Tonbo’s Singapore links and reported Chinese sourcing raise questions over the extent of its supply-chain indigenisation
New Delhi: Tonbo Imaging is preparing to enter the public markets through its proposed IPO as India aggressively pushes defence indigenisation. Investors will assess the Bengaluru-based defence-technology company on the strength of its technology, order book and growth prospects. However, one fundamental question requires greater clarity before investors assign a valuation to the company: how indigenous is Tonbo’s supply chain, particularly for critical defence components?
Tonbo describes itself as an original equipment manufacturer that develops electro-optical, thermal-imaging, targeting, surveillance and guidance systems for military applications. The company has built significant technology capabilities, but its procurement structure, particularly its links with Singapore and China, warrants closer scrutiny as it moves towards the public markets.
At the centre of the issue is CEAQ Technologies Pte Ltd, a Singapore-based company formerly known as Tonbo Imaging Pte Ltd. Tonbo’s IPO documents identify CEAQ Singapore as an enterprise having substantial interest in the company. CEAQ Singapore holds a 26.77% stake in Tonbo Imaging India, while CEAQ Technologies Private Limited, the Indian group entity formerly known as Tonbo Imaging Private Limited, holds another 17.74%. Together, the two entities account for more than 44% of the company before the offer.
CEAQ Singapore also plays a role in Tonbo’s commercial ecosystem. Tonbo’s filings disclose related-party transactions involving purchases of project material and equipment from the Singapore entity. These transactions raise questions that investors would reasonably want the company to answer: What exactly does Tonbo purchase from CEAQ Singapore? Where do those products and components originate? And at what prices does the company procure them?
Trade databases add another layer to the issue. Volza records more than 11,500 import shipments into Tonbo Imaging India from 226 suppliers, including around 2,262 shipments attributed to China. By shipment count, Chinese imports account for roughly 19.65% of the recorded shipments, although this figure does not represent the value of procurement. Trading records also list Chinese optics companies such as Changchun Jstar Optics and Changchun Sunday Optoelectronics among Tonbo’s suppliers. CEAQ Singapore itself also appears in trade records as an exporter to Tonbo India.
Recent reporting on Tonbo’s revised DRHP has separately highlighted allegations concerning the procurement of critical components from Chinese OEMs through CEAQ Singapore. The allegations also questioned whether Tonbo secured certain contracts below raw-material cost to make its order book appear stronger. Tonbo has denied these allegations. Public trade databases alone cannot establish every transaction that may have taken place between China, CEAQ Singapore and Tonbo India, and that distinction remains important.
However, the allegations make greater transparency particularly important as Tonbo approaches its IPO. Investors need sufficient information to independently assess the company’s procurement structure, supply-chain risks and the economics behind its reported business.
Tonbo’s earlier DRHP disclosed an order book of around ₹266.57 crore comprising 36 firm orders. An order book can provide investors with visibility into future business, but its significance also depends on the economics of those contracts. Tonbo’s operating revenue increased from about ₹428.19 crore in FY24 to approximately ₹469.08 crore in FY25. However, revenue declined to around ₹362.65 crore in FY26. The company’s PAT also fell from approximately ₹72.76 crore to ₹50.88 crore.
The proposed IPO will consist entirely of an Offer for Sale of around 18.09 million shares. Tonbo Imaging will not receive fresh capital from the issue. CEAQ Technologies Private Limited plans to offer approximately 10.16 million shares, while CEAQ Singapore plans to offer around 4.90 million shares.
These disclosures do not, by themselves, establish wrongdoing. Foreign sourcing also does not automatically undermine an Indian defence company. Modern defence manufacturing frequently relies on international supply chains, and companies may source specialised components from multiple countries while developing and assembling systems in India.
The key issue for investors, therefore, is not simply whether Tonbo sources components from abroad. It is whether the company provides enough information for investors to understand the origin, importance and commercial terms of those components—particularly when it positions itself within India’s growing defence-indigenisation ecosystem.
Before the IPO, Tonbo should provide clear and verifiable information about the origin of its critical components, its procurement from CEAQ entities, related-party pricing, major suppliers, country-of-origin documentation and the margins generated on significant contracts. Such disclosures would allow investors to better assess the company’s operational independence, supply-chain resilience and exposure to geopolitical or sourcing risks.
SEBI should ensure that investors receive a complete and transparent picture of these issues. The Ministry of Defence should also examine whether critical defence systems supplied to the armed forces contain sourcing vulnerabilities that require further scrutiny.
The principle is straightforward: investors should not have to reconstruct a defence company’s supply chain through trade databases and allegations. Tonbo may well have the technology and capabilities to emerge as a valuable Indian defence-technology company. But before the public is asked to invest in that growth story, the company should provide the documents and disclosures needed to demonstrate exactly how Indian—and how independent—its supply chain really is.
