Gabion Technologies India IPO Analysis: Should You Apply or Not?

As India's infrastructure demand surges, Gabion Technologies stands as an integrated manufacturer-contractor serving roads, railways, and landslide-prone regions.

Let’s explore this upcoming IPO further:

Gabion Technologies India's share price will be finalized post-allotment, while grey market cues through the Gabion Technologies India's IPO GMP will likely reflect market sentiment closer to listing.

The Industry Backdrop: India’s Gabion Industry

The Indian gabion industry is a niche but fast-growing segment within infrastructure and geotechnical engineering. Gabions—wire mesh cages filled with stones—are widely used for slope protection, river training, erosion control, highways, railways, and mining projects. Demand is driven by higher infrastructure spending, increased focus on climate-resilient construction, flood control projects, and expansion of road & rail networks.

The Indian gabion market, valued at $16.23M in Fy24, is expected to grow at a CAGR of 11.8%, reaching $38M by Fy32. Growth drivers involve a rise in infrastructure expansion along with a sustainable construction push.

In the Asia-Pacific region, India is well-positioned due to its high infrastructure investment and growing interest in sustainable construction practices. Government initiatives for infra-resilience, especially in flood-prone areas, further create the demand for gabion solutions.

Incorporated in 2008, Gabion Technologies India is engaged in the manufacturing of Gabions, protection netting, and geosynthetic materials. The company is also involved in trading and the installation of its products. 

With headquarters in New Delhi and a manufacturing facility in Himachal Pradesh, Gabion operates an integrated business model combining manufacturing with EPC services, enabling it to deliver end-to-end solutions for civil engineering and environmental protection projects. 

GTI serves government authorities, major infrastructure contractors, and private clients across roads, railways, airports, energy, mining, and defence sectors. Key clientele includes NTPC, L&T, Reliance Industries, NDMC, and other Railway companies & road contractors.

Let’s understand the business verticals the company operates in:

1. Manufacturing- Involves the manufacturing of Gabions & related products such as Flexible geogrids, PP Rope, Mesh gabions, Sach Gabions, etc. 

*The majority of revenue (57% in Fy25) comes from this category only.

2. Trading- This involves supplying auxiliary geosynthetic products that are not manufactured in-house, but are essential for the customer projects. It includes products such as Geotextiles, Geomembrane, Drainage composites, etc.

*The topline contribution of this segment was 9.5% in Fy25.

3. Services- The service vertical acts as a high-margin segment, which involves delivering end-to-end EPC execution for gabion & geotechnical solutions. Core offerings include seismic-resilient designs and the construction of slope stabilization systems.

*The topline contribution of this segment was 40.5% in Fy25.

(Segment-wise Revenue %)

What is the Raw Material Used?

Gabion making involves the use of high-tensile steel wires, which constitutes 85%-90% of the Gabion products manufactured.  The company sources primarily from Kamala Rolling Mills Pvt Ltd, which is the key supplier, and is supplemented by major producers like Vizag Steel and Tata Steel. 

The top-5 suppliers account for around 80% of the total supply, indicating a moderate level of supplier concentration.

Coming to the pricing side, steel witnessed a surge in prices post covid-19 pandemic. However, from 2023 onwards, the prices have generally trended downwards as of now, but remain elevated compared to pre-pandemic levels.

Capacity: How Much Can Gabion Technologies Really Make?

The company has 5 gabion production lines, denoted by ‘DT Machines’, located in Sirmaur, Himachal Pradesh. 

While the company also manufactures related goods such as Mesh Netting, Flexible Geogrids and Rope Gabions, it must be noted that the given data is for Gabion production only.

Over the years, it can be observed that the company has been marginally increasing its overall capacity utilisation, keeping it in a similar range over the years. 

In terms of utilisation, Gabion Technologies has a slight room for an increase in utilisation and will be required to increase its capacity base in the coming time.

(It must also be noted that out of the IPO proceeds, the company will be using up to Rs 1.06Cr for CAPEX.

Primary led by the Sarda family, the promoters of the company include Mr Madhusudan Sarda & Mrs Urvashi Sarda as MD & whole-time director respectively. The promoters have more than 4 decades of combined experience in Gabion manufacturing. The collective leadership and profound industry have driven both innovation and excellence in the making of the products.

While 3 out of 6 board members are independent directors, the governance ensures quality as independent directors lead the audit and remuneration committees. 

From a control standpoint, the promoters hold a dominant 100% stake pre-issue. Post-IPO, this stake will dilute to 73.48%, but promoter influence will remain firmly intact, given their high base ownership and board control.

Financial Performance 

Topline has given a moderate growth at 12.8% CAGR from FY23 to FY25. The revenue in Fy25 has decreased 4% due to a delay in revenue recognition caused by client-side project constraints. 

However, on further analysis, it was observed that the revenue delay was around 3cr-4cr only, showcasing a negligible revenue growth overall. 

Margins jumped sharply, with EBITDA margin climbing from 8.1% in FY23 to 14.9% in FY25, and hitting 17.8% in the 8M FY25. That’s a big shift toward higher-value formulations and better cost control.

PAT margin improved moderately over the past years — from 4.3% (FY23) to 7.1% (8M FY25) — showing the operating leverage finally kicking in. The CFO has been positive, while the working capital days have risen sharply to 138 days in FY25 from 62 days in FY23

D/E ratio, despite being high, has shown significant improvement over the years, ranging from 3.1x in FY23 to 1.9x in 8MFY25. This signals lower leverage and improved cash generation.

ROE and ROCE stand at 30.1% and 19.2%, respectively. The financials witness a surge in ROE & ROCE, when compared to FY23, placing Gabion Technologies above the listed peers. The company has also maintained its current ratio well over the years at around 1.2.

Gabion is a niche business. For comparison, not many listed entities exist. While the SRM contractor is the only peer provided by the company, the Gabion industry is highly fragmented and unorganised.

On the basis of peer analysis, it can be said that Gabion Technologies has an average quality of financials. The EBITDA & PAT margins are 15% and 7.9%, respectively. 

The return ratios of the company are in the industrial range, with ROE & ROCE at 30.1% & 19.2%, respectively.

In terms of valuation, Gabion Technologies India lies in the fair range with a P/E ratio at 17x, while the EV/EBITDA stands at 10.7x.  However, it must be noted that the company has slightly higher borrowings, with a D/E ratio of 1.98.

Overall, in terms of margins and valuation, when compared to peers, it can be said that the company has a moderate level of financials, requiring focused efforts by the management. 

IPO Objectives

The company will be using the proceeds for:

• Funding the Capital expenditure & Working capital requirements of the company.

• Repayment/prepayment, in full or part, of all or certain outstanding borrowings

• General Corporate Purposes

Overall, the issue aims to strengthen Gabion’s manufacturing capacity & day-to-day business activities while improving its financial flexibility. The combination of expansion and deleveraging positions the company for more sustainable future growth.

At Alpha Venture X Fund, we assess opportunities through our LMVT framework — Leadership, Moat, Valuation, and Tailwinds — enabling us to identify scalable businesses with durable fundamentals.

Leadership: Founder-led with strong industrial experience and equity retention, ensuring aligned execution and focus on scaling the refurbishment business.

Moat: Despite having in-house manufacturing, the company lacks a moat since Gabion is a commoditised business. Putting it at risk in terms of expansion. 

Tailwinds: Rise in infra expenditure along with mitigation for frequent natural disasters.

Valuation: The valuation is in the fair range in terms of PE at 17x; the EV/EBITDA ratio is also in the fair industrial range at 10.7x. 

Bottom Line: Gabion Technologies has a moderate level of revenue growth backed by high debt. The company lacks a moat, while the industry is competitive with low entry barriers. The valuation is also not attractive, being in a fair range. Gabion Technologies India is not a buy for investment purposes.