Zetwerk Faces $1 Billion US Counterclaim From Ayr Energy

July 24, 2026 — Ayr Energy Inc., a California-based maker of custom power transformers, has filed counterclaims in the United States against Zetwerk Manufacturing Businesses Pvt Ltd and three affiliated entities, alleging trade secret theft and trademark misuse, and seeking damages of at least $1 billion along with an import ban on certain transformers. Zetwerk has rejected the allegations.

The escalation lands at a sensitive moment for Zetwerk, which received clearance from the Securities and Exchange Board of India this month for a proposed initial public offering. Litigation disclosures involving a company's overseas operations are typically scrutinised by investors ahead of a listing.

What has been filed, and where

According to accounts published by Business Standard, Inc42 and Outlook Business, Ayr Energy has moved on two fronts. Before the US International Trade Commission, it has asked the commission to open an investigation and issue a limited exclusion order barring the transformers named in the complaint from entering the United States, along with cease-and-desist orders covering their marketing, sale, and distribution.

Separately, in the Texas Business Court, Ayr is seeking monetary damages of no less than $1 billion, plus exemplary damages, disgorgement of profits, corrective advertising, and injunctive relief.

The filings name Zetwerk Manufacturing Businesses Pvt Ltd, Zetwerk Manufacturing USA Inc., Unimacts Global LLC, and KRYFS Power Components Ltd as respondents.

The allegations, and the denial

Ayr's filings allege that Zetwerk placed an individual at the startup under false pretences, that this person accessed confidential material relating to Ayr's transformer business without authorisation, and that the person left after roughly six weeks before joining Zetwerk to head a new transformer line. The filings further allege that Zetwerk subsequently marketed custom transformer capabilities it had not previously held, and ran online advertising that used the Ayr Energy name.

The claims listed include trade secret misappropriation, false advertising, trademark infringement, fraud, civil conspiracy, and unfair competition. None of the allegations has been tested in court.

Zetwerk has disputed them. In a statement to Outlook Business, the company said Ayr's complaint followed the withdrawal of an earlier Ayr claim in California that had gained no traction, and characterised the new action as a response to litigation Zetwerk had already brought. "We will prove these allegations in court," the company said.

A dispute that began in 2025

The Texas proceedings between the parties have been ongoing since October 2025, when Zetwerk Manufacturing USA and Unimacts Global sued Ayr Energy and its founder, Anirudh Reddy Edla, a former Zetwerk executive, in Texas, seeking $100 million in damages.

That petition alleged that Edla incorporated Ayr while still employed at Zetwerk, that Ayr recruited former Zetwerk and Unimacts staff, and that it drew on confidential information to win contracted orders. Ayr's attempt to have that case dismissed was rejected, according to Zetwerk. Ayr has not accepted those characterisations.

Why it matters

Both companies compete in the US market for grid and data-centre power equipment, where transformer lead times have tightened sharply. An ITC exclusion order, if granted, would restrict US entry of the products named — a commercial consequence that does not depend on the Texas damages claim succeeding.

Zetwerk, founded in 2018, has raised more than $700 million from investors including Peak XV Partners, Lightspeed, Accel, Khosla Ventures, and Baillie Gifford. Ayr Energy was founded in 2024.

Neither the ITC investigation nor the Texas proceedings has reached a determination. The story is developing.

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