Industrial Automation Firms Find a New Backer : The Stock Market

A change is taking place in the industrial automation market in India. As the firms that will construct the machines, robotic systems, control panels and factory technologies that will drive India’s manufacturing transformation seek to power up the nation’s manufacturing, they are increasingly heading for the capital markets themselves.

The newest one is Bengaluru-based industrial automation company Skytech Infinite Platform, its  SME IPO goes live August 14 for listing on NSE Emerge.

The IPO by Skytech is not an exception. From last year or so, industrial automation and related engineering companies have been getting more and more on the public markets with encouraging bids showing great interest pointing to a larger trend and the growing investor appetite..

The Automation Industry Has Become an Investment Story

Until now, automation in the Indian manufacturing sector was an invisible entity. The typical investor was familiar with the names of auto makers, pharmaceutical firms, electronics companies and infrastructure companies. Those companies that provided the technology behind smart factories were far less prominent. That is changing.

A research firm projects the market size of industrial automation in India at $17.28 billion in 2025 and is expected to grow to $38 billion by 2031. The market is getting support from factory modernization, the automation of brownfields, adoption of Industry 4.0, and decreasing the overall cost of technology adoption.  Meanwhile, Indian manufacturers are being pressured to raise productivity and be competitive when it comes to global value chains. 

Automation is no longer merely a means to cutting labor requirements. It is now more and more about enhancements in quality, traceability, uniformity, energy efficiency and production availability all making the enterprise far more agile, efficient , intelligent in most cases also resulting in better margins.  This presents a business opportunity for companies that develop and deploy automation systems. Structural opportunities are important for capital markets to notice.

Skytech Infinite’s IPO Is About More Than Raising Money

This recent ongoing IPO is a great example of some of the reasons why an automation company should go public. The company offers complete turnkey industrial automation solutions which include design, engineering, manufacture, supply, installation, commissioning and maintenance of automation control panels and integrated control systems.

The IPO, the company’s management states, will enhance its working capital, enable the company to undertake bigger projects and increase its footprint in the manufacturing, utilities, infrastructure and new geographies. That’s a big difference. The IPO can be a strategic lever beyond expanding the factory size and can provide an engineering business with the financial strength to accept a larger order book, innovate and even enter newer markets.

Why Automation Companies Need Capital

Industrial automation companies have a unique situation. They are technology companies, yet they likewise have a great deal of attributes of engineering and manufacturing firms. They have to keep engineering staff. They require manufacturing facilities. They buy industrial parts and softwares alike. They can require stock prior to getting repayment from clients. They have installation and commissioning staff. And bigger projects may require long periods of execution.

Hence, working capital is important. For a software firm, a digital product can be scaled with relatively limited additional physical infrastructure. That’s not always possible for an automation integrator. When a customer gives a project that says ₹20 crore, the company might have to buy equipment depending on its relations with the OEMs, hire engineers, service and  execute much before revenue realisation.

It can thus be a competitive advantage to have access to public capital. It helps companies to say yes for bigger projects. As manufacturers continue to add more automation to their production lines, warehouses, inspection systems and material-handling tasks, the size and complexity of their projects are growing.

Patil Automation Showed There Is Investor Appetite

The 2025 IPO of Patil Automation is an earlier example of the same. Based in Maharashtra, the company specializes in welding and line automation such as robotic welding lines, assembly lines, material handling and special purpose machinery. It has a large customer base that is closely associated with automotive manufacturing. 

Its IPO  fetched ₹69.61 crore, which was listed in NSE SME. It provides a direct investment opportunity for public-market investors to participate in India’s factory automation ramp-up. In particular, the automotive sector is increasingly using automation as it strives to achieve higher production volumes, increased consistency and more advanced vehicle platforms.

However, the opportunity is now expanding further from the automotive sector. Industries such as electronics, pharmaceuticals, food processing, logistics and chemicals and general engineering are all moving towards more automation. In conclusion, the automation sector has gained increased appeal as a long-term investment theme, thanks to this expanding customer base.

Then Came Adisoft and the Market Response Was Hard to Ignore

Adisoft Technologies took it a notch up, Its SME IPO of ₹74.1 crore that began in April this year,  attracted 72.09 times subscription and got listed on NSE Emerge.

High subscription volumes may be due to market structure and investor behaviour rather than long-term fundamentals. But the response shows one thing for sure: India’s industrial automation story has an audience of investors.

Will these businesses be able to make the demand for Industrial automation in India sustainable? Are they able to progress from the execution of projects to technology and recurring services? Are they able to handle working capital as they grow in size? Can they actually create companies that compete on a global stage and remain relevant when there are larger global automation companies in the same market?

Far from being a fleeting fashion it can be seen as the public market’s early days with the Indian industrial automation and technology industry.