%, driven by defence, aerospace, automotive, renewable energy and medical devices.1 That is a far larger market than raffia machinery. It is also one where Lohia is a small entrant competing against established specialists, and the vehicle for it — Leesona — is the loss-making subsidiary discussed above. Conversion machinery, the LOFIL multifilament spin-draw-wind lines producing 160–200 kg per hour of medium-to-high tenacity yarn, and the Blokomatic and Valvomatic bag conversion lines are real, revenue-generating products, but they are extensions of the raffia ecosystem rather than departures from it.1
None of this should be allowed to crowd out the core. Woven raffia machinery is 88.16% of revenue, and every meaningful number in this business — utilisation, order book, margin, market share — is a raffia number.9 The optionality is worth tracking precisely because it is optionality: cheap, adjacent, aligned with regulatory direction, and currently immaterial.
That last point — regulatory direction — cuts both ways, and in India it cuts sharply.
XII. Regulatory Risk: The Jute Mandate Overhang
Every year, a committee in Delhi decides how India's grain will be packed. The decision is not economic. It is political, and it has been for nearly four decades.
The Jute Packaging Materials (Compulsory Use in Packing Commodities) Act, 1987 empowers the government to mandate that specified commodities be packed in jute. Under it, the Cabinet Committee on Economic Affairs periodically approves reservation norms; the December 8, 2023 approval mandated that 100% of food grains and 20% of sugar be packed in jute sacking bags for the jute year running July 1 to June 30.1112 The stated rationale is environmental — jute is biodegradable, natural, renewable and reusable — and industrial self-reliance under the Aatmanirbhar Bharat framing.11
The real mechanism is employment. The extension of these norms is expected to support roughly 0.4 million workers across jute mills and ancillary units and the livelihoods of nearly four million farming families.11 Those mills and those farms are concentrated in West Bengal. Jute is one of the most reliably protected industries in Indian political economy, and the mandate has been renewed year after year across governments of different parties.
For Lohia, the mechanism matters more than the headline. Food grain bagging is one of the largest single applications for woven polypropylene sacks in India. To the extent that 100% of it is legislatively reserved for jute, that demand pool is closed to Lohia's customers — and therefore to Lohia. In practice the mandate has always been diluted: shortage and exigency provisions permit synthetic substitution when jute supply cannot meet requirement, and jute capacity has historically struggled to cover the full mandated volume. That gap is where the woven PP sack lives.
The risk, precisely stated, is not that the mandate is introduced. It already exists. The risk is that the gap narrows — that jute capacity expands, that enforcement of the reservation tightens, or that the exigency clause is used more sparingly. Any of those would shrink a demand pool for Indian converters, which would reduce their capacity additions, which would reduce loom orders. Given that fiscal 2026's entire growth came from India, this is not a peripheral concern.
There is a second-order version of the same risk that is arguably larger and less discussed: general plastic-waste regulation. Lohia's machines make plastic packaging. Tightening restrictions on single-use and non-recyclable plastics, extended producer responsibility obligations, and shifting procurement preferences toward alternatives all press on the same demand pool from a different direction.9 The company's own recycling push is, in part, an attempt to convert that headwind into a product line.
There is also a genuine hedge worth noting: the company's R&D has produced patented "Smart Jute" bags described as lighter and stronger alternatives to conventional sacks while reducing polymer cost.1 Whether machinery for jute-blend or jute-replacement products can meaningfully offset a tightening of the synthetic mandate is unproven, but it indicates management is aware of the exposure.
The broader point for investors is one that generic industrials analysis usually misses. Lohia's largest single end-market application in its home country is subject to an annually renewed political decision made by a Cabinet committee weighing four million farming families in one state against the packaging economics of the rest of the country. That is a risk you cannot model, cannot hedge and cannot forecast. You can only watch for it — and note that its direction of travel has been toward more jute protection, not less.
That is one item on a risk radar with several.
XIII. Current Risk Radar
Cyclicality that compounds. The demand chain runs from crop economics, cement despatch and construction activity, through converter utilisation, to machine orders. Each link amplifies. When converter utilisation falls 10%, machine orders can fall 50%, because converters simply stop adding capacity entirely rather than adding less. The disclosed record proves the amplification: circular loom production went from 2,907 units to 5,495 units in two years, an 89% swing, while the underlying Indian raffia machinery market was projected to grow at roughly 10% a year.1 Lohia's revenue is far more volatile than its market.
Product concentration. With 88.16% of revenue from woven raffia machinery, there is no meaningful internal diversification to cushion a shock to that family.9 The catalogue is broad; the revenue is not.
Competitive and pricing pressure. Not hypothetical, and not historical either — the trough ended one year ago. The named Chinese and domestic competitors have not exited. What has changed is the cycle. If the thesis is that Lohia's fiscal 2026 recovery reflects competitive gains rather than cyclical recovery, that thesis requires evidence Lohia has not yet had the opportunity to produce.
Order book quality. ₹1,358.52 crore represents 79% of fiscal 2026 revenue, and the company's disclosures do not present it as non-cancellable contracted backlog.1 It is also, functionally, the working capital funding source given the ₹390.14 crore of other current liabilities on the balance sheet.1 A wave of cancellations would hit revenue and liquidity simultaneously.
Foreign exchange and trade. Roughly 42% of revenue is export, denominated substantially in dollars and euros, hedged through forward contracts, with fiscal 2025 standalone foreign currency inflow of ₹6,600.61 million against outflow of ₹1,383.58 million.14 The company is a structural net receiver of foreign currency and remains exposed to tariffs, trade relations and regulatory change across jurisdictions.1 It also depends on global suppliers for steel, motors, sensors and gearboxes — a two-way exposure.1
Underperforming assets. The Leesona losses and the Burlington utilisation collapse discussed earlier are the clearest candidates for activist attention, along with the ₹413.00 million corporate guarantee that keeps parent credit tied to subsidiary performance.10
Post-IPO overhang. With promoters and promoter group at roughly 75% post-offer and a demonstrated willingness to sell ₹1,101 crore at ₹425, the question of further sell-down once lock-ins expire is legitimate and unavoidable.1 Nothing prohibits it, and the family's cost base means any future sale is essentially pure realisation.
Execution risk on the margin. Fiscal 2026's 19.53% EBITDA margin is the highest in the disclosed history of this business and was achieved on flat gross margins through volume absorption.1 Sustaining it requires sustaining volume. That is a demand bet, not a cost bet.
Accounting judgement. Two items warrant attention in the first annual report as a listed company: the fiscal 2024 comparatives are carve-out reconstructions rather than filed accounts, and fiscal 2026 profit before tax of ₹265.04 crore includes an exceptional item of ₹9.42 crore whose nature is not detailed in the IPO note reviewed.1 Neither is a red flag. Both are places to look.
Set against those risks is a business that generates real cash, carries almost no net debt and earns returns no listed peer matches. Which is exactly why the bull and bear cases here are both strong.
XIV. Bull vs. Bear: The Investment Case Tested
The bull case.
Start with what is not in dispute. This is a global number-one or number-two in a defined niche, with 15.4% of a US$1 billion market and a 40.7% domestic position in the fastest-growing geography within it.1 It holds 127 patents across India and abroad, employs 251 people in R&D representing 12.49% of its workforce, and operates a DSIR-recognised research centre.1 It has an installed base of over 2,447 tape lines, 502,940 winders and 101,452 looms generating a spares line that grew every year including through a demand collapse.1 It sells to around 100 countries through five international offices and agents in 17 more.1
The financial quality is genuinely unusual. Capex of 2.09% of revenue, 84 days of net working capital against 138–219 for listed peers, net debt to EBITDA of 0.36 times, operating cash flow of ₹325.16 crore against ₹193.45 crore of profit, and a return on capital employed of 40.92% — more than double any comparable.1 A business that grows by selling machines built with capacity it already owns, financed by customer advances, is a structurally high-return business. That is not an accounting artefact; it is a business model.
Fiscal 2026 demonstrated what that model does when volume returns. Revenue up 24.7% produced EBITDA up 48.5% and profit up 64%, on essentially unchanged gross margins.1 If the domestic capex cycle has genuinely turned and the Indian market compounds at the projected 10%, the operating leverage that worked in fiscal 2026 has further to run — and there is still enormous idle capacity, with tape extrusion at 49.58% and circular looms at 39.82% utilisation even after the recovery year.1 The company does not need to spend meaningful capital to double output.
In Helmer's framework, the credible powers are process power — four decades of accumulated engineering and manufacturing know-how backed by patents and deep backward integration — and switching costs, where the training academy, accredited testing lab, apprenticeship programme and spares network embed Lohia into customers' operating capability rather than just their equipment list. Counter-positioning and network economies are absent. Cornered resource is partial at best. Scale economies are modest on a billion-dollar global market.
The bear case.
The share loss is unresolved, not historical. Two consecutive years at roughly a fifth to a third of installed capacity, with named lower-cost competitors present, is direct evidence that the moat does not defend price. Fiscal 2026 is the rebuttal, and it is one year.
And that one year does not say what it appears to say. Overseas revenue fell 9.6% in the recovery year, from ₹801.05 crore to ₹724.26 crore, while domestic revenue rose 72%.1 Every major international region except Africa and Europe declined.1 The global franchise did not grow in fiscal 2026. India did. Any thesis built on export diversification cushioning Indian cyclicality has to reckon with the fact that in the one year the company chose to list, exports were the drag.
The margin expansion carries no evidence of pricing power. Material margin was 43.73% in fiscal 2026 versus 44.34% in fiscal 2025 — slightly down.1 The entire EBITDA improvement is fixed-cost absorption, and fixed-cost absorption reverses exactly as fast as it arrives.
The IPO structure is what a skeptical investor should weight most heavily. Zero primary capital. ₹1,101 crore extracted by sellers whose weighted average cost of acquisition ranged from ₹0.02 to ₹0.91 per share, into a ₹425 book, in the fiscal year immediately following the best operating result the business has produced.1 There is no use of proceeds to hold anyone to. The transaction communicates a valuation view from the people with the most information, and that view was "sell."
The activist stress test would press five points. First: why does Leesona remain consolidated when its losses more than doubled to ₹243.41 million and its principal production line ran at 6.14% utilisation, while the parent guarantees ₹413.00 million of its bank exposure?110 Second: what exactly remains in LTS Holdings, and what commercial relationships persist between it and the listed company? Third: what is the capital allocation policy now that the balance sheet is nearly ungeared and ₹156.88 crore sits in current investments — dividends, buyback, capacity, acquisitions?1 Fourth: why does the order book's cancellability not receive fuller disclosure, given it funds working capital? Fifth: what is the specific plan to recover international revenue, and why has no public explanation of the fiscal 2026 export decline been offered?
The five-forces reading reinforces the caution. The most powerful force acting on this business is not rivalry — it is substitutes, in the specific form of a legislated jute mandate governing India's largest bagging application, renewed annually by political process. That is a force no amount of engineering excellence addresses.
Why win, why not — stated plainly.
Lohia wins from here if the Indian converter capex cycle sustains for several years, if it can hold or regain share against Chinese competition at prices that preserve the gross margin, if the spares annuity keeps compounding off a growing installed base, and if the international business returns to growth. The mechanism is real: high incremental margins on idle capacity, negative working capital funding, an entrenched service and training relationship with customers who cannot easily re-skill their workforce around a different vendor.
Lohia's case breaks if fiscal 2026 was the cycle peak. In that scenario the margin unwinds through the same operating leverage that built it, the order book proves cancellable, the domestic share gains prove to have been the incumbent absorbing an unusual capex spike, and the company's first years as a listed entity are spent explaining a decline. The burden of proof sits squarely with management, and they have had exactly one opportunity to build a track record: the year they sold.
The evidence that settles it will arrive quarterly, and it comes down to a very short list of numbers.
XV. What to Watch: The KPIs That Matter
Three numbers. Not a dashboard — three.
1. Capacity utilisation across tape extrusion lines, circular looms and tape winders.
This is the cleanest read on the business that exists, because it is the number that moved first and moved most. Tape extrusion went from 29.58% to 31.25% to 49.58% across fiscals 2024, 2025 and 2026; circular looms from 21.07% to 24.18% to 39.82%; tape winders from 21.33% to 21.02% to 32.07%.1 Utilisation leads revenue, and it leads margin by more, because the entire margin story is fixed-cost absorption. If utilisation keeps climbing toward the sixties and seventies, the operating leverage thesis is validated and the margin has room to expand further. If it stalls in the forties, fiscal 2026 was the cycle. The company disclosed this table in the offer documents; whether it continues to disclose it as a listed entity is itself a test of transparency worth watching.
2. The domestic/export revenue split — and specifically whether overseas revenue returns to growth.
Not total revenue. The split. Fiscal 2026's ₹992.74 crore domestic against ₹724.26 crore overseas represented a 72% domestic surge and a 9.6% export decline.1 The bull case requires exports to recover, because that is the only evidence available that Lohia is competing successfully against Starlinger and the Chinese manufacturers on neutral ground. India is home turf where Lohia has forty years of relationships, a training academy and a service network. Winning there proves less. If export revenue resumes growth while domestic growth normalises, the global-franchise thesis holds. If exports keep sliding while India carries the company, this is an Indian cyclical with an export legacy — a materially different asset.
3. Order book conversion, and what happens to gross margin as the book converts.
The ₹1,358.52 crore book is the forward indicator and the working capital source.1 Watch two things about it together: whether it keeps growing, and whether material margin holds near 43–44% as it converts. If the book grows while gross margin holds, Lohia is winning orders on value. If the book grows while gross margin compresses, Lohia is buying share on price — which would be a rational competitive response to Chinese pressure but would materially change the return profile of the business.
Everything else — EBITDA margin, ROCE, profit growth, market share commentary — is downstream of these three. Track them and the narrative resolves itself. The reader keeping this scorecard does not need to calculate anything; the company reports all three, and the first opportunity to check comes with the first quarterly result as a listed company.
XVI. Epilogue & Outro
As of August 10, 2026, Lohia Corp has been a listed company for eleven days.
The stock changed hands in a ₹531 to ₹556 range in the first week of August, comfortably above the ₹425 issue price and above the ₹461 opening print, on a trailing multiple of roughly 28 times.8 Roughly 82,000 shareholders now own a piece of it, alongside domestic institutions at about 17.5% and foreign institutions at about 5.7%.6 The family retains control. The first quarterly results as a public company have not yet been reported. There has never been an earnings call. Management has never given guidance, never missed guidance, never explained a miss, and never faced an analyst who could ask a follow-up question.
That is genuinely all the public-market track record that exists. Everything in this piece has been reconstructed from offer documents, one annual report of an entity two years old, and market data covering less than a fortnight.
What emerges from that reconstruction is a company more interesting than most Indian industrial listings and harder to underwrite than the IPO materials suggest. The engineering is real — 127 patents, a DSIR-recognised research centre, a two-decade product record of attacking the speed and labour constraints in its customers' production lines. The switching costs are real and unusually well-constructed, built on a training academy and accredited laboratory that no competitor appears to match. The financial model is genuinely excellent: minimal capex, negative working capital, returns on capital that no listed peer approaches, and almost no debt.
And the record also shows a business that ran its plants at a quarter of capacity for two straight years while cheaper competitors were in the market, whose recovery came entirely from one country while its international business shrank, whose margin expansion contained no evidence of pricing power, and whose owners chose that moment to sell ₹1,101 crore of stock into public hands while putting nothing into the company.
Both of those descriptions are accurate. Neither is the whole picture, and the missing evidence — the thing that would tip the balance — is a track record through a cycle as a listed entity, which by definition does not exist yet.
The larger lesson is about how to read a capital-goods IPO. Every company listing after a strong year will present that year as the beginning of something. Sometimes it is. The distinguishing evidence is rarely in the growth rate; it is in the composition. Did growth come from taking share or from a rising tide? Did margin expand because of price or because of volume? Did the sellers put money in or take money out? On Lohia, the offer documents answer all three questions, and the answers are: the tide, volume, and out.
That is not a verdict on the business, which is a good one. It is a statement about what has been proven and what has not. A genuinely world-leading Indian industrial franchise arrived in public markets on the back of a single strong year, via a transaction designed to realise value rather than deploy it. The next several quarters — utilisation, the export line, order book conversion at stable gross margin — will determine which story this turns out to be.
Kanpur has been making the machines that make the world's sacks for forty-five years. Now, for the first time, it has to explain itself every ninety days.
References
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Lohia Corp Limited — IPO Note, Axis Capital, July 2026 ↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩
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Lohia Corp Shares List at Premium, Climb Nearly 18% Above IPO Price on Debut — India Infoline, 2026-07-30 ↩↩↩
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Lohia Corp Limited — Annual Report 2024-25 ↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩↩
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Lohia Corp IPO ends with 7.25 times subscription — Business Standard, 2026-07-28 ↩
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LCL Share Price — Lohia Corp Ltd Stock Price Live NSE/BSE, blinkX ↩↩↩
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Lohia Corp IPO Review, GMP: Apply or Avoid? — INDmoney ↩↩↩↩↩
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Lohia Corp IPO (23-27 July) Analysis — Equity Research India ↩↩↩↩
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India mandates packaging of 100% foodgrains, 20% sugar in jute bags — Packaging Gateway ↩↩↩
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Cabinet Committee on Economic Affairs approves jute packaging norms for foodgrains, sugar — ANI, 2023-12-08 ↩
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