HD Fire IPO: a niche business with a demanding price tag?

HD Fire Protect's ₹712.31 crore IPO is entirely an offer for sale. At the upper price band of ₹271 per share, the company is valued at about ₹4,749 crore.SummaryWith no direct listed Indian peer, investors must weigh HD Fire's competitive advantages against cash generation and project dependence.Gift this articleCheck your portfolioThis is a Mint Premium article gifted to you.Subscribe to enjoy similar stories.

HD Fire Protect has spent decades winning approval to supply equipment that protects refineries, factories and other critical facilities from fire. Its next test is convincing investors that those credentials justify its IPO valuation.

The ₹712.31 crore offering, priced at ₹258–271 per share, is an offer for sale only. At the upper end, investors would pay 40.7 times its FY26 earnings, for strong profitability and established customer relationships, alongside exposure to project spending and slower cash conversion.

Here are six questions to assess whether the business justifies its price.

HD Fire manufactures water-, foam- and gas-based fire-protection equipment for facilities including refineries, warehouses and data centres. It does not make conventional fire extinguishers.

Certifications create a barrier to entry. As of September 2026, it held 21 UL Listed and 87 FM Approved certifications—the highest among Indian fire-protection-equipment-focused peers, according to its prospectus.

Manufacturers also need approvals from end-users and project consultants. “It has taken us several years,” Miheer Ghotikar, whole-time director of HD Fire Protect, told Mint, describing its Saudi Aramco’s empanelment process. “After that, they audited our facility, and then we were given that approval.”

The company uses both outsourcing and in-house manufacturing to scale. Contract-manufactured products contributed 36.71% of revenue in FY26, up from 31.13% in FY24, limiting the need to build capacity but increasing supplier dependence. Within its own factories, room for growth varies: water-spray nozzle capacity was 94.1% utilised, while foam equipment and suppression systems operated at 63.4%, leaving more scope to increase production.

Repeat customers contributed 85.2% of FY26 product revenue. Customers associated with HD Fire for over five years accounted for 54.4%.

“Most clients don’t switch or change brands overnight,” Ghotikar said.

Much of the business comes through system integrators and engineering, procurement and construction contractors, who return when they win new projects.

Customer loyalty, however, does not guarantee recurring revenue. HD Fire generally works through purchase orders rather than long-term volume commitments.

Ratiraj Tibrewal, chief executive officer of Choice Capital Advisor, said certifications and vendor approvals support retention, but repeat buying largely reflects new projects rather than equipment replacement.

Revenue rose from ₹372.95 crore in FY24 to ₹489.28 crore in FY26, posting a compound annual growth rate of 14.54%. Operating Ebitda (earnings before interest, taxes, depreciation, and amortization) and net profit grew at 18.79% and 15.25%, respectively.

The company’s median return on equity (RoE) and return on capital employed (RoCE) stood at 29.63% and 39.63%, respectively, over FY24–FY26.