Atomberg Technologies is using the engineering capabilities developed in its ceiling fan business to expand into other consumer-durables categories, seeking to diversify faster than incumbents that have traditionally relied on acquisitions and gradual expansion.
The Mumbai-based company, which filed its draft red herring prospectus (DRHP) on August 20 to raise Rs 450 crore through a fresh issue alongside an offer for sale of 76.54 million shares, has earmarked none of the fresh capital for acquisitions. Instead, it plans to invest in research and development, brand building and debt repayment.
The approach is different from that followed by established consumer-durables companies. Havells entered air-conditioners through its acquisition of Lloyd, while Crompton expanded into kitchen appliances through its purchase of Butterfly Gandhimathi. Polycab has also spent more than a decade extending its business from cables into fans, lighting and switches. These companies, however, had profitable core businesses to support the cost of entering new categories.
Atomberg is attempting to diversify while its own core business is still relatively concentrated. Its fan business generated Rs 1,152.53 crore in external revenue in FY26, accounting for 89.08% of consolidated turnover, while segment profit before exceptional items nearly doubled to Rs 135.30 crore. According to Redseer data cited in the prospectus, Atomberg has a 46.08% share of the premium fan market and 16.81% of the online fan market.
The fan category itself still has considerable room for growth. BLDC motors account for only 17% of the Rs 21,400-crore fan market, a share Redseer expects to reach 38-41% by FY31. Atomberg’s assembly lines at Chakan operated at 67.42% utilisation in FY26. The company, therefore, is expanding into adjacent categories even though its principal business continues to have a significant growth opportunity.
Engineering-First Strategy
Its strategy is to reuse the technology developed for fans across products. Atomberg invested Rs 86.79 crore, or 6.71% of revenue, in R&D in FY26, compared with an industry average of less than 1%, according to estimates cited in the prospectus. Its proprietary motors, electronics and control algorithms are being adapted for mixer grinders, juicers and chimneys, while other products draw on capabilities in filtration, connectivity and thermal engineering.
There are some early signs of traction. Revenue from kitchen appliances increased 6.4 times to Rs 124.04 crore in FY26, while the segment loss narrowed from 277.55% of revenue in FY24 to 34.89% in FY26. Further, 28.50% of fan buyers subsequently purchased another Atomberg product, indicating scope to sell multiple categories to the same customer.
Financial Strain
The expansion, however, is putting pressure on the company’s finances. The kitchen-appliances business reported a segment loss of Rs 43.28 crore in FY26, while the proprietary components business lost Rs 37.38 crore on external revenue of Rs 17.20 crore. Together, the new businesses absorbed about 60% of the fan segment’s profit, contributing to a consolidated Ebitda loss of Rs 33 crore and a net loss of Rs 148.88 crore.
This is the main difference between Atomberg and the incumbents whose diversification strategies it is seeking to accelerate. Havells, Polycab and Crompton had established profit pools to fund expansion into new categories. Atomberg is having to build those businesses while simultaneously financing their losses. Borrowings raised to fund its components subsidiary have also resulted in a breach of financial covenants, according to the prospectus.
The question for Atomberg, therefore, is whether its engineering-led model can make diversification materially faster and less capital-intensive than the acquisition-led approach of established players. Its proposed joint venture with Voltas to manufacture air-conditioner compressors, along with its expansion into components, shows that the strategy extends beyond a handful of adjacent consumer products.