Digilogic Systems IPO Analysis: Defence Tech Testing Leader

20 January 2026

Digilogic Systems Limited is coming up with its Upcoming IPO to raise ₹81.01 crore, including a fresh issue of ~₹69.67 crore and an OFS of ₹11.33 crore. 

Let’s explore further:

Parameter	Details
Issue Type	₹69.67 crore Fresh Issue and OFS of ₹11.33 crore
Issue Size	INR 81.01 crore.
Price Band	INR 98-104 per share
Lot Size	1,200 shares
Net Issue	73,99,196 Shares
Listing Platform	BSE SME
Issue Opens	January 20, 2026
Issue Closes	January 22, 2026
Listing Date	January 28, 2026

Before the Deep Dive: What’s Working — and What Isn’t

Strengths	Risks
Operates in a niche, high-entry-barrier defence testing & simulation segment	Revenue can be lumpy due to project-based and tender-driven execution
Strong profitability with ~19% EBITDA and ~11% PAT margins	High working capital–113 in FY25, due to government payment cycles
98–99% exposure to defence & aerospace—directly aligned with India’s strategic spending	High dependence on govt orders and procurement timelines
DcPP (DRDO) partner status improves credibility + tender advantage	Limited export presence reduces diversification and global growth hedge
Expansion plans for backward integration/manufacturing may improve margins over time	Valuation is not cheap–at 37x but still better than its peers

Now that you’ve seen the snapshot, let’s unpack the full story behind these numbers and understand the business in context.

Industry Outlook: India’s Defence & Aerospace Test, Measurement & Simulation (TMS) Growth Story

India’s Critical Test, Measurement & Simulation (TMS) market is basically the quality-gate behind India’s defence and aerospace push — it ensures complex mission critical systems work flawlessly before they ever go live. In FY25, the market touched ~₹4,799 Cr, growing at ~13% CAGR (FY19–FY25), driven by rising indigenous defence programs, heavier R&D spends, and ISRO’s expanding mission pipeline. 

The industry is built around high-value system & subsystem solutions like Avionic Test Systems, Radar Test & Evaluation, Automated Test Equipment (ATE), Checkout Systems, Actuator Test Systems, and Digital Receiver Systems, which are now in stronger demand due to next-gen platforms and electronic warfare upgrades. 

Policy tailwinds like Make in India and Atmanirbhar Bharat are accelerating domestic manufacturing and innovation, reducing reliance on imports. Structurally, this space has ~25–30 strategic electronic component manufacturers, with ~15 SMEs operating across horizontal (portfolio breadth presence across all segments) and vertical models (portfolio presence in less than 2 categories). Digilogic Systems holds ~1.5% of the total market share in FY25.

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