Shivganga Drillers IPO

Shivganga Drillers Limited IPO Strengths

Diversified Service Portfolio and Market Adaptability

Shivganga Drillers Limited has strategically transitioned from a pure-play driller to a comprehensive oilfield solutions provider. Its service offerings span onshore drilling, offshore operations & maintenance (O&M), and equipment rental. This diversification reduces reliance on any single segment, enhances resilience across industry cycles, and allows the company to address varied client needs. The adoption of flexible models, including performance-based per-meter contracts, aligns its incentives with project success, providing clients with cost predictability and improved operational efficiency.

Robust Project Execution and Modern Equipment Base

The company operates a modern fleet of five high-capacity rigs (525 HP to 1000 HP), with an average age of 5.58 years, minimizing downtime and major overhaul costs. Its integration of advanced Air-Hammer Drilling technology with conventional methods enables efficient operations in hard rock formations. This combination of a young, technologically capable fleet and proprietary technical know-how positions Shivganga Drillers to execute complex projects with high precision and efficiency, comparable to international standards.

Established Relationships and Strong Order Book

Shivganga Drillers has fostered enduring, decade-long relationships with major upstream players like ONGC, Sun Petrochemicals, and others. This reputation for reliability and technical expertise has translated into multi-year rate contracts and a robust order book. As of November 30, 2025, the pending order book stood at approximately ₹8,003 million, providing clear revenue visibility and predictable cash flows, underscoring its status as a trusted partner in India’s oil and gas exploration landscape.

Experienced Leadership and High Operating Standards

The company is guided by promoters and a management team with over two decades of cumulative experience in drilling and oilfield services. This is complemented by a skilled workforce proficient in advanced systems. A steadfast commitment to quality and safety is evidenced by the complete triad of ISO 9001, 14001, and 45001 certifications, membership in the IADC, and an impressive Lost Time Injury (LTI)-free streak, which has earned it industry recognition like the Safety Excellence Award 2025.

Strong Financial Performance and Executional Capabilities

Shivganga Drillers has demonstrated remarkable financial growth and operational efficiency. Revenue surged from ₹600.13 million in FY23 to ₹3,544.48 million in FY25, while PAT margins expanded from 6.53% to 17.59%. Superior return ratios, with RoE at 44.86% and RoCE at 54.50% for FY25, highlight exceptional capital efficiency and profitability. These metrics reflect disciplined execution, effective cost management, and the ability to deliver complex projects profitably.

More About Shivganga Drillers Limited

Company Evolution and Technological Edge

Shivganga Drillers Limited was incorporated in 2005 in Dehradun, founded on the vision to overcome limitations of conventional drilling in complex terrains. A pivotal shift occurred in 2006 with the import of its first high-capacity Canadian rig and the adoption of Air-Hammer Drilling technology. This technique, which uses compressed air for percussive action, provides superior penetration rates in hard rock like basalt and sandstone. The company successfully demonstrated this efficiency in collaboration with a PSU, leading to a decade-long contract and solidifying its entry into the oil & gas sector.

Service Portfolio and Business Model

The company’s operations are organized into three key segments:

• Onshore Drilling Services: The core business, contributing over 80% of revenue, involves drilling and integrated project management for oil and gas wells.

• Offshore O&M Services: Maintenance, repair, and operations services for offshore rigs, a growing segment.

• Equipment Rental Services: Hiring out specialized drilling equipment to other operators.

Shivganga Drillers pioneered a shift from traditional equipment rental models by introducing performance-based “per-meter” drilling contracts. This model ties contractor payment to pre-agreed KPIs like meters drilled, transforming the company from a service provider to a solution partner focused on reducing clients’ overall drilling costs and time.

Fleet and Geographic Presence

The company owns a fleet of five rigs with capacities ranging from 525 HP to 1000 HP, sourced from leading manufacturers in Canada, the USA, and China. The recent acquisition of a Nabors 1000 HP rig further enhances capability. With an average fleet age of 5.58 years against a typical lifespan of 25-30 years, the company benefits from high reliability and low near-term capex. Its operations span eight Indian states, supported by site offices in Gujarat, Maharashtra, Assam, and Madhya Pradesh, ensuring logistical proximity to key hydrocarbon basins.

Clients and Market Position

The company caters primarily to India’s upstream drilling market, serving marquee public and private sector clients including ONGC, Sun Petrochemicals Private Limited, Antelopus Selan Energy Limited, and GNRL Oil & Gas Limited. Based on FY25 revenue, Shivganga Drillers holds an estimated 1.5% market share in the Indian onshore drilling services segment. Its competitive positioning is strengthened by its technology-driven approach, young fleet, and proven execution track record in challenging projects.

Industry Outlook

The Indian drilling services market is on a steady growth trajectory, driven by the nation’s imperative for energy security. With over 85% dependence on crude oil imports, government policies like the Hydrocarbon Exploration and Licensing Policy (HELP) and Open Acreage Licensing Policy (OALP) are incentivizing domestic exploration and production (E&P).

• Market Size & Growth: The market expanded from USD 1,331 million in 2020 to USD 2,214 million in 2024 at a CAGR of 13.5%. It is projected to reach USD 2,856 million by 2030, growing at a 4.6% CAGR from 2025-2030.

• Segment Dominance: Onshore drilling continues to dominate, holding over 85% market share. However, offshore drilling, particularly in deepwater basins like Krishna-Godavari, is expected to see gradual growth with higher investments.

• Key Growth Drivers:

• Government Focus: Push for energy self-sufficiency and reducing import dependency.

• Technology Adoption: Increasing use of directional/horizontal drilling, automation, and real-time monitoring to improve efficiency and access complex reserves.

• Contract Model Shift: A move from traditional “hire-and-charge” models towards performance-based contracts (growing from 24.8% in 2020 to a projected 28.3% by 2030), which align contractor rewards with operational outcomes.

• Fleet Modernization: Aging Indian rig fleet creates demand for newer, high-capacity rigs capable of deeper and more complex drilling.

For Shivganga Drillers, the focus on Air-Hammer Drilling for hard rock formations and performance-based contracts aligns perfectly with industry trends favoring specialized technology and cost-efficient, outcome-oriented services.

How Will Shivganga Drillers Limited Benefit

• The company’s existing expertise in performance-based and per-meter drilling contracts aligns with the industry’s shift away from traditional hire models, allowing it to attract clients seeking cost predictability and efficiency.

• Government policies (HELP, OALP) aimed at boosting domestic E&P activity will directly increase demand for drilling services, benefiting Shivganga Drillers as an established contractor.

• The industry’s need for fleet modernization and higher-capacity rigs plays to the company’s strength, as its young fleet and IPO-funded acquisition of new 1000 HP and 1500 HP rigs position it to capture high-value, complex projects.

• Growing focus on offshore exploration and development, especially in deepwater basins, presents an expansion opportunity for the company’s nascent but growing Offshore O&M services segment.

• The increasing adoption of advanced technologies like automation and directional drilling creates an opportunity for Shivganga to further integrate such systems, enhancing its competitive edge and operational margins.

• The strong emphasis on safety and reducing Lost Time Injuries (LTI) in the industry aligns with the company’s exemplary safety record and certifications, making it a preferred partner for risk-averse clients.

• The sustained dominance of the onshore drilling segment, which contributes the bulk of its revenue, ensures a stable and growing core market for its services.

Peer Group Comparison

Name of Company	Face Value (₹)	Revenue (₹ million)	EPS (₹)	NAV (₹)	P/E Ratio	RoNW (%)
Shivganga Drillers Limited	10.00	3,544.48	11.64	25.88	TBD	44.86%
Peer Group
Deep Industries Limited	5.00	5,761.30	(14.08)	284.31	N.A.	(4.33)%
Asian Energy Services Limited	10.00	4,650.38	9.79	89.18	27.36	10.58%

Key Strategies for Shivganga Drillers Limited

Fleet Expansion with High-Capacity Rigs

Shivganga Drillers Limited plans to strategically expand its operational capabilities by deploying a portion of the IPO proceeds to acquire three new high-capacity rigs—one of 1,500 HP and two of 1,000 HP. This expansion is aimed at enabling the company to undertake deeper, more complex, and technically challenging drilling projects. By enhancing its fleet with modern, advanced rigs, the company seeks to improve rig utilization, capture high-value contracts, and strengthen its competitive positioning in the market to meet evolving client demands.

Diversification of Service Offerings

The company intends to diversify its revenue streams by actively expanding its Offshore Operations & Maintenance (O&M) and equipment rental service segments. This strategic move is designed to reduce reliance on the core onshore drilling business, mitigate risks associated with market cyclicality, and build a more resilient and balanced business model. By offering a comprehensive suite of oilfield services, Shivganga Drillers aims to enhance client value and ensure more predictable and stable revenue inflows over the long term.

Strengthening Long-Term Client Partnerships

A core strategy involves deepening and leveraging its long-standing relationships with major Public Sector Undertakings (PSUs) and private operators. The company aims to transition from being a transactional service provider to a trusted strategic partner. This will be achieved through consistent performance, adherence to the highest safety standards, and adopting collaborative planning. The focus is on securing more long-term rate contracts and repeat business, which ensures sustainable growth and provides strong revenue visibility.

Financial Optimization and Balance Sheet Strengthening

Shivganga Drillers is committed to optimizing its financial health. A significant portion of the IPO proceeds (₹855 million) is earmarked for the repayment/prepayment of borrowings. This strategic step is expected to reduce interest costs, enhance liquidity, and improve the debt-to-equity ratio. A stronger, more efficient balance sheet will provide the company with greater financial flexibility to fund future growth initiatives, manage working capital effectively, and improve overall shareholder value.