Zetwerk design-led contracts jump to 14% of manufacturing GMV

BENGALURU: IPO-bound Zetwerk is taking on more product-design work instead of only manufacturing to customer specifications. Original design manufacturing (ODM) contracts accounted for 13.9% of its manufacturing-business gross merchandise value (GMV) in FY26, up from 8.3% a year earlier.The share had risen gradually from 7.6% in FY23 to 8.1% in FY24 and 8.3% in FY25, before the sharper increase last year, the company’s updated draft IPO papers showed.Under an ODM contract, Zetwerk is responsible for designing a product in addition to manufacturing it. This differs from build-to-print work, where it produces components according to drawings and specifications supplied by a customer.GMV refers to the total value of goods and services transacted on Zetwerk’s platform, including taxes. It is not the same as revenue booked by the company.Zetwerk said it has developed in-house engineering and design capabilities for components used in transformers for AI data centres, process plant machinery, metal manufacturing and defence applications. It has also invested selectively in assembly and finishing facilities as larger customers sought more integrated manufacturing support.The company plans to expand ODM by hiring engineers, strengthening its design capabilities and building specialised production assets. It will focus on categories where design complexity can provide an advantage. Zetwerk said it will continue using its third-party supplier network for ODM projects instead of making all such products at its own facilities.It also plans to expand category-specific design libraries and standard product platforms that can be customised for different customers.The filing, citing a Redseer report commissioned by the company, said customers may pay a premium for design and product co-creation. Switching an ODM supplier can also require re-engineering, potentially making these customer relationships stickier.However, Zetwerk did not separately disclose the revenue or profitability of its ODM contracts. The contribution margin of its wider manufacturing business eased to 12.40% in FY26 from 13.43% in FY25, even as the ODM share increased.Manufacturing-business segment revenue rose to Rs 9,374.7 crore in FY26 from Rs 6,249. crore a year earlier. It accounted for 58.9% of Zetwerk’s revenue from continuing operations. Zetwerk’s proposed IPO comprises a fresh issue of up to Rs 2,600 crore and an offer for sale of up to 9.68 crore shares by existing shareholders.Get the latest Business News and Live updates. Download the TOI app.