Tempsens Instruments (India) Limited IPO Analysis, 117-Checkpoint Due Diligence & Valuation Dossier

Issue Size ₹650.00 Cr

Price Band ₹285 - ₹300

Lot Size / Min Inv. 50 shares

Estimated Market Cap ₹2,514.98 Cr

Anchor Allocation ₹195.00 Cr (30.0% of Issue)

Offering Dates 20 Aug 2026 - 24 Aug 2026

FAST-ORIENTATION TRIAGE

At a Glance: Fast-Orientation Triage

Mainboard or SME issue?

OK

Mainboard issue (SEBI ICDR Reg 6(1))

Listing on BSE and NSE. Offer size ₹95.00 cr Fresh Issue + 18,500,000 shares OFS (~₹555.00 cr at ₹300). p.1, 72

Can you explain what the company does in one plain sentence?

OK

Designs and manufactures customized temperature sensors (thermocouples, RTDs, pyrometers), industrial electric heating solutions, and specialized cables.

India's largest manufacturer of contact & non-contact temperature sensors (F&S Report). p.1, 145, 256

Total issue size and post-issue market cap?

OK

Total offer ₹650.00 cr (Fresh ₹95.00 cr + OFS ₹555.00 cr at ₹300); post-issue mcap ₹2,514.98 cr (implied P/E 36.01x FY26 EPS ₹8.33).

Post-issue paid-up equity: 83,832,692 shares of ₹4 each at issue price of ₹300. p.1, 72, 145

Fresh issue vs OFS - what's the split?

OK

₹95.00 cr Fresh Issue (14.62% of offer) vs 18,500,000 shares OFS (85.38% of offer / ₹555.00 cr).

Heavily OFS-dominated issue; 85.4% of total proceeds go to selling shareholders. p.1, 72, 128

Who is selling in the OFS - promoter, PE, or both?

OK

Promoter Group (Amit, Puneet, CP Talesara) and other shareholders (Ankit Talesara, NK Pande) selling 18.50 mn shares at WACA of ₹Nil to ₹0.06.

Selling shareholders realize huge markup (~5,000x to infinite gain) over near-zero acquisition cost. p.1, 128

Is the company profitable, or loss-making?

OK

Yes, profitable and steadily growing (Revenue ₹444.88 cr, 27.23% CAGR; PAT ₹71.07 cr, 31.79% CAGR; EBITDA margin 24.83% in FY26).

FY26 ROCE is 21.61%, Adjusted ROE is 20.70%, and cumulative 3-year CFO is positive at ₹133.26 cr. p.74, 147

Any headline red flag in the first 10 risk factors?

OK

Long working capital cycle (210 NWC days), customer sector cyclicality (metals/petrochem 41%), and geographical concentration (10 of 15 plants in Udaipur).

Customer concentration is low (Top 10 = 18.59%), but high inventory holding (170 days) ties up capital. p.22, 25, 148

Auditor qualification or 'emphasis of matter'?

OK

No qualifications or emphasis of matter in Walker Chandiok & Co LLP examination report (clean unmodified report).

Walker Chandiok appointed statutory auditor on Sept 23, 2025 following joint tenure with Bansi Lal Shah & Co. p.83, 364

Any criminal case / SEBI-RBI action against promoters?

FLAG

No criminal convictions or SEBI/RBI strictures. One private criminal complaint by ex-employee against promoters (service dispute).

Durga Shankar Paliwal filed criminal petition in Udaipur District Court alleging lack of internal action. p.508

IPO P/E vs the peers listed in 'Basis for Offer Price'?

OK

At ₹300 issue price, FY26 P/E is 36.01x (Diluted EPS ₹8.33) and 32.33x Adjusted EPS; no directly listed identical peers in India per DRHP.

Thermal engineering peers globally (Watlow/WIKA unlisted; Yokogawa/Honeywell diversified MNCs); domestic industrial cable peers trade at 35-50x. p.146, 150

Is the use of fresh-issue money clearly growth-oriented?

OK

Partially: ₹55.00 cr (57.89% of fresh issue) for debt repayment, ₹18.13 cr (19.09%) for capex in heating & cables, balance for GCP.

Capex adds 7.56% heating and 11.76% cable capacity; debt reduction will save ~₹5-6 cr annual interest. p.129, 134

Is this within your circle of competence to judge?

OK

Yes, industrial B2B precision engineering and thermal instrumentation with clear gross margins, operating metrics, and capacity data.

Standard capital goods and industrial component manufacturing economics driven by MRO demand, capex cycles, and indigenisation.

LAYER 1 • STORY & POSITIONING

What The Company Does: Operational & Strategic Architecture

Tempsens Instruments (India) Limited designs, manufactures, and calibrates precision temperature sensors (thermocouples, RTDs, pyrometers, thermal imagers), industrial electric process heaters, and specialized instrumentation cables for heavy process industries including metals, petrochemicals, power, glass, and defence.

#	Checkpoint	Your Finding (Prospectus Data)	Status	Page Ref
1	What does the company do, in one plain sentence?	Tempsens Instruments is an integrated thermal engineering solutions provider that designs and manufactures customized temperature sensors, industrial electric heaters, and specialized cables for process industries.	OK	Our Business, p.145, 256
Where in DRHP: Cover, 'Our Business', Industry Overview Why It Matters: If you can't say it simply, neither can the company - and that's telling. Benchmark / Red Flag Trigger: Unexplainable model = step back Exact Citation: Our Business, p.145, 256
2	Operating history & year of incorporation	Incorporated in September 1990 (35+ years of operating history); converted to public limited company in August 2025.	OK	History and Corporate Matters, p.312
Where in DRHP: 'History and Corporate Matters' Why It Matters: A long, consistent track record beats a recently assembled roll-up. Benchmark / Red Flag Trigger: <3 yrs real operating history = caution Exact Citation: History and Corporate Matters, p.312
3	Industry / sub-sector & position in the value chain	Industrial thermal engineering, process instrumentation, and specialized cables. Operates across entire value chain: R&D -> casting & wire drawing -> sensor/heater fabrication -> calibration labs.	OK	Industry Overview, p.163, 256
Where in DRHP: 'Industry Overview' Why It Matters: Defines the correct peer set and the normal margin/return profile. Benchmark / Red Flag Trigger: - Exact Citation: Industry Overview, p.163, 256
4	Stated competitive strengths - real or generic?	Real competitive moats: #1 market position in temperature sensors in India, full backward integration (MI cables, alloy wire drawing), NABL/DAkkS accredited calibration labs, and 12 registered Indian patents.	OK	Our Strengths, p.258-265
Where in DRHP: 'Our Strengths' Why It Matters: 'Experienced promoters, quality focus' is boilerplate; specifics are real moats. Benchmark / Red Flag Trigger: Only generic strengths = weak moat Exact Citation: Our Strengths, p.258-265
5	Stated growth strategy - concrete or aspirational?	Concrete expansion strategy: expanding Unit IV and VI for heating/cables, scaling overseas subsidiaries (Germany, Poland, UAE, Korea, Indonesia), and growing export reach from 1,258 mn to new global OEMs.	OK	Our Strategies, p.265-268; Objects, p.129
Where in DRHP: 'Our Strategies' Why It Matters: Fundable, specific plans beat vague ambition. Benchmark / Red Flag Trigger: Vague strategy = discount the story Exact Citation: Our Strategies, p.265-268; Objects, p.129
6	Industry tailwinds vs headwinds	Tailwinds: industrial automation, Make in India import substitution, nuclear & defence capex, EV battery thermal management. Headwinds: global trade barriers, raw material price volatility, cyclical client capex.	OK	Industry Overview, p.163-175, 190
Where in DRHP: 'Industry Overview', MD&A Why It Matters: Structural growth vs a flat/declining or cyclical-peak market. Benchmark / Red Flag Trigger: Declining/flat industry = headwind Exact Citation: Industry Overview, p.163-175, 190
7	Who commissioned the industry report?	Industry report exclusively commissioned and paid for by the company from Frost & Sullivan (India) Private Limited ('F&S Report' dated August 6, 2026).	Watch	Industry Overview, p.163; Risk Factors #42, p.50
Where in DRHP: 'Industry Overview' footnotes Why It Matters: Company-paid reports (e.g. CRISIL/F&S) skew optimistic - discount accordingly. Benchmark / Red Flag Trigger: Always company-commissioned Exact Citation: Industry Overview, p.163; Risk Factors #42, p.50
8	Is the TAM / market-size claim credible?	TAM claims appear credible: Indian temperature sensor market projected at ₹28.80 bn (₹2,880 cr) by FY31 (CAGR 8.9%); global industrial heating market USD 13.2 bn in CY25. Tempsens FY26 revenue is ₹444.88 cr.	OK	Industry Overview, p.173, 181
Where in DRHP: 'Industry Overview' Why It Matters: Sanity-check the addressable market against the company's actual revenue. Benchmark / Red Flag Trigger: Implausibly large TAM = puffery Exact Citation: Industry Overview, p.173, 181
9	Market share and its trend	Largest manufacturer of contact & non-contact temperature sensors in India by revenue; only Indian manufacturer of fibre optic temperature sensors; one of the largest electrical heater makers (316k+ units capacity).	OK	Industry Overview, p.145, 181, 256
Where in DRHP: Industry / Business Why It Matters: Share gains signal real competitiveness; losses signal pressure. Benchmark / Red Flag Trigger: Losing share = flag Exact Citation: Industry Overview, p.145, 181, 256
10	Key competitors named	Global & domestic competitors: Endress+Hauser, WIKA Instruments, OMEGA Engineering, Emerson Rosemount, Honeywell, Watlow Electric, Raychem RPG, KEI Industries, Polycab (in specialty cables).	OK	Industry Overview, p.180, 204, 250
Where in DRHP: 'Competition', Basis for Offer Price Why It Matters: Tells you the genuine peer set for the valuation comparison later. Benchmark / Red Flag Trigger: - Exact Citation: Industry Overview, p.180, 204, 250

LAYER 2 • ISSUE STRUCTURE & OBJECTS

The IPO Itself: Capital Allocation & Objects Rupee Breakdown

The ₹650.00 cr IPO comprises a ₹95.00 cr Fresh Issue and an Offer for Sale of 18,500,000 equity shares (~₹555.00 cr at the issue price of ₹300). Primary proceeds will prepay ₹55.00 cr of borrowings and fund ₹18.13 cr of capacity expansion in electrical heating and specialized cables.

Offering Structure & Tranche Breakup

Offering Parameter / Tranche	Mandate & Allocation	Value & Scale	Strategic Context & Terms
Fresh Issue (Primary Capital)	Growth capital directly reaching balance sheet	₹650.00 Cr	Primary equity expansion funding capex, working capital & debt
Offer for Sale (OFS Liquidations)	Secondary liquidity for existing promoters & early funds	OFS Dilution Tranche	Proceeds go entirely to selling shareholders; zero reaches company
Gross Total Issue Size	Aggregate offering scale at upper price band	₹650.00 Cr	Total book-building size
Anchor Investor Allocation	Reserved institutional QIB tranche	₹195.00 Cr (30.0% of Issue)	Anchor lock-in: 50% for 30 days, 50% for 90 days post-listing
Pre-IPO WACA Benchmark	Weighted average cost of acquisition for promoters	Disclosed in Basis for Issue Price	Benchmark for pricing fairness and insider multiple markup

Capital Allocation & Objects of the Issue

Object of Offer / Purpose	Allocated Amount	% Share	Execution Timeline
Debt Deleveraging (Prepayment of borrowings)	₹55.00 Cr	55.0%	Scheduled repayment of term debt
Unit IV & Unit VI Plant & Machinery Capex	₹18.13 Cr	18.1%	Specialized cable & heating elements
General Corporate Purposes (GCP)	₹23.75 Cr	23.8%	Working capital & operations
Total Fresh Growth Capital	₹100.00 Cr	100.0%	Balance Sheet Inflow

#	Checkpoint	Your Finding (Prospectus Data)	Status	Page Ref
11	Mainboard or SME issue?	Mainboard public issue under SEBI ICDR Regulation 6(1), proposed to list on BSE and NSE.	OK	Cover page, p.1; Offer Structure, p.533
Where in DRHP: Cover page Why It Matters: SME = thinner disclosure, lower liquidity, higher risk. Benchmark / Red Flag Trigger: SME = extra caution Exact Citation: Cover page, p.1; Offer Structure, p.533
12	Total issue size (Rs cr)	Total issue size is ₹650.00 cr at issue price of ₹300 (Fresh Issue ₹95.00 cr + OFS 18,500,000 shares worth ₹555.00 cr).	OK	The Offer, p.1, 72
Where in DRHP: Cover page / 'The Offer' Why It Matters: Basic sizing of the raise. Benchmark / Red Flag Trigger: - Exact Citation: The Offer, p.1, 72
13	Fresh issue amount (Rs cr)	₹95.00 cr (aggregating up to ₹950.00 million).	OK	Objects of the Offer, p.1, 128
Where in DRHP: 'The Offer' Why It Matters: Only the fresh issue brings new money into the company. Benchmark / Red Flag Trigger: - Exact Citation: Objects of the Offer, p.1, 128
14	OFS amount (Rs cr)	18,500,000 Equity Shares aggregating up to ₹555.00 cr at issue price of ₹300.	OK	The Offer, p.1, 72
Where in DRHP: 'The Offer' Why It Matters: OFS proceeds go to selling shareholders, not the business. Benchmark / Red Flag Trigger: - Exact Citation: The Offer, p.1, 72
15	Fresh : OFS ratio	Fresh Issue : OFS = 14.62% : 85.38% (Fresh ₹95.00 cr vs OFS ₹555.00 cr). Heavily OFS-dominated issue.	Watch	Objects of the Offer, p.1, 128
Where in DRHP: 'The Offer' Why It Matters: A heavy OFS tilt means the IPO is mostly an exit. Benchmark / Red Flag Trigger: OFS >70% + tiny fresh = flag Exact Citation: Objects of the Offer, p.1, 128
16	Who is selling in the OFS?	Promoter Group: Amit Talesara (4.815 mn shares), Puneet Talesara (1.294 mn shares), CP Talesara (3.788 mn shares); Others: Ankit Talesara (3.788 mn shares), NK Pande (4.815 mn shares). No PE funds.	Watch	Details of OFS, p.1, 128
Where in DRHP: 'The Offer' / Selling Shareholders Why It Matters: Promoter exit and PE exit carry very different signals. Benchmark / Red Flag Trigger: Large promoter sell-down = flag Exact Citation: Details of OFS, p.1, 128
17	How much does the COMPANY actually receive?	Net Proceeds = ₹95.00 cr minus company's portion of Offer-related expenses.	OK	Objects of the Offer, p.128, 129
Where in DRHP: Fresh issue minus issue expenses Why It Matters: This is the real fuel for growth - often far less than the headline. Benchmark / Red Flag Trigger: - Exact Citation: Objects of the Offer, p.128, 129
18	Objects: capex - amount & specificity	₹18.13 cr (₹181.34 mn) earmarked for capital expenditure in Unit VI (electrical heating) and Unit IV (specialized cables): ₹11.05 cr machinery + ₹7.08 cr civil works.	OK	Objects of the Offer, p.129, 131
Where in DRHP: 'Objects of the Offer' Why It Matters: Specific, costed capex is genuine growth spending. Benchmark / Red Flag Trigger: Vague/uncosted capex = flag Exact Citation: Objects of the Offer, p.129, 131
19	Objects: debt repayment amount	₹55.00 cr (₹550.00 mn) for scheduled repayment/prepayment of outstanding borrowings of the company in FY27.	OK	Objects of the Offer, p.129, 135
Where in DRHP: 'Objects of the Offer' Why It Matters: Deleveraging is healthy but it is balance-sheet repair, not growth. Benchmark / Red Flag Trigger: High % to debt = repair, not growth Exact Citation: Objects of the Offer, p.129, 135
20	Objects: working capital amount	₹0.00 cr directly earmarked for working capital from IPO proceeds (working capital funded via internal cash flows & bank lines).	N/A	Objects of the Offer, p.129
Where in DRHP: 'Objects of the Offer' Why It Matters: Normal for a growing WC-intensive business; large amounts can signal a stretched cycle. Benchmark / Red Flag Trigger: - Exact Citation: Objects of the Offer, p.129
21	Objects: acquisition - named target or 'future M&A'?	₹0.00 cr earmarked for acquisitions from IPO proceeds.	N/A	Objects of the Offer, p.129
Where in DRHP: 'Objects of the Offer' Why It Matters: A named, costed target beats a blank cheque for 'inorganic growth'. Benchmark / Red Flag Trigger: Unspecified M&A = flag Exact Citation: Objects of the Offer, p.129
22	General Corporate Purposes (GCP) as % of fresh issue	Balance Net Proceeds allocated to General Corporate Purposes, strictly capped at 25% of Gross Proceeds (max ₹23.75 cr).	OK	Objects of the Offer, p.129, 141
Where in DRHP: 'Objects of the Offer' Why It Matters: SEBI caps GCP (and unidentified objects). High GCP = undefined use of your money. Benchmark / Red Flag Trigger: Maxed-out / high GCP = flag Exact Citation: Objects of the Offer, p.129, 141
23	Issue expenses as % of the issue	Offer expenses shared pro-rata between Company and Selling Shareholders per SEBI ICDR rules; standard BRLM/legal/RTA fees.	OK	Objects of the Offer, p.141-144
Where in DRHP: 'Objects of the Offer' Why It Matters: Fees eat into the proceeds that reach the company. Benchmark / Red Flag Trigger: Unusually high = flag Exact Citation: Objects of the Offer, p.141-144
24	Overall read: growth / debt-repair / exit / mixed?	Mixed/Defensive: ₹55.00 cr (57.9%) dedicated to balance sheet deleveraging, ₹18.13 cr (19.1%) for manufacturing capex, while 85.4% of total IPO value is promoter monetization.	Watch	Objects of the Offer, p.128, 129
Where in DRHP: Synthesise the objects Why It Matters: The single most important interpretation of the whole issue. Benchmark / Red Flag Trigger: Pure exit or repair = low enthusiasm Exact Citation: Objects of the Offer, p.128, 129
25	Pre-IPO placement done - at what price vs the IPO band?	No Pre-IPO placement was undertaken prior to the RHP filing.	N/A	Capital Structure, p.92-127
Where in DRHP: 'Capital Structure' Why It Matters: A recent placement far below the IPO price signals aggressive pricing. Benchmark / Red Flag Trigger: Big gap below IPO price = flag Exact Citation: Capital Structure, p.92-127
26	WACA - weighted avg cost of acquisition of promoter/investor shares vs IPO price	Selling Shareholders WACA: CP Talesara ₹Nil, Amit Talesara ₹0.05, Puneet Talesara ₹0.05, Ankit Talesara ₹0.04, NK Pande ₹0.06 (adjusted for bonus & split). Huge gap to ₹300 issue price.	Watch	Details of OFS, p.1, 150
Where in DRHP: 'Basis for Offer Price' Why It Matters: SEBI-mandated. Shows the markup at which insiders are selling to you. Benchmark / Red Flag Trigger: IPO price >> WACA = priced for insiders Exact Citation: Details of OFS, p.1, 150

LAYER 3 • BUSINESS QUALITY

Business Quality: Concentration, Retention & Durability

Business durability is anchored by customer stickiness, recurring volume growth, and disciplined operational execution.

Revenue Breakdown & Product Segment Mix

Product / Operating Segment	% Share	Revenue Value
Temperature Sensing Solutions & Sensors	44.6%	₹198.38 Cr
Specialized High-Temp Cables	34.7%	₹154.42 Cr
Industrial Electrical Heating Solutions	20.7%	₹92.08 Cr

Customer & Geographic Concentration Matrix

Counterparty / Customer Tier	Revenue Share (%)	Rupee Amount	Strategic Exposure Note
Temperature Sensors & Pyrometry Solutions	44.6%	₹198.38 Cr	Thermocouples, RTDs, thermal imagers
Specialized High-Temperature Cables	34.7%	₹154.42 Cr	Critical industrial instrumentation cables
Industrial Electrical Heating Solutions	20.7%	₹92.08 Cr	Heating elements for steel, glass, cement
Domestic vs Export Revenue Mix	Domestic: 71.7% \| Exports: 28.3%	₹319 Cr / ₹126 Cr	Sales to Germany, Europe, Asia
Top 1 Customer Concentration	<3.5%	₹15.57 Cr	Zero customer dependency
Top 10 Customers Concentration	18.6%	₹82.73 Cr	Broad base across 3,000+ industrial OEMs

#

Checkpoint

Your Finding (Prospectus Data)

Status

Page Ref

27

Revenue breakdown by segment / product

FY26 Revenue by vertical: Temperature Sensing Solutions ₹1,983.80 mn (44.59%), Specialized Cables ₹1,544.15 mn (34.71%), Electrical Heating Solutions ₹920.83 mn (20.70%). Well-diversified product mix.

OK

Basis for Offer Price, p.147; Business, p.276

28

Top customer as % of revenue

Top 1 customer accounted for <3.5% of revenue in FY26 (well below 25-30% red-flag threshold). No individual customer dominates top line.

OK

Risk Factors #1, p.21; Objects, p.132

29

Top 5 customers as % of revenue

Top 5 customers accounted for <12% and Top 10 accounted for 18.59% (₹82.73 cr) in FY26 (FY25: 23.68%, FY24: 24.74%). Exceptionally diversified customer base of >3,800 clients.

OK

Risk Factors #1, p.21; Objects, p.132

30

Are customer relationships recurring/contracted or order-by-order?

Mix of purchase orders for customized engineered products and long-term rate contracts/MRO supply agreements with industrial OEM clients.

OK

Our Business, p.276-285

31

Recurring / repeat revenue %

High customer stickiness: 46.35% of FY26 revenue (₹206.19 cr) from repeat customers (FY25: 71.01%, FY24: 67.38%). Average association with top 20 clients is 10 years (range 1-23 years).

Multi-Period Trend Breakdown

FY26	FY25	FY24
revenue (₹206	71	67

OK

Objects of the Offer, p.134; Risk Factors #1, p.22

32

Supplier concentration (top / top-5)

Top 1 supplier (India Trade Link Pvt Ltd) accounts for 20.77% of purchases (₹54.15 cr); Top 5 account for 33.02% (₹86.11 cr); Top 10 account for 40.33% (₹105.17 cr) in FY26. Moderately concentrated.

Watch

Risk Factors #4, p.24

33

Single-source or single raw-material dependency?

Primary raw materials are copper, nickel, stainless steel, precious metals, insulation. Domestic sourcing is 80.36% (₹209.56 cr); imported raw materials account for 19.64% (₹51.20 cr) in FY26.

OK

Risk Factors #3-#4, p.23; Risk Factors #40, p.50

34

Manufacturing footprint - single-plant dependency?

Operates 15 manufacturing units worldwide: 10 units in Udaipur, Rajasthan, India; 5 units overseas (Germany, Poland, UAE, South Korea, Indonesia). Some geographic concentration at Udaipur hub.

Watch

Risk Factors #5, p.25; Our Business, p.282

35

Current capacity utilisation

FY26 Capacity utilization: Unit I (Sensors) 58.14%, Unit II (Sensors 70.15%, Heating 49.60%, Cables 96.00%), Unit IV (Cables) 90.57%, Unit VI (Heating) 41.35%, Unit VII (Heating) 55.30%. Adequate headroom.

OK

Our Business, p.290-292

36

Geographic concentration of revenue

Domestic vs International: Domestic revenue ₹319.06 cr (71.72%); International export revenue ₹125.82 cr (28.28%) across 70+ countries in FY26 (up from ₹58.64 cr in FY24).

OK

Basis for Offer Price, p.147; MD&A, p.470

37

Asset-heavy or asset-light?

Asset-light to moderate engineering model: Net PPE ₹113.50 cr + ROU ₹31.24 cr supporting revenue of ₹444.88 cr. Fixed Asset Turnover is 3.07x in FY26.

OK

Basis for Offer Price, p.147; Balance Sheet, p.75

38

Working-capital intensity

High working capital intensity: Net Working Capital Days increased from 152 days in FY24 to 193 in FY25 and 210 days in FY26, driven by high inventory holding (170 days) and custom heating solutions.

Watch

Basis for Offer Price, p.147, 148

39

Distribution model (direct / dealer / online)

Direct B2B engineering sales force and institutional technical marketing serving industrial OEMs and EPC contractors.

OK

Our Business, p.285-288

40

Order book / backlog (if relevant)

Mix of short-to-medium term purchase order backlog and recurring replacement MRO demand across heavy process industries.

OK

Our Business, p.276, 285

41

Cyclicality of the business

Moderate cyclicality: exposed to industrial capex cycles in metal (19.68%), petrochemicals (21.45%), and power (12.27%), mitigated by recurring MRO replacement sales.

Watch

Risk Factors #2, p.22; MD&A, p.468

42

Entry barriers / moat - real or weak?

High entry barriers: NABL/DAkkS lab accreditations, stringent OEM qualification cycles (1-3 yrs), deep backward integration (MI cables), 12 patents, and bespoke engineered designs.

OK

Our Strengths, p.258-265; Industry, p.190

43

Key licences / regulatory approvals the business depends on

Factory licences under Factories Act, CPCB/SPCB consents under Air/Water Acts, ISO 9001/14001/45001, CE, ATEX, IECEx certifications for hazardous environments. Approvals are up to date.

OK

Government Approvals, p.511-513

44

Technology / obsolescence risk

Low substitution risk: temperature measurement and electric process heating are fundamental physical requirements; shift toward non-contact pyrometers and fibre optics is captured in-house by Tempsens.

OK

Industry Overview, p.174; Our Business, p.256

LAYER 4 • FINANCIAL QUALITY

Are The Numbers Real? Multi-Year Forensic Quality Audit

Unlike many pre-IPO engineering businesses, Tempsens shows genuine cash backing: 3-year cumulative CFO reached ₹133.26 cr against PAT of ₹174.54 cr (0.76x conversion), generating positive Free Cash Flow of +₹76.71 cr over FY24-FY26 with zero auditor qualifications from Walker Chandiok & Co LLP.

Revenue from Operations

+27.2%

₹444.88 Cr

₹274.81 Cr

FY24

₹378.53 Cr

FY25

₹444.88 Cr

FY26

EBITDA & Operating Profit

+36.1%

₹113.17 Cr (24.8%)

₹61.13 Cr (22.0%)

FY24

₹97.32 Cr (25.5%)

FY25

₹113.17 Cr (24.8%)

FY26

Profit After Tax (PAT)

+31.8%

₹71.07 Cr (15.6%)

₹40.92 Cr (14.7%)

FY24

₹62.56 Cr (16.4%)

FY25

₹71.07 Cr (15.6%)

FY26

Cash Flow from Operations (CFO)

+6.4%

₹42.02 Cr

₹37.09 Cr

FY24

₹54.15 Cr

FY25

₹42.02 Cr

FY26

3-Year Audited Financial Performance Summary

Financial Parameter / Metric	FY24	FY25	FY26	3-Yr CAGR
Revenue from Operations	₹274.81 Cr	₹378.53 Cr	₹444.88 Cr	+27.2%
EBITDA (Operating Profit)	₹61.13 Cr (22.0%)	₹97.32 Cr (25.5%)	₹113.17 Cr (24.8%)	+36.1%
Profit After Tax (PAT)	₹40.92 Cr (14.7%)	₹62.56 Cr (16.4%)	₹71.07 Cr (15.6%)	+31.8%
Operating Cash Flow (CFO)	₹37.09 Cr	₹54.15 Cr	₹42.02 Cr	+6.4%
ROCE (Return on Capital)	22.82%	23.08%	21.61%	22%+ ROCE
Debt-to-Equity (D/E)	0.15x	0.16x	0.15x	Low Debt

#

Checkpoint

Your Finding (Prospectus Data)

Status

Page Ref

45

Revenue (3 yrs) and CAGR

Revenue: FY24 ₹274.81 cr → FY25 ₹378.53 cr → FY26 ₹444.88 cr. 3-year CAGR = 27.23% (FY25 YoY 37.74%, FY26 YoY 17.53%).

Multi-Period Trend Breakdown

FY24	FY25	FY26	FY25	FY26
₹274	₹378	₹444	YoY 37	YoY 17

OK

Basis for Offer Price, p.147; Financials, p.76

46

Is growth organic or acquisition-driven?

Organic market share gains in temperature sensors and cables, plus inorganic impact of Marathon Heater amalgamation (effective April 2024) and overseas subsidiaries acquisition.

OK

MD&A, p.468; History, p.317

47

Gross margin trend (3 yrs)

Gross Margin: FY24 39.15% (₹107.59 cr) → FY25 46.93% (₹177.66 cr) → FY26 46.03% (₹204.78 cr). Healthy margin expansion post-Marathon integration.

Multi-Period Trend Breakdown

FY24	FY25	FY26
39	46	46

OK

Financials, p.76; MD&A, p.475

48

EBITDA and EBITDA-margin trend

EBITDA: FY24 ₹61.13 cr (21.98%) → FY25 ₹97.32 cr (25.45%) → FY26 ₹113.17 cr (24.83%). EBITDA CAGR = 36.07%.

Multi-Period Trend Breakdown

FY24	FY25	FY26
₹61	₹97	₹113

OK

Basis for Offer Price, p.147; Financials, p.76

49

Sudden margin spike right before the IPO?

EBITDA margin expanded from 21.98% in FY24 to 25.45% in FY25 and settled at 24.83% in FY26. Expansion reflects higher-margin heating solutions and operational leverage.

Multi-Period Trend Breakdown

FY24	FY25	FY26
to 25	and settled at 24	. Expansion reflects higher-margin heating solutions and operational leverage

OK

Basis for Offer Price, p.147; MD&A, p.470

50

PAT and PAT-margin trend

PAT: FY24 ₹40.92 cr (14.72%) → FY25 ₹62.56 cr (16.36%) → FY26 ₹71.07 cr (15.59%). PAT CAGR = 31.79% (Adjusted PAT CAGR = 35.27% reaching ₹74.87 cr in FY26).

Multi-Period Trend Breakdown

FY24	FY25	FY26	FY26
₹40	₹62	₹71	)

OK

Basis for Offer Price, p.147; Financials, p.76

51

Other income as % of PAT

Other Income: FY24 ₹3.23 cr (0.79% of PAT) → FY25 ₹3.94 cr (0.63% of PAT) → FY26 ₹10.98 cr (15.45% of PAT / 2.41% of Total Income). FY26 increase driven by interest & forex gains.

Multi-Period Trend Breakdown

FY24	FY25	FY26
₹3	₹3	₹10

OK

Financials, p.76; MD&A, p.474

52

CFO (operating cash flow) trend

CFO: FY24 ₹37.09 cr → FY25 ₹54.15 cr → FY26 ₹42.02 cr. Solid operating cash flow generation across all 3 years.

Multi-Period Trend Breakdown

FY24	FY25	FY26
₹37	₹54	₹42

OK

Cash Flow Statement, p.77

53

CFO / PAT (cash conversion), multi-year

CFO/PAT: FY24 0.91x → FY25 0.87x → FY26 0.59x. 3-year cumulative CFO (₹133.26 cr) / cumulative PAT (₹174.54 cr) = 0.76x. Healthy cash conversion above 0.70x benchmark.

Multi-Period Trend Breakdown

FY24	FY25	FY26
0	0	0

OK

Financials, p.76, 77

54

Was CFO negative in any year?

No, CFO was consistently positive in all three fiscal years (FY24 ₹37.09 cr, FY25 ₹54.15 cr, FY26 ₹42.02 cr).

Multi-Period Trend Breakdown

FY24	FY25	FY26
₹37	₹54	₹42

OK

Cash Flow Statement, p.77

55

Free cash flow (CFO minus capex)

Free Cash Flow (CFO - Capex on PPE/Intangibles): FY24 +₹22.19 cr → FY25 +₹26.47 cr → FY26 +₹28.05 cr. Cumulative 3-year FCF is positive at +₹76.71 cr.

Multi-Period Trend Breakdown

FY24	FY25	FY26
+₹22	+₹26	+₹28

OK

Cash Flow Statement, p.77

56

Total debt and net debt

As of March 31, 2026: Total Borrowings ₹77.95 cr (Long-term ₹7.60 cr + Short-term ₹70.35 cr); Cash, Bank & Current Investments ₹60.67 cr; Net Debt = ₹17.28 cr (or ₹43.71 cr excl investments).

OK

Balance Sheet, p.75; MD&A, p.490

57

Debt / Equity

Debt/Equity ratio: FY24 0.15x → FY25 0.16x → FY26 0.15x. Very conservative leverage (well below 1.5x benchmark). Debt/EBITDA is 0.69x in FY26.

Multi-Period Trend Breakdown

FY24	FY25	FY26	FY26
0	0	0	.

OK

Basis for Offer Price, p.147; Balance Sheet, p.75

58

Interest coverage (EBIT / interest)

Interest coverage (EBIT / Finance Cost): FY24 34.97x → FY25 40.90x → FY26 19.03x (EBIT ₹99.35 cr / Finance cost ₹5.22 cr). Robust debt-servicing buffer.

Multi-Period Trend Breakdown

FY24	FY25	FY26
34	40	19

OK

Financials, p.76; MD&A, p.470

59

ROE and trend

Return on Net Worth (RoNW): FY24 20.02% → FY25 14.08% → FY26 13.54% (Weighted Average 15.25%). Adjusted ROE was 20.70% in FY26 (23.05% in FY25) adjusting for goodwill/intangibles amortization.

Multi-Period Trend Breakdown

FY24	FY25	FY26	FY26
20	14	13	(23

OK

Basis for Offer Price, p.146, 147

60

ROCE and trend

Return on Capital Employed (ROCE): FY24 22.82% → FY25 23.08% → FY26 21.61%. Stable, high-return capital efficiency across 3 years.

Multi-Period Trend Breakdown

FY24	FY25	FY26
22	23	21

OK

Basis for Offer Price, p.147

61

ROCE vs cost of capital

FY26 ROCE of 21.61% substantially exceeds estimated industrial cost of capital (~11-12%), generating strong positive economic value add (EVA).

OK

Basis for Offer Price, p.147

62

Debtor (receivable) days and trend

Trade Receivables: FY24 ₹45.56 cr (60 DSO) → FY25 ₹64.24 cr (62 DSO) → FY26 ₹85.74 cr (70 DSO). Moderate lengthening in debtor days.

Multi-Period Trend Breakdown

FY24	FY25	FY26
₹45	₹64	₹85

Watch

Balance Sheet, p.75; Basis, p.148

63

Inventory days and trend

Inventories: FY24 ₹57.07 cr (124 days) → FY25 ₹86.42 cr (157 days) → FY26 ₹111.94 cr (170 days). Inventory holding increased due to custom heating projects and imported alloy stocking.

Multi-Period Trend Breakdown

FY24	FY25	FY26
₹57	₹86	₹111

Watch

Balance Sheet, p.75; Basis, p.148

64

Payable days and trend

Trade Payables: FY24 ₹15.65 cr (34 days) → FY25 ₹14.41 cr (26 days) → FY26 ₹20.01 cr (30 days). Prompt supplier payment cycle.

Multi-Period Trend Breakdown

FY24	FY25	FY26
₹15	₹14	₹20

OK

Balance Sheet, p.75; Basis, p.148

65

Cash conversion cycle

Cash Conversion Cycle (NWC Days): FY24 152 days → FY25 193 days → FY26 210 days. Working capital intensity has lengthened by 58 days over 3 years.

Watch

Basis for Offer Price, p.147, 148

66

Contingent liabilities vs net worth

Contingent Liabilities as of March 31, 2026: ₹1.74 cr (₹17.39 mn: indirect tax ₹1.09 cr + land dispute ₹0.65 cr), representing only 0.33% of Net Worth (₹525.48 cr). Minimal exposure.

OK

Summary of Contingent Liabilities, p.78

67

Capex history vs proposed capex

Historical Capex: FY24 ₹26.79 cr, FY25 ₹30.88 cr, FY26 ₹13.98 cr (total ₹71.65 cr). Proposed IPO capex is ₹18.13 cr (moderate and realistic relative to past run-rate).

Multi-Period Trend Breakdown

FY24	FY25	FY26
₹26	₹30	₹13

OK

Cash Flow Statement, p.77; Objects, p.129

68

Dividend history

Dividends paid: FY24 ₹Nil, FY25 ₹0.61 cr, FY26 ₹2.66 cr. Dividend payout policy approved on September 23, 2025.

Multi-Period Trend Breakdown

FY24	FY25	FY26	2025
₹Nil	₹0	₹2	.

OK

Financials, p.77; Dividend Policy, p.362

69

Standalone vs consolidated divergence

Consolidated revenue (₹444.88 cr) and PAT (₹71.07 cr) incorporate 5 operating subsidiaries and 3 joint ventures; standalone accounts for ~85% of consolidated business. Structure is clean.

OK

Restated Financial Information, p.363, 442

70

Material restatement adjustments?

Restated under Ind AS; includes restatements for business combinations (Marathon Amalgamation Scheme effective April 1, 2024 and German/Polish entities acquisition). No adverse restatements.

OK

Auditor's Report, p.364; Note 45, p.432

71

Auditor qualifications / emphasis of matter

Walker Chandiok & Co LLP issued clean unmodified examination report dated August 5, 2026 with no qualifications and no emphasis of matter.

OK

Auditor's Report, p.364-367

72

Aggressive revenue-recognition policy?

Revenue recognized upon satisfaction of performance obligations at point in time (dispatch/delivery under Incoterms). Standard Ind AS 115 compliant policy.

OK

Significant Accounting Policies, p.376

LAYERS 5 & 6 • GOVERNANCE & RPT

Governance Architecture & Related Party Transactions

Promoters hold 80.52% pre-issue with zero share pledge. The Board maintains 50% independent director representation with diverse professional backgrounds, promoter remuneration is modest at 3.71% of PAT, and related party transactions are minimal (<0.5% of sales) following the Marathon amalgamation.

Pre & Post-Issue Shareholding Structure

Shareholder Category / Promoter	Pre-IPO %	Post-IPO %	Pledge Status	Statutory Lock-in
-	-	-	Nil	Standard
-	-	-	Nil	Standard

#	Checkpoint	Your Finding (Prospectus Data)	Status	Page Ref
73	Promoter background and track record	Promoters Virendra Prakash Rathi (CMD, 77 yrs, 50+ yrs exp), Vinay Rathi (MD, 52 yrs, 30+ yrs exp), and Pratap Singh Talesara (NED, 76 yrs) are seasoned technocrats in instrumentation with clean track records.	OK	Our Promoters, p.337, 358
Where in DRHP: 'Our Promoters', 'Management' Why It Matters: The quality and integrity of stewardship. Benchmark / Red Flag Trigger: Prior failure/fraud = flag Exact Citation: Our Promoters, p.337, 358
74	Promoter holding pre-IPO	Promoters directly hold 37,208,195 Equity Shares (46.13%) and Promoter Group holds 27,737,479 shares (34.39%); total Promoter & Promoter Group holding is 80.52% (89.01% including director Ankit Talesara).	OK	Capital Structure, p.101, 108
Where in DRHP: 'Capital Structure' Why It Matters: Skin in the game today. Benchmark / Red Flag Trigger: - Exact Citation: Capital Structure, p.101, 108
75	Promoter holding post-IPO	Promoters & Promoter Group will continue to hold >55% controlling majority stake post-IPO following 18.50 mn share OFS and fresh issue dilution.	OK	Capital Structure, p.101, 108
Where in DRHP: 'Capital Structure' Why It Matters: Alignment going forward. Benchmark / Red Flag Trigger: Very low post-IPO = misalignment Exact Citation: Capital Structure, p.101, 108
76	Promoter share pledge	Zero promoter share pledge or encumbrance as of the date of the RHP.	OK	Capital Structure, p.105
Where in DRHP: 'Capital Structure', Risk Factors Why It Matters: Pledging signals financial stress. Benchmark / Red Flag Trigger: Any meaningful pledge = flag Exact Citation: Capital Structure, p.105
77	Promoter / KMP remuneration vs PAT and peers	FY26 Promoter Remuneration: Virendra Prakash Rathi ₹1.32 cr (₹13.19 mn) and Vinay Rathi ₹1.32 cr (₹13.19 mn); total ₹2.64 cr = 3.71% of FY26 PAT. Fair and reasonable.	OK	Summary of RPTs, p.80; Management, p.342
Where in DRHP: 'Management' Why It Matters: Cash extraction relative to profits. Benchmark / Red Flag Trigger: High pay vs PAT = flag Exact Citation: Summary of RPTs, p.80; Management, p.342
78	Group structure - complex / circular / many entities?	Group includes 5 unlisted operating entities (Pyrotech Electronics, Matplat, Pyrotech Tech, PT Tempsens Asia Jaya, Tempsens Korea). Clean corporate structure post-Marathon merger.	OK	Our Group Companies, p.514; History, p.317
Where in DRHP: 'Our Group Companies' Why It Matters: Complexity is where value and leakage hide. Benchmark / Red Flag Trigger: Complex web = flag Exact Citation: Our Group Companies, p.514; History, p.317
79	Auditor - reputable? Recent change or resignation?	Walker Chandiok & Co LLP (Tier-1 Grant Thornton network firm) appointed Current Statutory Auditor on Sept 23, 2025 following joint audit with Bansi Lal Shah & Co. Transition is standard pre-IPO upgrade.	OK	General Information, p.83, 85
Where in DRHP: 'Auditors', history Why It Matters: Audit credibility and any pre-IPO churn. Benchmark / Red Flag Trigger: Resignation before IPO = flag Exact Citation: General Information, p.83, 85
80	CFO / KMP churn before the IPO	Stable management: CFO Priyanka Menaria and CS Vishal Jain appointed in April 2025 as part of corporate formalization prior to public listing; no disruptive KMP departures.	OK	Our Management, p.355-357
Where in DRHP: 'Management', history Why It Matters: Instability in key finance roles before listing. Benchmark / Red Flag Trigger: CFO exit pre-IPO = flag Exact Citation: Our Management, p.355-357
81	Board: proportion of independent directors	Board of 8 Directors: 2 Executive, 2 Non-Executive, 4 Independent Directors (50% independence). Includes 1 woman Independent Director (Ruchika Godha). Complies with SEBI LODR.	OK	Our Management, p.337-340
Where in DRHP: 'Management' Why It Matters: Strength of independent oversight. Benchmark / Red Flag Trigger: Below norms = flag Exact Citation: Our Management, p.337-340
82	Independent-director credentials - real or token?	Independent Directors have strong credentials: Deepak Kabra (CA/CFA, ex-investments), Rishabh Verdia (industrial background), Ruchika Godha (CA), Bhagwat Singh Babel (ex-MD Secure Meters). Appointed June 2025.	OK	Our Management, p.338-340
Where in DRHP: Director bios Why It Matters: Whether oversight is actually effective. Benchmark / Red Flag Trigger: Token / related IDs = flag Exact Citation: Our Management, p.338-340
83	ESOP / outstanding options - dilution overhang	ESOP 2025 scheme approved on September 8, 2025; pool size 1,000,000 equity shares (1.24% of capital). Manageable dilution overhang.	OK	Capital Structure, p.125-127
Where in DRHP: 'Capital Structure' Why It Matters: Future dilution of your stake. Benchmark / Red Flag Trigger: Large unvested pool = caution Exact Citation: Capital Structure, p.125-127
84	Lock-in: promoter and anchor / pre-IPO investors	Minimum 20% promoter contribution locked in for 18 months; balance promoter shares locked in for 6 months. Anchor investor 50% locked for 30 days and 50% for 90 days.	OK	Capital Structure, p.114-116
Where in DRHP: 'Capital Structure' Why It Matters: Share supply that hits the market post-listing. Benchmark / Red Flag Trigger: Big near-term unlocks = caution Exact Citation: Capital Structure, p.114-116
85	Past corporate-governance issues / regulatory strictures	No SEBI, RBI, or regulatory strictures against promoters, directors, or company. One private criminal petition by ex-employee (service matter).	OK	Outstanding Litigation, p.504, 508
Where in DRHP: Risk Factors, Litigation Why It Matters: A pattern of past behaviour. Benchmark / Red Flag Trigger: Any history = flag Exact Citation: Outstanding Litigation, p.504, 508

#	Checkpoint	Your Finding (Prospectus Data)	Status	Page Ref
86	Sales to related parties (% of revenue)	Sale of goods to related parties in FY26: ₹1.33 cr (₹13.30 mn = 0.30% of revenue: Pyrotech Electronics ₹1.07 cr, PT Tempsens Asia ₹0.24 cr). Very low RPT sales %.	OK	Summary of RPTs, p.79
Where in DRHP: RPT note Why It Matters: Revenue propped up by group entities? Benchmark / Red Flag Trigger: High % = flag Exact Citation: Summary of RPTs, p.79
87	Purchases from related parties (% of costs)	Purchase of goods/services from related parties in FY26: ₹0.30 cr (₹3.07 mn = 0.07% of revenue: Pyrotech Electronics ₹0.24 cr, Pyrotech Tech ₹0.06 cr). Negligible RPT purchases.	OK	Summary of RPTs, p.79
Where in DRHP: RPT note Why It Matters: A channel to manipulate margins. Benchmark / Red Flag Trigger: High % = flag Exact Citation: Summary of RPTs, p.79
88	Loans / advances to promoter or related entities	Unsecured borrowings from promoters/family (Vinay Rathi, Sonal Rathi, Tanya Rathi) repaid in full during FY26 (₹4.91 cr repaid); zero promoter borrowings outstanding as of March 31, 2026.	OK	Summary of RPTs, p.81, 82
Where in DRHP: RPT note Why It Matters: Company cash diverted to insiders. Benchmark / Red Flag Trigger: Any sizeable loan out = flag Exact Citation: Summary of RPTs, p.81, 82
89	Rent / royalty / brand fees paid to related parties	Rent paid to related parties (Vinay Rathi HUF, Sonal Rathi, Nidhi Toshniwal) totaled ₹0.08 cr (₹0.84 mn) in FY26 for office premises. Immaterial sum.	OK	Summary of RPTs, p.80
Where in DRHP: RPT note Why It Matters: Recurring cash extraction from the company. Benchmark / Red Flag Trigger: Royalty to promoter = flag Exact Citation: Summary of RPTs, p.80
90	Outstanding RPT balances (receivable / payable)	Outstanding year-end RPT balances as of March 31, 2026: Trade Receivables ₹2.79 cr (PT Tempsens Asia ₹1.27 cr, Pyrotech Electronics ₹1.07 cr, Tempsens Korea ₹0.44 cr); Trade Payables ₹0.15 cr. Immaterial.	OK	Summary of RPTs, p.82
Where in DRHP: RPT note Why It Matters: Money stuck with related parties. Benchmark / Red Flag Trigger: Large outstanding = flag Exact Citation: Summary of RPTs, p.82
91	RPT trend over 3 years	RPT intensity has dropped sharply: historical inter-company loans and sales/purchases with Marathon Heater eliminated upon amalgamation in FY25.	OK	Summary of RPTs, p.79-82
Where in DRHP: RPT note Why It Matters: Rising reliance on related-party dealings. Benchmark / Red Flag Trigger: Increasing trend = flag Exact Citation: Summary of RPTs, p.79-82
92	Disclosed at arm's length? Pricing basis?	All RPTs confirmed by management and statutory auditors to be on an arm's length basis and in the ordinary course of business.	OK	Summary of RPTs, p.82; Note 38, p.425
Where in DRHP: RPT note Why It Matters: Whether terms are fair to minority shareholders. Benchmark / Red Flag Trigger: 'At cost'/unclear basis = scrutinise Exact Citation: Summary of RPTs, p.82; Note 38, p.425
93	Overall RPT concern level (Low / Medium / High)	Low concern: RPTs represent <0.5% of sales/costs, legacy promoter unsecured loans fully cleared, and previous group operating entities consolidated into the listed company.	OK	Summary of RPTs, p.79-82
Where in DRHP: Synthesise this layer Why It Matters: Your single judgment on related-party risk. Benchmark / Red Flag Trigger: - Exact Citation: Summary of RPTs, p.79-82

LAYER 7 • LITIGATION & REGULATORY

Litigation, Tax Disputes & Materiality Sizing

Outstanding legal proceedings represent standard commercial and tax disputes with low aggregate materiality relative to net worth.

Outstanding Legal & Tax Dispute Summary

Litigation / Regulatory Category	Case Count	Quantifiable Exposure	Materiality & Balance Sheet Risk
Direct Tax & Assessment Disputes	1	₹1.14 Cr	Evaluated
Arbitration Claim against Subsidiary (Theia)	1	₹11.04 Cr	Evaluated

#	Checkpoint	Your Finding (Prospectus Data)	Status	Page Ref
94	Criminal cases against promoters / directors	No material criminal cases. One private criminal revision petition filed by ex-employee Durga Shankar Paliwal against promoters Virendra & Vinay Rathi alleging lack of disciplinary action (pending show cause).	Watch	Outstanding Litigation, p.508
Where in DRHP: 'Outstanding Litigation' Why It Matters: An integrity red flag that can override the numbers. Benchmark / Red Flag Trigger: Any = serious flag Exact Citation: Outstanding Litigation, p.508
95	Material civil / commercial cases - company	No material civil litigation against the Company. 1 commercial arbitration under Sec 9 by Theia New Consultancy against subsidiary Tempsens Measurement claiming ₹11.04 cr (₹110.41 mn).	Watch	Outstanding Litigation, p.506, 507
Where in DRHP: 'Outstanding Litigation' Why It Matters: Direct business and financial risk. Benchmark / Red Flag Trigger: - Exact Citation: Outstanding Litigation, p.506, 507
96	Direct + indirect tax disputes and amounts	Tax proceedings: 2 Direct Tax matters (₹0.05 cr / ₹0.50 mn) and 4 Indirect Tax matters (₹1.09 cr / ₹10.90 mn). Total tax disputes ₹1.14 cr.	OK	Outstanding Litigation, p.510; Contingent Liab, p.78
Where in DRHP: 'Outstanding Litigation' Why It Matters: Contingent cash outflows. Benchmark / Red Flag Trigger: Large vs PAT = flag Exact Citation: Outstanding Litigation, p.510; Contingent Liab, p.78
97	Regulatory / statutory actions (SEBI, RBI, environmental, labour)	No pending actions or strictures from SEBI, RBI, MCA, or pollution control boards against company or promoters.	OK	Outstanding Litigation, p.504, 509
Where in DRHP: 'Outstanding Litigation' Why It Matters: Signals compliance culture. Benchmark / Red Flag Trigger: Active actions = flag Exact Citation: Outstanding Litigation, p.504, 509
98	Total quantifiable amount involved	Total quantifiable litigation: Tax disputes ₹1.14 cr + MACT ₹0.10 cr + Theia arbitration claim against subsidiary ₹11.04 cr = ₹12.28 cr total.	Watch	Outstanding Litigation, p.505-510
Where in DRHP: Litigation summary Why It Matters: Sizing the aggregate exposure. Benchmark / Red Flag Trigger: - Exact Citation: Outstanding Litigation, p.505-510
99	Materiality vs PAT and net worth	Total litigation (₹12.28 cr) represents 17.27% of FY26 PAT (₹71.07 cr) and 2.34% of Net Worth (₹525.48 cr). Manageable level with low balance sheet risk.	Watch	Outstanding Litigation, p.510; Financials, p.75, 76
Where in DRHP: Compare Why It Matters: Whether the exposure is survivable. Benchmark / Red Flag Trigger: Multiple of PAT / net worth = flag Exact Citation: Outstanding Litigation, p.510; Financials, p.75, 76
100	Any case threatening a key licence or the business model?	None: all factory licences, environmental consents, and NABL/DAkkS calibration accreditations are valid and active; no dispute endangers core manufacturing.	OK	Government Approvals, p.511-513
Where in DRHP: Litigation, Risk Factors Why It Matters: Existential risk to operations. Benchmark / Red Flag Trigger: Yes = serious flag Exact Citation: Government Approvals, p.511-513

LAYER 8 • VALUATION & PEER BENCHMARK

Valuation: Peer Comparison & Multiples Benchmark

Valuation benchmark indicates competitive pricing relative to listed industry peers and forward earnings power.

Listed Industry Peer Valuation Benchmark

Company Name / Peer Benchmark	P/E (x)	EV/EBITDA	P/S (x)	ROE (%)	ROCE (%)	YoY Growth	PAT Margin
Tempsens Instruments (India) Limited	32.3x	18.4x	-	-	21.6%	-	-
Honeywell Automation India Limited	74.2x	46.5x	-	-	22.1%	-	-
ABB India Limited	82.4x	52.0x	-	-	28.5%	-	-
Forbes & Company Limited	38.5x	19.8x	-	-	15.2%	-	-
Industrial Instrumentation Composite	65.0x	39.4x	-	-	21.9%	-	-

#

Checkpoint

Your Finding (Prospectus Data)

Status

Page Ref

101

IPO P/E (post-issue, upper band)

At the issue price of ₹300, post-issue trailing P/E is 36.01x based on FY26 Diluted EPS (₹8.33), 37.45x on Weighted Average EPS (₹8.01), and 32.33x on Adjusted EPS (₹9.28).

Watch

Basis for Offer Price, p.145-147

102

Peer P/E - and is the peer set fair or cherry-picked?

No directly comparable listed peers in India that span thermal sensors, heating, and cables (per RHP p.146). Global thermal engineering peers (WIKA, Watlow) unlisted; domestic instrumentation/cables trade at 35-50x P/E.

OK

Basis for Offer Price, p.146, 150

103

EV / EBITDA vs peers

Implied Enterprise Value is ~₹2,532.26 cr (Mcap ₹2,514.98 cr + Debt ₹77.95 cr - Cash ₹60.67 cr). FY26 EBITDA is ₹113.17 cr, giving an EV/EBITDA multiple of 22.38x.

Watch

Basis for Offer Price, p.147; Financials, p.75, 76

104

Price / Sales (especially if loss-making)

Price / Sales multiple is 5.65x based on FY26 Revenue (₹444.88 cr) and post-issue market cap of ₹2,514.98 cr. EV / Sales is 5.69x.

Watch

Basis for Offer Price, p.147; Financials, p.76

105

Price / Book

Pre-issue NAV per share is ₹61.66 (Net Worth ₹497.42 cr attributable to owners / 80.67 mn shares). Implied Price / Book (P/B) ratio at ₹300 is 4.87x.

Watch

Basis for Offer Price, p.146

106

Implied market cap at IPO

Post-issue paid-up equity is 83,832,692 shares of ₹4 each. At issue price of ₹300, implied post-issue market capitalization is ₹2,514.98 cr (~₹25.15 billion).

OK

The Offer, p.1, 72

107

ROE vs peers

FY26 RoNW (ROE) is 13.54% (reported) and 20.70% (adjusted for Marathon goodwill/intangibles amortization). Robust return on capital.

OK

Basis for Offer Price, p.146, 147

108

ROCE vs peers

FY26 ROCE is 21.61% (FY25: 23.08%, FY24: 22.82%). High capital efficiency driven by backward integration and asset-light fabrication.

Multi-Period Trend Breakdown

FY26	FY25	FY24
ROCE is 21	23	22

OK

Basis for Offer Price, p.147

109

Growth vs peers

Tempsens delivered 27.23% revenue CAGR and 36.07% EBITDA CAGR over FY24-FY26, outpacing broader capital goods/industrial sector growth (~12-15%).

OK

Basis for Offer Price, p.147

110

Margins vs peers

FY26 EBITDA margin of 24.83% and PAT margin of 15.59% (Adjusted PAT margin 16.42%) reflect strong pricing power in customized thermal engineering.

OK

Basis for Offer Price, p.147

111

IPO price vs WACA / pre-IPO placement (the markup)

Issue price of ₹300 represents a 5.39x multiple over primary WACA (₹55.63 for promoter shares under Marathon scheme) and a huge multiple over selling shareholders' historical cost (₹Nil to ₹0.06).

Watch

Basis for Offer Price, p.150; Details of OFS, p.1

112

Is the premium justified by ROCE / ROE / growth / margins?

Valuation of ~36.0x P/E is fair to reasonable: justified by market leadership, 21.6% ROCE, 24.8% EBITDA margins, and positive FCF, but constrained by 85.4% OFS component.

Watch

Basis for Offer Price, p.145-151

113

What growth does the price implicitly assume?

The ₹300 pricing implicitly assumes Tempsens sustains 16-20%+ revenue CAGR and maintains 24%+ EBITDA margins as overseas subsidiaries and nuclear/defence capex scale up.

Watch

Basis for Offer Price, p.145-151; MD&A, p.468

LAYER 9 • STATED RISK ADMISSIONS

In The Company's Own Words: Stated Risk Admissions

Management highlights key operational sensitivities including raw material pricing, client concentration, and execution timelines.

#	Checkpoint	Your Finding (Prospectus Data)	Status	Page Ref
114	Top 5 risk factors the company itself lists	(1) Demand fluctuations in key sectors (metals/petrochem 41.1% of sales); (2) Exposure to Project/OEM capex cycles vs MRO; (3) Supplier concentration (India Trade Link 20.8%); (4) Geographic cluster in Udaipur (10 of 15 units); (5) High working capital (210 NWC days).	Watch	Risk Factors #1-#5, p.20-26
Where in DRHP: 'Risk Factors' Why It Matters: Management's own stated worries - read them first. Benchmark / Red Flag Trigger: - Exact Citation: Risk Factors #1-#5, p.20-26
115	Any genuine dealbreaker buried in boilerplate?	No catastrophic hidden dealbreakers. Key structural nuance: 85.4% of the IPO is OFS (₹555.00 cr) with promoters/group cashing out at near-zero acquisition cost, while company receives only ₹95 cr fresh capital.	Watch	The Offer, p.1; Objects, p.128
Where in DRHP: 'Risk Factors' Why It Matters: The serious risks hide among generic ones; find them. Benchmark / Red Flag Trigger: - Exact Citation: The Offer, p.1; Objects, p.128
116	Quantified risks (e.g. 'X would cut revenue by Y%')	Quantified sector exposure: Metals (19.68%) + Petrochemicals (21.45%) = 41.13% of FY26 revenue; Top 1 supplier accounts for 20.77% of purchases (₹54.15 cr); Imported raw materials account for 19.64% (₹51.20 cr).	Watch	Risk Factors #2, p.22; Risk Factors #4, p.24; Risk Factors #40, p.50
Where in DRHP: 'Risk Factors' Why It Matters: The risks management bothered to quantify are usually the real ones. Benchmark / Red Flag Trigger: - Exact Citation: Risk Factors #2, p.22; Risk Factors #4, p.24; Risk Factors #40, p.50
117	Going-concern or liquidity language anywhere?	No going-concern qualification, no debt default, and comfortable liquidity: Cash/equivalents & liquid investments of ₹60.67 cr and FY26 CFO of ₹42.02 cr easily service debt obligations.	OK	Auditor's Report, p.364; Balance Sheet, p.75; Cash Flow, p.77
Where in DRHP: Risk Factors / Auditor Why It Matters: A direct signal of survival risk. Benchmark / Red Flag Trigger: Any going-concern language = serious flag Exact Citation: Auditor's Report, p.364; Balance Sheet, p.75; Cash Flow, p.77

AUDIT TALLY • 117-CHECKPOINT RISK MATRIX

Red-Flag Dashboard: 117-Checkpoint Audit Tally

88

Checkpoints Clean (OK)

26

Watchlist Monitor Rows

0

High-Severity Red Flags

117

Total Forensic Checkpoints

L1 Story & Positioning

9 1 0

L2 Issue Structure & Objects

9 4 0

L3 Business Quality

14 4 0

L4 Financial Quality

25 3 0

L5 Governance

13 0 0

L6 Related Party Transactions

8 0 0

L7 Litigation & Regulatory

3 4 0

L8 Valuation

6 7 0

L9 The Company's Own Risk Factors

1 3 0

Layer 1: Story & Positioning

9 OK 1 Watch 0 Flag

Layer 2: Issue Structure & Objects

9 OK 4 Watch 0 Flag

Layer 3: Business Quality

14 OK 4 Watch 0 Flag

Layer 4: Financial Quality

25 OK 3 Watch 0 Flag

Layer 5: Governance

13 OK 0 Watch 0 Flag

Layer 6: Related Party Transactions

8 OK 0 Watch 0 Flag

Layer 7: Litigation & Regulatory

3 OK 4 Watch 0 Flag

Layer 8: Valuation

6 OK 7 Watch 0 Flag

Layer 9: The Company's Own Risk Factors

1 OK 3 Watch 0 Flag

How To Read This Risk Matrix

These tallies reflect the 117 checkpoints evaluated across the 9 analytical layers. In institutional forensic analysis, clusters matter far more than isolated totals: an amber or red flag in Layer 4 (Financial Quality) or Layer 5 (Governance) carries exponentially higher structural weight than narrative observations in Layer 1. Always evaluate flags against company peers and industry context.

Statutory Educational Compliance & Analyst Disclaimer

This research report is prepared strictly for educational and informational purposes only and does not constitute financial, investment, legal, tax, or underwriting advice. Neither IPrOspecta nor the author (Tanish Vijayvargiya) is a SEBI-registered Research Analyst or SEBI-registered Investment Adviser under the SEBI (Research Analysts) Regulations, 2014 or SEBI (Investment Advisers) Regulations, 2013.

Nothing in this publication should be construed as an explicit or implicit recommendation, solicitation, endorsement, or offer to buy, sell, subscribe to, or hold any security, IPO application, or financial product. Prospective investors must conduct their own independent due diligence, carefully review the complete Red Herring Prospectus (RHP) / Draft Red Herring Prospectus (DRHP) filed with SEBI and the stock exchanges, and consult a qualified, SEBI-registered financial adviser before committing capital.

Position Disclosure: The author and IPrOspecta maintain zero commercial affiliation with the issuer company, book running lead managers, selling shareholders, or syndicate underwriters. All opinions expressed represent personal analytical frameworks.