FX Multitech IPO Funds Manufacturing Shift Through Everest Chillers

FX Multitech Limited plans to use Rs 6.2578 crore of IPO net proceeds for machinery at its 51%-owned subsidiary, Everest Chillers Private Limited, moving beyond heating, ventilation and air-conditioning distribution into manufacturing. Everest Chillers currently has chiller capacity of about 9,000 tonnes of refrigeration, or TR, a year and proposes to raise it to about 15,000 TR.

How is FX Multitech funding its manufacturing shift?

FX Multitech is allocating Rs 6.2578 crore of IPO net proceeds to Everest Chillers for machinery, rather than stating that this allocation will expand its distribution operation. FX Multitech distributes heating, ventilation and air-conditioning, or HVAC, and industrial-refrigeration products through partnerships with manufacturers including Danfoss Industries Private Limited, Transfer Oil S.P.A., Testo India Private Limited and Honeywell Automation India Ltd. In Fiscal 2025, FX Multitech acquired a 51% stake in Everest Chillers as part of a strategic initiative to explore manufacturing and strengthen forward integration.

The funding is proposed as debt, including an inter-corporate loan, or another form decided by the board. A board resolution dated November 18, 2025, and an approval letter dated November 19, 2025, specify 6% annual interest payable yearly, a six-year moratorium from disbursement, and a single bullet repayment of principal after that period. FX Multitech says a loan agreement containing those terms will be executed before money is disbursed to Everest Chillers.

The quoted machinery budget is Rs 658.61 lakh, which is Rs 32.83 lakh above the Rs 625.78 lakh IPO-funded amount. Everest Chillers proposes to fund the excess from internal accruals, while goods and services tax, applicable taxes, freight, installation, foreign-exchange movements and contingencies, where applicable, are also to be met from its internal accruals. The manufacturing plan therefore requires both the proposed IPO deployment and subsidiary funding for costs outside the stated loan amount.

What does Everest Chillers add to FX Multitech's business?

Everest Chillers gives FX Multitech an existing manufacturing operation for customised industrial chillers, glycol chillers, chilled-water air conditioners and effluent chillers. FX Multitech owns 208,163 of Everest Chillers' 408,163 equity shares, or 51%. Munirathinamnaidu Ravichandran and Janakiranam Jansirani each own 100,000 shares, or 24.5%, and are stated not to be related to FX Multitech, its promoters, directors, promoter group or group company.

Everest Chillers operates in Coimbatore, Tamil Nadu, from a facility on about 1.06 acres with aggregate constructed area of about 32,000 square feet. The site includes an administrative building of about 1,504.32 square feet and a pre-engineered factory shed of about 25,949 square feet. Everest Chillers has completed an expansion of the existing factory shed by about 2,800 square feet, which is proposed for installation of additional machinery.

The existing plant includes hydraulic iron workers, tube-expanding machines, computer numerical control, or CNC, sheet-fibre laser-cutting machines, fin-stamping machines, tube-bending and drilling machines, laser-welding machines, forklifts and power-backup systems. This equipment supports manufacturing capacity of about 9,000 TR annually. TR measures cooling capacity, so the disclosed 9,000 TR and proposed 15,000 TR figures refer to annual production capacity rather than a sales forecast.

FX Multitech became the majority owner on January 10, 2025, when an outstanding loan was converted into equity through the allotment of 208,163 Everest Chillers shares. FX Multitech says the acquisition moves it from a pure distributorship model towards manufacturing, with the stated aims of improving product-quality control, reducing dependence on third-party manufacturers and optimising costs. Those stated outcomes depend on the proposed machinery being procured, installed and used in manufacturing operations.

Which products and capacity will the machinery support?

Everest Chillers proposes to increase chiller manufacturing capacity by about 6,000 TR annually, from about 9,000 TR to about 15,000 TR. The expansion plan covers chillers above 10 TR and up to 52 TR across four dedicated manufacturing lines based on capacity ranges. Everest Chillers also proposes an air-handling unit, or AHU, manufacturing facility with capacity of about 20,000 TR annually.

The proposed product additions are heat pumps, AHUs and fan-coil units. Everest Chillers also plans backward integration, meaning in-house production of components used in its own equipment, including polyurethane foam, or PUF, panels, condenser coils and evaporator coils. The company proposes to supply those components to other original equipment manufacturers, or OEMs, as well as use them in chillers and heat pumps.

The quoted equipment includes two sheet-metal fibre laser-cutting machines, a PUF foaming-machine system, two CNC press-brake machines, two hydraulic numerical-control shearing machines, a single-girder crane and crane power-feeding equipment. The PUF foaming-machine quotation was denominated in Singapore dollars and converted at Rs 75.43 per Singapore dollar, the rate published by State Bank of India on August 11, 2026. The stated Rs 658.61 lakh total excludes goods and services tax.

Everest Chillers had not entered definitive agreements or placed firm orders with the quoted suppliers when the prospectus was prepared. Quotations have specified validity periods, actual suppliers and procurement costs may vary, and final purchases remain subject to negotiations. Everest Chillers states that it does not intend to purchase second-hand machinery for this object.

What financial base does Everest Chillers bring to the expansion?

Everest Chillers reported revenue from operations of Rs 20.7603 crore for the financial year ended March 31, 2026, compared with Rs 17.7626 crore for the year ended March 31, 2025. Profit before tax increased to Rs 83.48 lakh from Rs 39.83 lakh, and profit after tax rose to Rs 61.58 lakh from Rs 34.62 lakh. The year-on-year comparison shows revenue increased by Rs 2.9977 crore and profit after tax increased by Rs 26.96 lakh before the proposed machinery purchase.

Net worth was Rs 4.1619 crore at March 31, 2026, compared with Rs 3.5462 crore a year earlier. Reserves and surplus increased to Rs 3.7537 crore from Rs 3.1381 crore, while return on net worth was 14.80% in Fiscal 2026 versus 9.76% in Fiscal 2025. Basic and diluted earnings per share were Rs 15.09 in Fiscal 2026, compared with Rs 14.06 in Fiscal 2025, based on audited restated financial statements.

The Rs 6.2578 crore proposed loan exceeds Everest Chillers' Fiscal 2026 profit after tax of Rs 61.58 lakh. The six-year principal moratorium means principal repayment is scheduled after the moratorium rather than from immediate annual cash generation, but Everest Chillers must still fund the Rs 32.83 lakh budget excess and other stated non-IPO costs from internal accruals. The financial effect of the expansion consequently depends on procurement costs, installation and operation of the new lines, and sales of the proposed products.

Conclusion

FX Multitech's stated manufacturing shift is centred on its majority-owned Everest Chillers subsidiary and a Rs 6.2578 crore IPO-funded machinery loan. The disclosed operational plan is to raise chiller capacity by about 67%, from 9,000 TR to 15,000 TR annually, add an AHU facility with about 20,000 TR of annual capacity, and make selected components in-house.

What to watch next is whether Everest Chillers executes the loan agreement, finalises supplier negotiations and places machinery orders, since no definitive vendor agreements or firm orders had been made. The company has disclosed a fire-safety licence valid until November 11, 2028 and a factory licence valid until December 31, 2028, while equipment-cost changes and non-IPO costs remain planned to be funded from subsidiary internal accruals.