Ardee Industries IPO (5-7 August) Analysis

IPO Analysis | BSE and NSE Main Board | 100% Book Built Offer (Fresh Issue and Offer for Sale) | Regulation 6(1)

Based on Red Herring Prospectus dated July 27, 2026 | Lead Recycling and Manufacturing of Pure Lead and Lead Alloys | New Delhi

STATUS: LIVE RHP, ANCHOR BID AUGUST 4, BIDDING OPENS AUGUST 5 AND CLOSES AUGUST 7, 2026

Fresh Issue: up to Rs.3,200 Million | Offer for Sale: up to 1,99,75,000 Equity Shares by 2 Promoters (Nil WACA) | Main Board Listing on BSE and NSE

RoNW of 57.46% (FY26) Dramatically Exceeds All 3 Listed Peers (15% to 22%) | PAT Grew Nearly 9.5x Over 2 Years | Debt-Equity Ratio Cut from 4.87x to 1.25x

 Ardee Industries Limited was originally incorporated as Ardee Industries Private Limited on September 16, 1993 in Chennai, Tamil Nadu, and converted to a public limited company on May 6, 2025. Its CIN is U24294DL1993PLC405804, with its registered office in Mehrauli, New Delhi. The Promoters are Sandeep Aggarwal, Nikunj Aggarwal and Esha Gupta.

The Company recycles lead and manufactures pure lead and lead alloys using recyclable materials such as battery scrap, remelted lead ingots, remelted lead blocks, lead scrap and lead master metal, producing pure lead at purity levels of 99.97% to 99.985% for customers in the battery and metal industries.

A large share of the Company's battery-industry revenue comes from Amara Raja Energy & Mobility Limited, one of India's largest lead-acid battery manufacturers. The Company has an installed production capacity of 104,025 MTPA as of FY 2026, nearly double the 54,750 MTPA it held in FY 2024, and derived 39.83% of FY 2026 revenue from exports.

Revenue from operations grew from Rs.4,629.59 million in Fiscal 2024 to Rs.11,676.53 million in Fiscal 2026, a 2 year CAGR of 58.81%, while PAT grew from Rs.89.54 million to Rs.846.81 million over the same period, a 2 year CAGR of 207.52%, nearly a 9.5 times increase. This growth has been accompanied by a sharp improvement in balance sheet leverage, with the Debt-Equity ratio falling from 4.87 times in FY 2024 to 1.25 times in FY 2026, discussed further in Section 4.

Key Basics

Particulars	Details
Document Type	Red Herring Prospectus (RHP) dated July 27, 2026. This is a live offer: Anchor Investor Bid Tuesday, August 4, 2026, Bid or Offer opens Wednesday, August 5, 2026 and closes Friday, August 7, 2026.
Issue Structure	100% Book Built Offer comprising a Fresh Issue of up to Rs.3,200 million by the Company and an Offer for Sale of up to 1,99,75,000 Equity Shares by 2 Promoter Selling Shareholders. Face value Rs.2 per share, notably lower than the more common Rs.10 face value seen elsewhere in this series.
Face Value	Rs.2 per Equity Share.
Promoters	Sandeep Aggarwal, Nikunj Aggarwal and Esha Gupta.
Selling Shareholders and WACA	2 of the 3 Promoters are Selling Shareholders, each offering up to 99,87,500 Equity Shares: Sandeep Aggarwal and Nikunj Aggarwal, both at a Weighted Average Cost of Acquisition of Nil (Rs.0), meaning their entire Offer for Sale proceeds represent pure gain with no cash cost basis.
Eligibility Route	Regulation 6(1) of the SEBI ICDR Regulations, 2018, the standard main board profitability-based eligibility route.
Listing Exchange	Main board listing on both National Stock Exchange of India (NSE) and BSE Limited; NSE is the Designated Stock Exchange.
BRLM	Pantomath Capital Advisors Private Limited.
Registrar	KFin Technologies Limited.
Bid or Offer Dates	Anchor Bid: Tuesday, August 4, 2026. Opens: Wednesday, August 5, 2026. Closes: Friday, August 7, 2026.
Listed Peers, One Line	3 listed peers in lead recycling and metal recovery (Gravita India, Pondy Oxides and Chemicals, Jain Resources Recycling), all with materially lower RoNW than the Company.

The most notable structural feature of this offer is that both Promoter Selling Shareholders, Sandeep Aggarwal and Nikunj Aggarwal, are exiting at a Weighted Average Cost of Acquisition of Nil, meaning their entire sale proceeds represent pure gain with no original cash cost basis. The Company's unusually low Rs.2 face value and its exceptionally high RoNW relative to peers (detailed in Section 5) also distinguish this offer from others in this report series.

How Will the IPO Money Be Used?

Object	Estimated Amount (Rs. Million)	Substantiation
Funding incremental working capital requirement	2,200.00	A specific rupee figure disclosed; not independently appraised by any bank or financial institution, based on internal management estimates.
Repayment and/or prepayment of certain borrowings	200.00	A specific rupee figure disclosed; the summary reviewed here does not include a lender-by-lender certified schedule of the kind seen in some other reports in this series.
General corporate purposes	[TBD]	Capped at 25% of Gross Proceeds. No further breakdown provided, as is standard.

This Issue has no capital expenditure Object: the entire identified use of Net Proceeds is working capital and modest debt repayment, consistent with the Company's rapid recent revenue growth (which itself drives higher working capital needs in a commodity trading and processing business) and its ongoing deleveraging trajectory. As with all RHPs at this stage, the fund requirements have not been independently appraised, and the Gross Proceeds, Net Proceeds and General Corporate Purposes figures remain undetermined until the Offer Price is fixed.

Financial Performance

P&L and Key Metrics (Rs. Million unless stated)

Particulars	FY 2026	FY 2025	FY 2024
Revenue from Operations	11,676.53	7,427.35	4,629.59
EBITDA	1,470.82	659.34	280.57
EBITDA margin (%)	12.60	8.88	6.06
Profit after tax	846.81	332.71	89.54
PAT margin (%)	7.25	4.48	1.93
Return on net worth / RoNW (%)	57.46	53.15	30.61
Return on capital employed (%)	44.26	25.17	12.83
Net worth	1,473.80	626.01	292.49
NAV per equity share (Rs., FY26)	5.78	N/A	N/A
Export revenue (%)	39.83	37.03	17.63

Balance Sheet and Cash Flow Highlights (Rs. Million)

Particulars	FY 2026	FY 2025	FY 2024
Total borrowings	1,827.48	1,657.66	1,423.60
Debt to equity ratio (times)	1.25	2.65	4.87
Net cash from / (used in) operating activities	298.25	78.40	(252.62)
Net cash used in investing activities	(197.74)	(228.66)	(272.02)
Net cash from financing activities	38.36	133.43	543.52

This is one of the fastest-growing and most rapidly deleveraging companies in this report series. Independently recomputed, revenue grew approximately 60.4% in FY25 and a further 57.2% in FY26, reconciling with the RHP's own stated 58.81% 2 year CAGR, while PAT grew from a modest Rs.89.54 million in FY 2024 to Rs.846.81 million in FY 2026, an increase of nearly 9.5 times, driven by margin expansion (EBITDA margin more than doubling from 6.06% to 12.60%) as well as volume growth from expanded production capacity.

RoNW climbed from 30.61% to 57.46% over the same period, and at 57.46% is dramatically higher than any of the Company's 3 disclosed listed peers, discussed in Section 5.

The Company's own Risk Factors disclose a Debt-Equity ratio that was very high in FY 2024 (4.87 times) before falling sharply to 2.65 times in FY25 and 1.25 times in FY26, a genuinely improving trend rather than a static concern, coinciding with the Company's operating cash flow turning positive: FY 2024 saw negative operating cash flow of Rs.(252.62) million, but this reversed to positive Rs.78.40 million in FY25 and a stronger Rs.298.25 million in FY26.

Investing cash flow has been negative in all 3 years, consistent with the Company's capacity expansion from 54,750 MTPA to 104,025 MTPA over the period, funded by a mix of borrowings and, in earlier years, financing inflows.

How Does It Compare to Peers?

Company	Revenue FY26 (Rs. Million)	Diluted EPS (Rs.)	P/E (times)	RoNW (%)	NAV/Share (Rs.)
Ardee Industries Limited	11,676.53	3.32	N/A (Price TBD)	57.46	5.78
Gravita India Limited	42,652.70	52.02	35.37	15.43	332.16
Pondy Oxides and Chemicals Limited	29,583.61	43.98	31.94	16.73	258.39
Jain Resources Recycling Limited	95,431.13	10.25	33.57	22.25	45.24

The RHP discloses 3 listed peers in lead recycling and metal recovery, all substantially larger than Ardee Industries by revenue, ranging from roughly 2.5 times to 8.2 times the Company's own FY 2026 revenue. The most striking comparison is RoNW: Ardee's 57.46% is dramatically higher than all 3 peers, which range from 15.43% (Gravita India) to 22.25% (Jain Resources Recycling), meaning Ardee generates more than double the return on shareholder equity of even its best-performing peer.

The industry average P/E across the disclosed peer set is 33.63 times, with a narrow range of 31.94 to 35.37 times; Ardee's own P/E cannot yet be calculated pending Offer Price determination. While this RoNW gap is a striking positive, investors should note it partly reflects Ardee's smaller, more recently built-up equity base relative to larger, more mature peers, a dynamic that can inflate RoNW for fast-scaling smaller companies.

Key Risks

l Revenue is heavily concentrated by end-user industry: battery and metal industries together contributed 84.79% of FY 2026 revenue, and a large share of battery-industry revenue comes from a single customer, Amara Raja Energy & Mobility Limited, exposing the Company to concentration risk if demand from this customer or industry segment weakens.

l The Company discloses a potential conflict of interest with a Group Company, Pilot Industries Limited, which manufactures and trades similar lead and lead alloy products; a 3 year non-compete agreement (effective September 2025) governs this relationship, and the Company has separately undertaken to eventually consolidate the lead recycling business carried on through Pilot Industries' Bhiwadi, Rajasthan facility into itself, subject to regulatory approvals not yet obtained.

l The Company has been unable to trace an extensive list of historical corporate records dating from its 1993-94 incorporation through the mid-2000s, including the original incorporation form, multiple years of financial statements, director appointment filings, and several other statutory forms, though no penalties or proceedings have been initiated to date.

l The lead-acid battery industry, the Company's primary end market, faces a long-term technology substitution risk from increasing adoption of lithium-ion batteries, which the Company itself flags could reduce both end-demand for its products and the availability of used lead-acid batteries as recycling feedstock over the medium to long term.

l The Company experienced negative operating cash flow in FY 2024 (Rs.(252.62) million), and while this has since reversed to positive territory in FY25 and FY26, the Company's own Risk Factors caution that negative cash flows could recur.

l The Company's Debt-Equity ratio, while improving sharply, was as high as 4.87 times as recently as FY 2024, and lead product prices are described by the Company as inherently volatile, a combination that could pressure the balance sheet in a downturn.

l The Company has a limited number of customers (52 to 54 across the last 3 fiscals) and derived 83.68% to 92.80% of revenue from repeat customers, which cuts both ways: strong relationships, but concentrated dependency.

l More than 40.84% of revenue came from a single state, and the Company depends on third-party suppliers for raw material (recyclable lead-containing scrap) without necessarily long-term supply agreements.

l The Company operates in a labour-intensive industry with dependence on contract labour, and its operations involve inherently hazardous activities given the nature of lead processing.

l There have been past instances of delays in payment of statutory dues, and the Company carries contingent liabilities (outstanding bank guarantees of Rs.125 million and a disputed income tax demand of Rs.2.61 million as of FY 2026) that could affect its financial condition if they crystallise.

l The Company has existing and planned international operations exposing it to foreign currency exchange rate fluctuations and the additional risks of operating in overseas markets.

l The Company is subject to strict quality requirements from customers and must continue to incur expenses to maintain product purity standards; failure to do so could result in order cancellations.

Positives to Note

l Financial performance has scaled dramatically and consistently: PAT grew almost 9.5 times, from Rs.89.54 million in FY 2024 to Rs.846.81 million in FY 2026, with EBITDA margin more than doubling from 6.06% to 12.60% over the same period.

l RoNW of 57.46% in FY 2026 is dramatically higher than all 3 disclosed listed peers (ranging from 15.43% to 22.25%), a substantial outperformance on capital efficiency even accounting for scale differences.

l The Company has meaningfully deleveraged its balance sheet, cutting its Debt-Equity ratio from 4.87 times in FY 2024 to 1.25 times in FY 2026, while operating cash flow has turned from negative to strongly positive over the same period.

l The Company has nearly doubled its installed production capacity, from 54,750 MTPA in FY 2024 to 104,025 MTPA in FY 2026, supporting the revenue growth already achieved and providing room for further scale.

l Export revenue has grown substantially as a share of the business, from 17.63% of revenue in FY 2024 to 39.83% in FY 2026, indicating successful diversification beyond the domestic market.

l The Company has taken formal steps to manage its disclosed Group Company conflict of interest, including a signed non-compete agreement, and has not faced any penalties or proceedings to date in connection with its untraceable historical records.

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