HD Fire Protect IPO

About HD Fire Protect Ltd IPO

The IPO of HD Fire Protect Ltd comprises entirely of an offer for sale (OFS), with no fresh issue component. The offer for sale (OFS) entails the sale of 2,62,84,500 shares (262.845 lakh shares). The entire OFS sale will be done by the promoters; Harish Narshi Dharamshi and Kusum Harish Dharamshi. It will be a 100% book-built issue. The price band and the IPO dates are yet to be announced.

The IPO commences on TBA and closes on TBA. The allotment of shares will take place on TBA. The credit of shares to the demat account will take place on TBA. The initiation of refunds will take place on TBA. The listing of shares will take place on TBA.

HD Fire Protect Ltd is a manufacturer and supplier of fire protection equipment. Their product portfolio includes spanning water, foam, as well as gas-based fire suppression systems. HD Fire Protect Ltd is the second largest manufacturer of fire protection equipment in India, as per CRISIL report. They are also the largest exporter of fire protection equipment from India, with an export market across 90 countries. Their product portfolio is divided into 8 categories viz., sprinklers, deluge valves, foam equipment, monitor nozzles, system valves, water spray nozzles, custom engineered systems, and gas suppression.

Objectives of HD Fire Protect Ltd IPO

Since this is an offer for sale, there will be no fresh funds coming into the company from the IPO. The Offer For Sale (OFS) is intended to:

• Enhance the public image of the company
  
• Get the company listed on the stock exchanges to provide liquidity to shareholders
  
• To offer a more market-driven valuation-based pricing of shares of the company
  

Industry Outlook

The National Building Code (NBC-2016) forms the basic technical reference for the fire safety business. Each state in India also has its unique fire protection laws which need to be adhered to. The use of fire equipment is based on the type of fire. Fires are classified from Class-A to Class-F, with a different fire safety and fire suppression approach recommended for each of these types of fires. Broadly, the fire protection systems are classified into fire detection systems and fire suppression systems.

Fire detectors take the form of smoke detectors, flame detectors, heat detectors, or fire alarm control panels. The fire suppression is of 3 types. Water based fire suppression systems are normally used for Class-A fires, which involve ordinary combustible material. Gas-based suppression systems are generally used for Class-B and Class-C fires in industrial and commercial establishments, where equipment safety is the key. Foam based suppression is used in high-risk areas.

The global fire protection market is estimated to grow at a CAGR of around 7.0% between 2024 and 2029. The market size of the fire protection demand is currently $58 billion, which is slated to grow to $85 billion by year 2029. Indian fire protection market is expected to grow at 12.0% in the next 5 years. The big growth is likely in the domestic fire protection market as India lags in per-capita spend on fire protection. In India, about 42% of the end use market is commercial, 37% is industrial, and the balance 21% of the fire protection market is residential.

HD Fire Protect Company Information

HD Fire Protect Ltd is India’s second largest fire protection player (CRISIL report). It has two manufacturing facilities located at Jalgaon and in Thane in Maharashtra. The company currently derives 63.8% of its annual revenues from the domestic market, while the balance 36.2% revenues come from the export market. Key export destinations for HD Fire Protect Ltd are UAE, Saudi Arabia, Brazil, Turkey, Malaysia, and Indonesia.

The company enjoys strong financials. It has latest year EBITDA margins of 31.9% and ROE of 29.6%. The company services over 2,100 customers currently. The company has been in this business for over 35 years and currently exports to over 90 countries. The company offers fire protection solutions across water, foam, and gas-based suppression systems to its customers.

Strengths of HD Fire Protect Ltd

• Since this is an approval-based business, entry barriers tend to be high and that works to the advantage of the company.
• The company has a wide array of fire protection products as part of its SKU, which allows them to cater simultaneously to a range of customers.
• It has consistently maintained EBITDA margins and ROE at high levels. Its diverse product mix also ensures a de-risking of its business model.
• The top 10 customers of the company account for 21% of the revenues, and they have been sticky customers of the company for a long time. It gets over 86% revenues from repeat customers.
• In terms of capacity utilization across products, the company has managed to sustain capacity utilization at above 75% in most of its principal contributors of revenue.

Risks of HD Fire Protect Ltd IPO

• The business is a closely regulated business globally and the penalties for non-performance of equipment can be quite high. That remains a risk.
• Quite often, the company does not have control over the installation as it is done by third parties and that adds to the risk of operational performance.
• The business of fire safety is vulnerable to changes in government policy. Quite often such changes in policy can entail a huge cost for the companies.
• This is a business with several established players so there is always the possibility that they may use pricing pressure as a strategy.

Anchor Investor Bidding Date

TBA

IPO Registrar and Book Running Lead Managers

• IPO Registrar: MUFG Intime India Private Ltd
• Book Running Lead Managers: Ambit, Anand Rathi, and IIFL Capital

HD Fire Protect Business Model

The business model of the company is providing firefighting solutions to domestic and global clients across the entire spectrum of water-based, foam-based, and gas-based suppression systems. This is a strong well-regulated business with huge growth potential. Hence, strong regulatory compliance is the key, something the company has been doing well over the years.

HD Fire Protect Growth Trajectory

Between FY23 and FY25, the operating revenues of HD Fire Protect Ltd have grown from ₹324.0 crore to ₹432.80 crore, an accretion of 33.58% over 2 years. During the same period, the return on net worth (RONW) moved from 25.29% to 27.67%. The company has a fixed asset turnover ratio of 5.18X. Its PAT margins have been above 21% in last 3 years.

HD Fire Protect Market Position

As of March 31, 2025, HD Fire Protect Ltd has the advantage of a very diversified product mix across the fire safety equipment and solutions space. It has a fairly even mix between the domestic market and the exports market.

According to the CRISIL Report, they were the second-largest manufacturer of fire protection equipment and systems in India in terms of operating income (revenue from operations) in Fiscal 2024 and the largest exporter by value (equipment) in Fiscal 2024.

They export to more than 90 countries as of Fiscal 2025. With more than three decades of experience, the company has established themselves as a globally recognized and reliable brand.

How to Check Allotment Status of HD Fire Protect Ltd IPO?

1. Visit the Registrar’s Website

• Visit the website of MUFG Intime India Private Ltd
• Choose the name of the company from ‘Select Company’ dropdown
• Enter any of these - PAN Number, Application Number, DP/Client ID/ Bank A/C-IFSC
• Click on Submit to check the status

2. Check on the National Stock Exchange Website

The National Stock Exchange (NSE) website has an IPO bid verification module. You can use it to check the allotment status of HD Fire Protect Ltd IPO. Go to the NSE website and find the 'Invest' tab. Click on 'Verify IPO Bids' under 'Resources & Tools'.

On the NSE IPO bid verification page, enter:

• Company name from dropdown
  
• Application number
  
• PAN
  

Then click 'Submit' to know the allotment status.

3. Check on the BSE Website

The Bombay Stock Exchange (BSE) also has an IPO allotment status page. Go to the BSE website and find the 'Investors' tab. Under 'Investors', click on 'IPO'. This will take you to the IPO allotment status page. On the BSE IPO page, follow these steps:

• Select 'Equity' from the dropdown menu
  
• Choose 'HD Fire Protect Ltd' in the next dropdown
  
• Enter your application number
  
• Enter your PAN
  
• Click 'Search’ to know allotment status
  

How to Apply for the HD Fire Protect Ltd IPO?

To apply for this IPO:

• Log in to your Kotak Neo Demat account: Log in to your Demat account to access IPO investments. Next, select the current IPO section.
  
• Specify IPO details: Enter the number of lots and the price you wish to apply for.
  
• Enter UPI ID: After entering your UPI ID, click submit. This will place your bid with the exchange.
  
• Mandate Notification: Your UPI app will receive a mandate notification to block funds.
  
• Approve Request: Your funds will be blocked once you approve the mandate request on your UPI.