IPO-bound Neolite ZKW is scaling up manufacturing capacity and electronics capabilities as automotive lighting evolves from functional component to high-value design differentiator.
17 Jan 2026 | 315 Views | By Kiran Murali
For many years, automotive lighting was treated simply as a functional necessity - to help drivers see and be seen. That perception has fundamentally changed. As modern vehicles become more design-led and electronics-heavy, lighting has emerged as one of the most visible and valuable components, playing a crucial and integrated ...
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For many years, automotive lighting was treated simply as a functional necessity - to help drivers see and be seen. That perception has fundamentally changed. As modern vehicles become more design-led and electronics-heavy, lighting has emerged as one of the most visible and valuable components, playing a crucial and integrated role in supporting the aesthetics and architecture of new vehicle designs.
IPO-bound Neolite ZKW Lighting Ltd is betting big on this shift, positioning itself to ride the trend and drive its next phase of growth. With the premiumisation trend accelerating the adoption of LEDs and electronics, and EV-led design changes and localisation taking centre stage, the Haryana-based automotive lighting company believes its next phase of growth will be driven more by value per vehicle.
"Lighting is the only product that combines a high level of engineering with aesthetics. It brings together design, performance and safety features. Very soon, we will stop calling it just lighting and start seeing it as electronics. As vehicles become more design-focused and technology-led, lighting has emerged as a key element of vehicle styling and brand identity. Carmakers are using lights to differentiate models, especially during facelifts, where changes to headlamps and tail lamps can significantly alter a vehicle's look," Rajesh Jain, Managing Director, said, explaining how the lighting market is evolving alongside the premiumisation trend.
Neolite ZKW Lighting began as a family-run automotive lighting business founded by the current promoter's father, an early player in India's auto lighting industry. The company took a key step in 2007 by partnering with Austrian lighting firm ZKW, now owned by LG Electronics, which holds a 26% stake.
The partnership with ZKW helped Neolite strengthen its technology capabilities as global carmakers entered the Indian market and meet the requirements of premium vehicle programs.
The collaboration was driven primarily by the need for advanced lighting technology as global OEMs entered India in the mid-2000s. Automakers were increasingly requiring Indian suppliers to align with global technology partners, making such partnerships essential for winning business. While the partnership was most active in the initial 5–6 years, the management notes that Neolite has since built significant in-house capabilities, accessing ZKW technology when required.
"There was a lot of influx of many global players from Europe and Japan into India, and we felt technology was getting difficult for us," Jain said. "OEMs often insisted on global linkages…Sometimes it was a prerequisite that you tie up with a particular global company; then we will give you the business."
The automotive lighting market, which is now estimated at over Rs 10,000 crore, has largely transitioned from halogen bulbs to full LED systems, with newer models adopting features such as animations, light guides and ambient lighting. Advanced systems like adaptive lighting, projection-based welcome features and digital light patterns are being used widely.
While premium passenger vehicles are adopting these technologies faster, commercial vehicles are following at a slower pace due to cost sensitivity, though LED adoption is steadily increasing across segments.
Neolite ZKW operates across commercial vehicles, passenger vehicles, two-wheelers, off-road and construction equipment. It claims a dominant position in commercial vehicle lighting, while passenger vehicles contribute more to revenue due to higher per-vehicle value.
While passenger vehicles have moved quickly to LEDs, commercial vehicles remain more price-sensitive. Adoption has been slower, but the direction is clear. Neolite claims a strong position in commercial vehicle lighting, which provides a steady base as passenger vehicle programmes scale up.
"Lighting in commercial vehicles is now slowly picking up. Tail lamps in commercial vehicles with LED are catching up very fast. High beams and low beams will take some time."
"Initially, lighting was one of the bulb functions, some of the LED functions. Now things are changing; they are coming with light pipes, light guides. Now it's full LED," Soni said. Features such as welcome projections, ambient lighting, adaptive beams and digital patterns are no longer confined to luxury vehicles. They are steadily moving into mass-market cars, especially electric vehicles.
Lighting content in a passenger vehicle has grown at a CAGR of around 14-16% over the last five years to around Rs 14,000, and has the potential to grow 8-10% over the next four years to Rs 21,000. For commercial vehicles, lighting content per vehicle has grown at a relatively moderate CAGR of 4-5% in the last five years to around Rs 4,500 and sees the potential to grow 8%-10% in the next four years to reach Rs 7,000.
Meanwhile, Neolite ZKW's business has changed significantly over the past two decades, with the company moving away from the replacement aftermarket to focus mainly on supplying vehicle makers directly. When the current leadership joined in the early 1990s, almost 95% of revenue came from the aftermarket. Today, that has flipped, with close to 90% of the business coming from OEM supplies.
"When I joined the business, 95% of the business was the replacement market. Then I wanted to convert the business and take it away from the aftermarket. That shift took over a decade. By 2004, the company had stopped developing products purely for the aftermarket. Today, about 90% of its revenue comes from OEM supplies, with the rest split between exports and limited aftermarket sales," Jain said.
At the same time, the company has moved beyond being a supplier of mainly plastic and mechanical lighting parts. As the industry shifted from halogen bulbs to LEDs, Neolite ZKW began making more of the electronics in-house, including control units and circuit boards. This has raised the value of lighting per vehicle and reduced reliance on outside suppliers, in line with the premiumisation of vehicles and the rise of EV-led designs.
One of the most significant changes within Neolite has been its expansion into electronics. Earlier, the company primarily manufactured lamp housings and relied on outside suppliers for bulbs and key components. "Five or ten years ago, we were essentially a plastic module manufacturer. Today, we are doing the electronics ourselves," said CEO Soni.
Neolite now makes circuit boards, light driver modules and control units in-house, reducing its reliance on overseas suppliers for mainstream LED systems and enabling it to tap government incentives under the PLI scheme.
The company clocked Rs 512 crore in revenue from operations during the financial year 2025, with exports accounting for around 46%. Net profit for the year stood at Rs 53 crore, with an operating profit margin of around 18%. Sources familiar with the company said the company is looking to more than double its revenue by the end of this decade.
To support this growth, Neolite is stepping up capacity expansion. The company operates multiple plants in Bahadurgarh, has recently commissioned a new facility in Pune, and is planning to set up its fifth plant this year. "The Pune plant has come up in the last two months, and the Chennai facility will follow next year. Each new plant involves investments of over Rs 200 crore, and our total capex requirement will be upward of Rs 500 crore in the coming years," he said.
To fund this expansion, the company is exploring multiple options, including equity raising and an IPO. Neolite has filed papers for a Rs 600 crore IPO, which comprises a Rs 400 crore fresh issue and a Rs 200 crore offer for sale. The company will use Rs 152.51 crore from the fresh issue to set up a new greenfield manufacturing facility at Kancheepuram, Tamil Nadu.