New Delhi, May 13 -- Aditi Toys Pvt Ltd, a toymaker that recently secured funding from the Ahmedabad-based venture capital firm GVFL, intends to raise more money from investors to expand its business, a top executive told VCCircle.

The Rajkot-based company, started in 2015 by homeopath doctor-turned-entrepreneur Subhash Zala and his brother Arvind, raised Rs 36 crore ($3.8 million) in a round led by GVFL in March. It is now in talks with investors for a new funding round and has also appointed a central India-based investment banker for the purpose, Zala told VCCircle.

GVFL, one of the earliest VC firms in India having started in 1990 with support from the World Bank and the Gujarat government, invested Rs 20 crore in Aditi Toys.

Zala said the company intends to use the fresh funds for product development across its toy categories, as well as for branding, marketing, and servicing working capital requirements.

"We will probably look at raising Rs 50 crore for next year," he said, adding that the company will start pitching to new and existing investors in the next couple of months.

Aditi Toys manufactures plastic, electric, die-cast, silicon and wooden toys under the Chanak brand. It counts US toy company Hasbro, global entertainment major Disney-Marvel, London-based toy retailer Hamleys, FMCG firm ITC, snack firms Pratap Snacks and Haldiram's, retail chains Mr DIY, Lulu's, Vishal Mega Mart, Amazon, D-Mart, and FirstCry, and bookstore Crossword amongst its clientele.

Growth plans

The planned fundraising is part of the company's larger vision of listing on stock exchanges by 2030, Zala said.

By 2030, Aditi Toys also intends to increase its revenue to around Rs 500 crore, Zala said. In FY26, the toymaker recorded a 46% jump in revenue to cross Rs 100 crore amid efforts to increase the share of its retail revenue.

Zala said Aditi Toys began by importing toys for its promotional segment. In 2020, it started its own 2.25-lakh-square-foot manufacturing facility in Rajkot. It gradually increased its capacity and now makes over 200 stock-keeping units. It is one of the few Indian companies with an in-house tooling manufacturing unit.

The share of its retail business has gradually increased to 80%. It counts ITC, Pratap Snacks and Haldiram's amongst its clients in the promotional division, where smaller toys or freebies are offered as a promotion alongside a product by large FMCG companies. In addition, the company makes toys for multinational brands such as Disney-Marvel and Hasbro in the die-cast category.

Around 45% of Aditi's revenue comes from general trade and modern trade, while 20% comes from e-commerce and the remaining 20% from contracts with original equipment manufacturers and exports.

Zala is now looking at increasing the share of e-commerce in the revenue pie.

"Earlier, our focus was on general trade and modern trade. Now, we are focusing on e-commerce to be the main driver. We have set up a team to push e-commerce to about 30-40%," Zala said.

The company's EBITDA margin improved to 13% in FY26 from 11% the previous year. Net profit margins also jumped, to 6-7% in FY26 from around 2% the previous year.

"We have everything in-house, right from the tooling facility, production unit, ultrasonic welding machine, assembly line, from concept to final packaging, everything happens under one roof. Hence, we can control price and quality. This is our USP, and that's why we are subsidised in this market," Zala explained.

The Indian toy market reached $2 billion in 2025, according to a research report by IMARC, and is expected to more than double to $4.47 billion by 2034.

India has long relied on cheap imported toys, especially from China. While the Indian toy market remains largely unorganised, its reliance on cheap Chinese imports has dropped sharply. According to government data, India's toy imports in FY25 were $84.7 million, down 74% from $332 million in FY15. Policy initiatives such as a hike in customs duties on imported toys, stringent quality certifications and state-level toy clusters set up by the government have helped curb imports.

Published by HT Digital Content Services with permission from VC Circle.