- Atomberg's Profitable Core: The Home Appliances Business
- Why Are Atomberg's Other Businesses Losing Money?
- Marketing and R&D: The Cost of Building a Bigger Brand
- How Will Atomberg Use the ₹450 Crore Fresh Issue?
- Our Take
Atomberg Technologies has received SEBI's observations for its proposed IPO, bringing the smart appliance maker closer to its stock market debut. The IPO comprises a fresh issue of up to ₹450 crore and an offer for sale (OFS) of up to 7.65 crore equity shares by existing investors. Interestingly, founders Manoj Kumar Meena and Sibabrata Das are not selling any shares in the proposed IPO.
But the more interesting part of Atomberg's IPO story lies in its financial performance. The company generated revenue of ₹1,293.77 crore in FY26, an increase of 34.8% over FY25. Yet, its net loss widened from ₹117.40 crore to ₹148.88 crore.
So, why is a company growing its revenue rapidly still reporting losses? The answer becomes clearer when we look at its three business segments. Atomberg has built a profitable home-appliances business, but its newer businesses are still losing money as the company expands.
Atomberg's Profitable Core: The Home Appliances Business
Atomberg started with energy-efficient BLDC ceiling fans (smart fans) and gradually expanded its home-appliances portfolio to include products such as smart locks.
This remains its biggest business. In FY26, the Home Appliances segment generated approximately ₹1,157.98 crore in revenue and reported a segment profit of ₹135.3 crore, translating into a segment margin of 11.68%.
The company also reported a product margin of 42.97% in FY26. In simple words, this means that for every ₹100 of product revenue, Atomberg retained approximately ₹43 after accounting for the cost of the products sold, before other operating expenses.
Its proprietary motor technology and product engineering help differentiate its appliances. Atomberg has also established a strong position in the premium fan market, with an estimated 46.08% market share by sales value in FY26, according to the Redseer report.
However, there is an important distinction: a profitable segment does not mean the entire company is generating enough cash to fund its expansion. To understand the overall losses, we need to examine Atomberg's other businesses.
Why Are Atomberg's Other Businesses Losing Money?
Atomberg operates two additional segments: Kitchen Appliances and Proprietary Components. Both reported losses in FY26.
1. Kitchen Appliances: Building a business beyond fans
Atomberg has expanded into products such as mixer grinders, water purifiers and cold-pressed juicers. This segment generated ₹124.04 crore in FY26 revenue but reported a segment loss of ₹43.28 crore.
The challenge is that entering a new product category requires more than developing the product. The company must also build distribution, customer awareness and after-sales service. These expenses can weigh on profitability until sales reach a sufficient scale.
2. Proprietary Components: Selling technology to other businesses
Through its subsidiary, Atomberg also manufactures motors, controllers and other components for business customers. This segment generated ₹156.37 crore in FY26 revenue but reported a loss of ₹37.38 crore.
The opportunity here is to use its engineering capabilities beyond its own consumer products. However, manufacturing components for other companies also requires investment in production capacity and the ability to secure enough orders to utilise that capacity efficiently.
Together, these two segments reported losses of approximately ₹80.66 crore in FY26. This shows that Atomberg's expansion beyond its established home-appliances business is still putting pressure on its overall profitability.
Marketing and R&D: The Cost of Building a Bigger Brand
There is another important part of Atomberg's financial story.
The company spent ₹135.35 crore on advertising and sales promotion in FY26, equivalent to 10.46% of revenue. It also spent ₹86.79 crore on research and development (R&D), or 6.71% of revenue.
These expenses support two different goals. Marketing helps Atomberg reach more customers and build brand recognition, while R&D helps it develop new products and improve existing technology.
Both can support long-term growth, but they also increase the cost of running the business.
This is why investors should look beyond revenue growth and examine whether these investments eventually translate into higher sales, better margins and sustainable profits.
How Will Atomberg Use the ₹450 Crore Fresh Issue?
The proposed IPO also gives investors an idea of where management wants to take the business next.
Atomberg plans to use the fresh issue proceeds for:
- ₹150 crore: Brand awareness and performance marketing.
- ₹100 crore: Research and development.
- ₹90 crore: Repayment or prepayment of borrowings.
- Remaining amount: General corporate purposes.
The marketing and R&D allocations indicate that the company wants to continue investing in brand expansion and product development. The debt repayment allocation, meanwhile, could reduce its borrowing burden and future interest costs.
The IPO also includes an OFS, through which existing investors can sell part of their holdings. Unlike the fresh issue, the OFS proceeds will go to those selling shareholders, not to Atomberg.
Investors can understand this distinction better through our guide to different types of IPOs.
Our Take
Atomberg has demonstrated that it can build a sizeable business in premium fans. It is now trying to use its technology, brand and distribution network to enter more appliance categories.
However, its financial performance highlights an important challenge. While its Home Appliances segment is profitable, its Kitchen Appliances and Proprietary Components businesses are still loss-making.
There is also a cash-flow consideration. Despite reporting a profitable home-appliances segment, Atomberg recorded negative cash flow from operating activities of approximately ₹218.98 crore in FY26. This means investors should not assume that segment profits automatically translate into cash available to fund expansion.
The key question, therefore, is whether Atomberg can scale its newer businesses, improve cash generation and turn its overall operations sustainably profitable.
If it succeeds, its established fan business could provide a strong foundation for a broader consumer-appliance company. But if expansion costs and cash requirements remain high, revenue growth alone may not be enough to create shareholder value.
The company's valuation, when announced, will be another important factor in deciding whether investors are being offered this growth opportunity at a reasonable price.
For investors tracking other companies preparing to enter the market, INDmoney's Upcoming IPOs page provides a broader view of upcoming public issues.