Digilogic Systems Limited, a technology company specializing in defence and aerospace solutions, is poised to make a significant mark in the public market with its upcoming initial public offering (IPO) worth ₹59.74 crores. The IPO will open for subscription on January 20, 2026, and close on January 22, 2026. Founded in 2011 and headquartered in Hyderabad, Digilogic Systems has established itself as a key player in the defence sector, focusing on Automated Test Equipment (ATE) systems, radar, and Electronic Warfare environmental simulators.
The company’s financial performance in FY2025 has been robust, showcasing a remarkable recovery from the previous year’s decline. Revenue from operations surged by 39.55% to ₹72.06 crores, while total revenue also increased by 39.55% to ₹72.19 crores. Profitability saw a significant boost, with net profit after tax (PAT) rising by 238.33% to ₹8.11 crores, and PAT margins expanding from 4.65% to 11.25%.
The fresh issue of ₹59.74 crores will be strategically allocated to three primary objectives. The largest portion, ₹51.74 crores, will fund the establishment of a new facility featuring 6,050 square meters of built-up area and an environmental test facility for electronic sub-systems. This new facility aims to enhance operational capabilities and reduce dependence on outsourcing, positioning the company for expanded capacity and improved margins. Additionally, ₹8.00 crores will be used for debt repayment, and the remaining amount will be directed towards general corporate purposes, growth opportunities, and working capital.
Digilogic Systems operates as a Development cum Production Partner (DcPP) in India’s defence and aerospace sector, providing end-to-end solutions including design, development, integration, and manufacturing of specialized equipment. The company’s key offerings include Automated Test Equipment (ATE) systems, radar and Electronic Warfare environmental simulators, application software and embedded signal processing solutions, and comprehensive support services. With AS9100D and ISO 9001:2015 certifications, Digilogic Systems serves customers through direct government contracts and third-party vendor relationships, with repeat customers representing 98.00% of revenue in H1 FY2025.
Despite its strong financial performance, Digilogic Systems faces several significant risk factors. Customer concentration is a primary concern, with the top three customers accounting for 70.92% of FY2025 revenue, creating substantial dependence on a limited client base. Operating cash flows have been volatile, turning negative ₹10.52 crores in FY2025 despite strong profitability. The company also experienced a cyber security incident resulting in a loss of ₹45.17 lakhs during FY2025. Both facilities are located in Hyderabad, which poses a geographic risk.
As of September 30, 2025, the company maintained a total asset base of ₹64.53 crores with shareholders’ equity of ₹35.07 crores. The current ratio stood at 2.08 times, indicating an adequate liquidity position. The IPO will significantly strengthen the capital structure, with the fresh issue expected to increase the equity base substantially while reducing debt levels through the planned ₹8.00 crore repayment.
Digilogic Systems presents a mixed investment proposition for potential investors. The company benefits from India’s increasing defence spending and indigenization initiatives, supported by over 18 years of industry experience and established government relationships. The strong financial recovery in FY2025 and planned capacity expansion through the new facility indicate growth potential. However, investors must carefully evaluate the customer concentration risks, cash flow volatility, and execution challenges associated with the new facility setup. The company’s dependence on government contracts also exposes it to policy changes and budget allocation variations. The investment appears suitable for risk-tolerant investors with long-term horizons who believe in India’s defence sector growth story.
Mike Armstrong, Managing Director of Stark UK, said both the UK and Germany were “world-leaders in new technology” and the expansion will help “define the battlefields of the future.”
“We need rapid and scalable production to protect our people, defend our sovereignty and deter aggression. That means resilient supply chains which stretch across Europe,” said Mr Armstrong.
Mr Armstrong said Stark, which was founded in 2024, wanted to take advantage of technological and defence expertise in the UK.
Swindon,