Horizon Reclaim IPO (11-16 June, 2026) Analysis

SME IPO Analysis  |  BSE SME Platform  |  100% Book Built Issue

Based on Draft Red Herring Prospectus dated March 6, 2026  |  Price Band: To Be Announced

STATUS: Issue Dates 11-16 June, 2026  |  Issue: 100% Fresh Issue (No OFS)  |  Exchange: BSE SME Platform  |  Sector: Reclaimed Rubber and EPR Credits  |  Saharanpur / Roorkee, UP-Uttarakhand

Horizon Reclaim (India) Limited is a Saharanpur, Uttar Pradesh-registered reclaimed rubber manufacturer and Extended Producer Responsibility (EPR) credit generator. Incorporated in August 2006 as a private limited company and converted to public limited in May 2025, the company has 19+ years of operating history under promoters Mohit Bajaj (MD and CFO) and Malika Bajaj (Chairman and WTD).

It operates at the intersection of India's rubber recycling industry and the country's new tyre EPR regulatory framework  a position that transformed its financial profile dramatically in FY2025.

Three business lines:

• Reclaimed Rubber Manufacturing (88.18% of H1 FY2026 revenue): The core and original business. The company sources used rubber waste (scrap tyres, rubber tubes, EPDM profiles, butyl scrap) from tyre dismantlers and waste collectors across India, processes it through a thermal and mechanical devulcanisation process at its Roorkee, Uttarakhand facility (Unit I), and sells the reclaimed rubber to downstream manufacturers. Products include Natural Reclaim Rubber (WTR, HR, 202, Fine, Super Fine grades), Synthetic Reclaim Rubber (EPDM and Butyl), and Crumb Rubber. End uses include footwear soles, floor mats, tyre retreading, automotive seals and gaskets, road construction (rubberised asphalt), and conveyor belts.

• EPR Credit Sales (11.82% of H1 FY2026 revenue; nil before FY2025): The transformational new revenue stream. Under India's Extended Producer Responsibility (EPR) framework, tyre manufacturers, importers, and brand owners are mandated by the Central Pollution Control Board (CPCB) to ensure a specified quantity of their waste tyres are collected and recycled each year. They can meet this obligation by either doing the recycling themselves or by purchasing EPR credits from registered recyclers. Horizon Reclaim is registered with CPCB as a Waste Tyre Recycler and holds a CPCB Producer Registration, allowing it to generate and sell these credits. EPR credit revenue commenced in FY2025 (Rs.335.13 lakhs) and grew to Rs.294.45 lakhs in just 6 months of H1 FY2026. This is the single most important new development in the company's financial story.

• Pyrolysis Oil Production (planned, not yet commenced): The company is constructing Unit II at Village Gundala, Rajkot, Gujarat, to install a 60-ton-per-day continuous pyrolysis plant that will convert waste rubber/tyres into pyrolysis oil. The IPO capex allocation of Rs.943 lakhs includes Rs.59.44 lakhs for this Rajkot plant (from Chinese supplier Hunan Benji). This unit would add a third revenue stream and create a fully integrated waste tyre utilisation value chain.

Manufacturing footprint: Unit I (Roorkee, Haridwar, Uttarakhand  operational, 14,100 MTPA installed capacity). Unit III (Bhagwanpur, Haridwar District, Uttarakhand  construction and installation complete, commercial operations not yet commenced; IPO funds Rs.539.56 lakhs of additional machinery). Unit II (Village Gundala, Rajkot, Gujarat  under construction, pyrolysis plant; IPO funds Rs.59.44 lakhs for this plant plus civil work funded internally).

Regulatory tailwind: India's EPR framework for waste tyres is tightening progressively. The CPCB mandates increasing quantities of waste tyre recycling by producers/importers each year. As compliance strictness increases, demand for EPR credits from registered recyclers like Horizon Reclaim should grow, potentially making EPR credits a larger proportion of revenue than the current 11.82%.

Key Basics

This is a 100% Book Built Fresh Issue on BSE SME Platform. No OFS. The company receives all proceeds. The DRHP was filed on March 6, 2026. Price band is yet to be determined. GYR Capital Advisors (the same BRLM who handled the Merritronix IPO in this analysis series) is the sole BRLM. KFin Technologies (a leading SME registrar) handles the registrar role.

Issue Type	100% Book Built Fresh Issue of up to 54,00,000 Equity Shares of face value Rs.10 each. NO Offer for Sale. Company receives all net proceeds.
Issue Size	Up to 54,00,000 Equity Shares.
Face Value	Rs.10 per Equity Share
Price Band	To be determined by Company in consultation with BRLM. Announced at Red Herring Prospectus stage.
Pre-Issue Share Capital	1,42,46,200 Equity Shares of Rs.10 each (post sub-division and bonus issue). FV sub-divided from Rs.100 to Rs.10 on February 6, 2025; 18:1 bonus issued March 17, 2025.
Post-Issue Share Capital	1,42,46,200 + 54,00,000 = 1,96,46,200 Equity Shares. Public holds approximately 27.49% post-issue.
Promoters (Post-Bonus)	Mohit Bajaj: 1,10,22,998 shares (77.38% pre-issue) | Malika Bajaj: 19,22,800 shares (13.50% pre-issue). Ashok Bajaj (family): 13,00,000 shares (9.13%). Total promoters: 90.88% pre-issue.
Promoter WAC	Mohit Bajaj: WAC Rs.1.06/share (post-bonus adjustment from original Rs.100 FV shares held at near-nil cost). Malika Bajaj: WAC Rs.3.65/share. These are effectively near-zero cost promotional shares from a 2006 incorporation.
Listing Exchange	BSE SME Platform
BRLM	GYR Capital Advisors Private Limited, Ahmedabad (SEBI Reg: INM000012810). Also BRLM for Merritronix Limited in this analysis series.
Registrar	KFin Technologies Limited, Hyderabad (SEBI Reg: INR000000221)
Statutory Auditors	M/s Padam Dinesh and Co., Chartered Accountants (FRN: 009061N) and M/s V. Singhi and Associates, Chartered Accountants (FRN: 031017E)  two joint auditors, unusual for an SME company; may signal governance enhancement pre-IPO.
Monitoring Agency	To be appointed prior to filing RHP (required as fresh issue exceeds Rs.100 crore)
Bid/Offer Dates	To be announced
Eligibility	Regulation 229(2) and 253(1) of Chapter IX of SEBI ICDR Regulations 2018 (post-issue paid-up capital exceeds Rs.10 crore but meets SME Platform criteria).

Capital structure history note: The company had just 74,980 equity shares of face value Rs.100 each until FY2024  an indication of near-zero external capital over 18 years. In February 2025 (one year before the DRHP), the face value was split from Rs.100 to Rs.10 (creating 7,49,800 shares), and then an 18:1 bonus was issued in March 2025 (adding 1,34,96,400 shares)  taking the total to 1,42,46,200 shares. This large bonus expansion nine months before the DRHP is typical of SME IPO preparation. All promoter shares were acquired at effectively nil cost.

All net proceeds go to the company. No OFS. Four uses: working capital, debt repayment, capex for additional machinery, and GCP. The total identifiable deployment (excluding GCP which is capped at 15% or Rs.10 lakhs  effectively Rs.10 lakhs given the cap) is well-defined with specific lender and machinery details.

Object	Amount (Rs. lakhs)	Deployment	Details
Working Capital Requirements	Remaining net proceeds after other objects	FY2027	Fund raw material procurement (scrap tyres from across India), WIP inventory, and receivables cycle. The business is working-capital intensive due to seasonal availability of scrap and the timing of EPR credit generation and sale.
Repayment of ICICI Bank Borrowings	2,708.55	FY2027 (100%)	Three ICICI Bank facilities: (1) Dropline OD of Rs.636.80 lakhs (sanctioned June 2024, Repo + 2.60% p.a., 180-month tenor for working capital); (2) Cash Credit of Rs.808.15 lakhs (July 2025, Repo + 2.40%, working capital); (3) Term Loan of Rs.1,263.60 lakhs (July 2025, Repo + 2.40%, 84 months, for capital expenditure). Total outstanding as of February 18, 2026: Rs.2,708.55 lakhs. All three are ICICI Bank facilities with personal guarantees from Mohit and Malika Bajaj.
Capex: Machinery at Unit III and Unit II	943.00 (from IPO) + 190.92 (internal)	FY2027	Unit III (Bhagwanpur, Haridwar): International machinery from Dalian Xingting (China) for refining and cracker machines totalling Rs.462.84 lakhs + Domestic rotary autoclave from Karadani Engineering (Gujarat) Rs.76.66 lakhs = Rs.539.50 lakhs. Unit II (Rajkot, Gujarat): Pyrolysis plant from Hunan Benji Environmental Energy Technology (China), 60 TPD capacity, Rs.594.43 lakhs total cost (US$6,50,000 at Rs.91.45/USD), of which Rs.403.50 lakhs from IPO. Total IPO capex: Rs.943.00 lakhs.
General Corporate Purposes	Up to Rs.10 lakhs (regulatory cap at 15% of gross or Rs.10 lakhs lower)	As needed	Minimum discretionary allocation due to SEBI cap.

Key observations:

(1) All three ICICI Bank borrowings are recent (FY2024-25 vintage), taken specifically to fund the capacity expansion and working capital for the EPR-driven revenue surge. The IPO therefore repays infrastructure-building debt rather than old operating debt.

(2) The Chinese machinery suppliers (Dalian Xingting and Hunan Benji) are both valid quotations but no purchase orders have been placed  actual procurement costs, forex exposure, and commissioning timelines carry execution risk.

(3) Both Unit II and Unit III are not yet commercially operational  investors are funding capacity before it generates revenue.

Financial Performance

Note: All figures in Rs. lakhs unless stated. Financial periods: FY2023 (full year), FY2024 (full year), FY2025 (full year), and H1 FY2026 (six months ended September 30, 2025). Restated Financial Statements prepared under Indian GAAP. The DRHP discloses 14 restatement adjustments  indicating a company building financial reporting discipline ahead of listing. All figures below are restated.

Revenue

Revenue grew modestly in FY2023 and FY2024: Rs.1,964.90 lakhs to Rs.2,032.71 lakhs (3.45%). Then in FY2025, revenue exploded 78.17% to Rs.3,621.61 lakhs. The driver was not volume growth in reclaimed rubber  it was the introduction of EPR credit sales (Rs.335.13 lakhs in FY2025, up from nil).

EPR credits added Rs.335.13 lakhs of almost pure-margin revenue on top of a reclaimed rubber base that itself grew (Rs.3,286.48 lakhs in FY2025 vs Rs.2,032.71 lakhs in FY2024  a 61.7% increase). H1 FY2026 generated Rs.2,491.82 lakhs in 6 months, implying annualised FY2026 revenue of approximately Rs.4,983 lakhs  a further 37% growth over FY2025.

Profitability

Metric	FY2023 (Rs. L)	FY2024 (Rs. L)	FY2025 (Rs. L)	H1 FY2026 (Rs. L)
Revenue from Operations	1,964.90	2,032.71	3,621.61	2,491.82
Revenue Growth %	12.51%	3.45%	78.17%	~37% ann. vs FY25
Revenue from Reclaimed Rubber	1,964.90	2,032.71	3,286.48	2,197.37
Revenue from EPR Credits	0	0	335.13	294.45
Total Income	1,966.01	2,043.60	3,638.85	2,499.55
Cost of Materials Consumed (net)	1,495.17	1,603.46	2,058.44	1,255.94
Purchase of Stock-in-Trade	20.89	0	26.07	28.46
Employee Benefits Expense	145.13	171.72	224.50	185.32
Finance Costs	0.30	0.16	21.81	52.52
Depreciation	17.39	21.70	54.88	41.36
Other Expenses	175.89	129.54	231.90	144.24
Total Expenses (approx.)	1,854.77	1,926.58	2,617.61	1,707.84
Profit Before Tax (Restated)	89.62 (approx.)	95.09 (approx.)	972.41	702.77
Tax Expense	22.58	23.95	265.69	194.35
Profit After Tax (PAT, Restated)	67.04	71.14	706.72	508.42
EBITDA (Restated)	107.24	116.90	1,046.29	791.71
EBITDA Margin %	5.45%	5.72%	28.75%	31.67%
PAT Margin %	3.41%	3.50%	19.51%	20.40%
Basic and Diluted EPS (post-bonus, Rs.)	0.47	0.50	4.96	3.57 (6M, not ann.)
Weighted Average EPS (Rs.)			2.73
RoNW %	10.24%	9.80%	49.32%	26.19% (6M, not ann.)

The FY2025 profit transformation is extraordinary: PAT went from Rs.71.14 lakhs (FY2024) to Rs.706.72 lakhs (FY2025)  a 9.9x increase in one year. EBITDA margin expanded from 5.72% to 28.75%  a 2,303 basis point improvement. This is the single most dramatic financial transformation in this entire analysis series.

The cause is clear: EPR credits. Rs.335.13 lakhs of EPR credit revenue in FY2025 carries a near-100% contribution margin (essentially no incremental cost to generate a tonne of EPR credits beyond the cost of the tyre recycling already done).

At the PAT level, Rs.335 lakhs of additional near-margin revenue on a Rs.67 lakh PAT base would create enormous leverage  which is exactly what is observed. H1 FY2026 PAT of Rs.508.42 lakhs in just 6 months (annualising to Rs.1,017 lakhs) suggests FY2026 PAT will significantly exceed FY2025's Rs.706 lakhs.

The single most important analytical question: Is EPR credit revenue recurring and growing? The answer determines whether the FY2025 transformation is structural or temporary. Given that India's tyre EPR regulations are tightening (larger recycling mandates each year) and Horizon Reclaim is CPCB-registered, EPR credit revenue appears sustainable.

However, the price of EPR credits can fluctuate based on industry supply (more recyclers entering the market) and demand (volume of tyre sales mandating EPR). Any regulatory softening or EPR credit price collapse would revert the business to its pre-FY2025 margin profile.

Return Ratios

Metric	FY2023	FY2024	FY2025	H1 FY2026 (not ann.)
Return on Net Worth (RoNW) %	10.24%	9.80%	49.32%	26.19%
Weighted Average RoNW %			29.63%
Return on Equity (RoE) %	10.79%	10.30%	65.47%	30.14%
Return on Capital Employed (RoCE) %	13.72%	13.11%	40.70%	21.12%
NAV per Share (post-bonus, Rs.)	4.60	5.10	10.06	13.63
Debt-to-Equity Ratio	Nil	Nil	0.70	0.83
Industry Peer P/E (Lead Reclaim, FY25)			34.36x
At 34.36x on FY25 EPS Rs.4.96 = implied price			Rs.170
At 34.36x on Wtd Avg EPS Rs.2.73 = implied price			Rs.94

The RoNW of 49.32% (FY2025) and RoE of 65.47% are exceptional  driven entirely by the EPR credit windfall on a small equity base. The weighted average figures (RoNW 29.63%, EPS Rs.2.73) better reflect the average quality of earnings across three years, and the industry peer comparison (Lead Reclaim and Rubber Products Limited, P/E 34.36x) applied to the weighted average EPS implies a price of approximately Rs.94, while applied to FY2025 EPS of Rs.4.96 implies approximately Rs.170. At any price in this range, the key question remains whether the FY2025 EPR-driven earnings represent the new normal or a temporary uplift.

Balance Sheet

Balance Sheet Item	FY2023 (Rs. L)	FY2024 (Rs. L)	FY2025 (Rs. L)	Sep-25 (Rs. L)
Total Equity (Net Worth, Restated)	654.95	726.09	1,432.81	1,941.23
Long-Term Borrowings	0	0	795.15	990.36
Short-Term Borrowings	0	0	211.44	643.17
Total Borrowings	0	0	1,006.59	1,633.53
Inventories	83.47	71.50	278.64	424.48
Trade Receivables	306.28	237.93	538.54	580.23
Disputed Trade Receivables (>3 yrs)	16.86	14.36	14.36	14.36
Cash and Cash Equivalents (incl. FDs)	113.18	59.31	143.06	162.46
Total Current Assets (approx.)	599.00	458.00	1,126.00	1,387.00
Total Assets (approx.)	689.00	750.00	2,524.00	3,573.00
Property, Plant and Equipment	89.79	291.73	1,394.31	1,717.27
Contingent Liabilities	Nil disclosed	Nil disclosed	Nil disclosed	Nil disclosed

The balance sheet shows a company that went from zero debt (FY2023, FY2024) to Rs.1,633 lakhs in borrowings by September 2025  entirely to fund the capacity expansion at Unit III (Bhagwanpur) and the new Rajkot pyrolysis plant, plus working capital for the EPR-driven revenue surge.

PPE jumped from Rs.291 lakhs (FY2024) to Rs.1,717 lakhs (September 2025)  a 5.9x increase in 18 months  as physical plant was rapidly built. The disputed receivable of Rs.14.36 lakhs (outstanding more than 3 years across all periods) is a minor but persistent item. No contingent liabilities are disclosed  a notable positive for a company in the recycling/waste management sector where environmental regulatory actions are common.

Cash Flows

Cash Flow (Rs. lakhs)	FY2023	FY2024	FY2025	H1 FY2026
Net Cash from Operating Activities	61.24	148.95	171.31	793.78
Operating Profit before WC Changes	106.79	109.82	1,035.15	788.75
WC Change (Inventories, Receivables)	(42.17)	71.29	(253.54)	(287.67)
Net Cash from Investing Activities	(40.01)	(184.62)	(1,191.21)	(1,352.26)
Net Cash from Financing Activities	(20.84)	74.97	1,199.43	785.77
Cash at Period End	113.18	59.31	143.06	162.46

Operating cash flows are consistently positive across all periods  a significant strength. FY2025 operating cash flow of Rs.171.31 lakhs is surprisingly modest versus PAT of Rs.706.72 lakhs; the gap is explained by the Rs.253.54 lakhs working capital absorption (inventory build and receivables growth as the business scaled rapidly). H1 FY2026 shows a much stronger Rs.793.78 lakhs operating cash flow for just 6 months, confirming that the EPR-driven earnings are genuinely converting to cash. The investing outflow of Rs.1,352.26 lakhs in H1 FY2026 reflects the ongoing construction of Unit III and Unit II. The combination of strong and growing operating cash flows with heavy but strategic investing outflows is the profile of a genuine growth company, not a cash-burning story.

Revenue Composition and Business Mix

Product Category	FY2023 (Rs. L)	FY2023 %	FY2024 (Rs. L)	FY2024 %	FY2025 (Rs. L)	FY2025 %	H1 FY26 (Rs. L)	H1 FY26 %
WTR Reclaim Rubber	1,171.25	59.61%	1,095.00	53.87%	1,585.44	43.78%	705.08	28.30%
202 Reclaim Rubber	178.07	9.05%	403.44	19.84%	854.23	23.59%	529.93	21.27%
HR Reclaim Rubber	134.63	6.85%	146.00	7.18%	261.35	7.22%	168.46	6.76%
EPDM Reclaim Rubber	130.00	6.62%	253.73	12.48%	442.22	12.21%	233.52	9.37%
Crumb Rubber	155.77	7.93%	18.22	0.90%	86.14	2.38%	498.66	20.01%
Other Rubber Products	195.18	9.94%	116.32	5.73%	97.10	2.68%	61.72	2.47%
Sale of EPR Credits	0	0%	0	0%	335.13	9.25%	294.45	11.82%
Total Revenue from Operations	1,964.90	100%	2,032.71	100%	3,621.61	100%	2,491.82	100%

The product mix is shifting in three notable ways. First, Crumb Rubber surged from 0.90% (FY2024) to 20.01% (H1 FY2026)  from near-nil to the second-largest product category in just 18 months. Crumb rubber is produced from shredded tyres and sold for road construction, playground surfaces, and sports tracks.

Its rapid growth may reflect both product investment and the complementary relationship with EPR credit generation (processing tyres into crumb rubber generates EPR credits). Second, EPR credits grew from nil to 11.82% of revenue in just two years and carry much higher margins than rubber products. Third, the traditional dominant product (WTR Reclaim Rubber) declined from 59.61% to 28.30% of revenue as the portfolio diversified  reducing single-product concentration risk.

Geographic concentration: The DRHP discloses that the company's sales are primarily in the north-western region of India. Diversification to national markets is expected as Unit II in Rajkot (western India) and national EPR credit buyers (tyre manufacturers across India) expand the geographic footprint.

How Does It Compare to Peers?

The DRHP cites only one listed peer: Lead Reclaim and Rubber Products Limited (NSE-listed). Industry P/E is therefore a single data point: 34.36x (February 16, 2026). Lead Reclaim had revenue of Rs.3,126 lakhs (FY2025), EPS of Rs.1.89, RoNW of 7.27%, and NAV per share of Rs.23.24.

Metric	Horizon Reclaim (FY25)	Lead Reclaim and Rubber Products (FY25)
Revenue from Operations (Rs. lakhs)	3,621.61	3,126.00
EBITDA (Rs. lakhs)	1,046.29	Not separately disclosed
EBITDA Margin %	28.75%	Approx. 5-8% (estimated from EPS/revenue)
PAT (Rs. lakhs)	706.72	Not separately disclosed
PAT Margin %	19.51%	Approx. 3-5% (estimated)
EPS Basic/Diluted (Rs.)	4.96	1.89
RoNW %	49.32%	7.27%
NAV per Share (Rs.)	10.06	23.24
P/E Ratio	[TBD at IPO]	34.36x (at Rs.64.95 CMP)
Has EPR Credit Revenue	Yes (Rs.335 lakhs, 9.25% of revenue)	Not disclosed
Implied Price at 34.36x on FY25 EPS Rs.4.96	Rs.170	(Peer benchmark)
Implied Price at 34.36x on WAG EPS Rs.2.73	Rs.94	(Peer benchmark)

Horizon Reclaim's metrics are dramatically superior to Lead Reclaim on every financial ratio. RoNW of 49.32% versus 7.27% (6.8x superior) is the most striking disparity, explained almost entirely by the EPR credit revenue that Lead Reclaim does not appear to have (or has at a much smaller scale). At the industry P/E of 34.36x, Horizon Reclaim would be valued at Rs.170 per share on FY2025 EPS and Rs.94 on weighted average EPS. The challenge for investors is determining which EPS is the right base: FY2025's Rs.4.96 (dominated by EPR windfall) or the weighted average Rs.2.73 (blending two low-profit years with one exceptional year). If EPR credit revenue is sustainable and growing (the regulatory tailwind suggests it is), FY2025 is the correct baseline and forward EPS will be even higher.

Key Risks

• EPR credit revenue sustainability  the entire investment thesis rests on regulatory enforcement: The FY2025 financial transformation (PAT 9.9x, EBITDA margin 5.72% to 28.75%) was almost entirely driven by Rs.335.13 lakhs of EPR credit revenue. If EPR credit prices decline due to: (a) more recyclers entering the market, (b) regulatory enforcement relaxation, (c) changes in CPCB mandates, or (d) technology changes allowing tyre companies to self-recycle more efficiently, the EPR credit revenue could compress or disappear. Without EPR credits, the business reverts to the pre-FY2025 profile: 5-6% EBITDA margin, PAT of Rs.67-71 lakhs  a dramatically different investment proposition.

• 14 restatement adjustments in the restated financial statements  significant prior-period accounting errors: The statutory auditors and joint auditors identified and corrected 14 specific accounting errors including: income tax misclassifications across three years, GST payment misrecording, depreciation calculation errors on factory building, inventory valuation errors, profit on asset sale booked to reserves instead of P&L, leave encashment and gratuity not provided, and PF/ESIC non-compliance. While all have been restated and corrected, the number and nature of these errors (spanning the entire P&L and balance sheet) raises questions about the quality of financial reporting infrastructure in the company's pre-IPO phase. For a company listing on a public market, this level of error disclosure is a governance concern.

• PF/ESIC non-compliance  unquantified liability disclosed by auditors: The joint statutory auditors explicitly note in the audit report that the company 'has not adopted the provisions of the Provident Fund (PF) as applicable under the relevant labour laws prior to Financial year 2024-25' and that 'there exists a possible unascertained liability on account of non-compliance with the said laws, which has not been quantified or provided for in the financial statements.' For a company with employees dating back to 2006, 18 years of PF non-compliance could represent a material contingent liability. The amount is explicitly described as 'unascertained'  meaning the company itself does not know how large it could be.

• Units II and III not yet commercially operational  significant capital deployed in uncommissioned assets: Unit III (Bhagwanpur, Haridwar) is described as 'construction and installation complete but commercial operations not yet commenced.' Unit II (Rajkot, pyrolysis plant) is 'substantially completed including construction.' The IPO funds an additional Rs.943 lakhs of machinery for both. Between the already-installed but non-operational Unit III and the partially complete Unit II, approximately Rs.1,000-1,500 lakhs of capital is deployed in assets not yet generating revenue. Commissioning risk, technology risk (pyrolysis from Chinese supplier with no track record with the company), and market acceptance risk for pyrolysis oil all apply.

• Single operational facility (Unit I, Roorkee)  all current revenue from one plant: Every rupee of current revenue comes from a single manufacturing facility in Roorkee, Haridwar. Fire, flood, regulatory shutdown, machinery failure, or labour disruption would halt all operations. The forthcoming Units II and III will reduce this concentration but until they are operational, the single-facility risk is acute.

• Ownership restructuring in FY2025  Neelam Bajaj transferred 70% stake to Mohit Bajaj, now not a promoter: The shareholding table reveals that in FY2025, Neelam Bajaj (who held 70.14% of the company pre-FY2025) transferred her entire stake to Mohit Bajaj. Neelam Bajaj is no longer listed as a promoter. This major ownership restructuring  one year before the IPO  without detailed disclosure of the commercial terms, tax implications, or relationship between Neelam Bajaj and the Bajaj family deserves scrutiny. It effectively transferred 70% of the company from one family member to another, concentrating control in Mohit Bajaj (now 77.38%).

• Scrap rubber raw material availability and pricing volatility: The primary input (used tyres, rubber scrap) is an industrial waste product whose availability depends on tyre replacement cycles, dismantler networks, and geographic logistics. Any constraint in scrap availability (e.g., competing recyclers, export of scrap to China) or price spike would increase input costs.

• Chinese machinery suppliers for Unit III and Unit II  no prior relationship, quotations valid 2-6 months: Both Dalian Xingting (refining machines for Unit III) and Hunan Benji (pyrolysis plant for Unit II) are new suppliers with no prior procurement relationship with Horizon Reclaim. No purchase orders placed. The quotations are valid for limited periods. Actual procurement may occur at different prices and with different technical specifications.

• Crumb rubber surge from 0.9% to 20% of revenue in 18 months  sustainability unproven: The rapid growth of crumb rubber in H1 FY2026 (Rs.498.66 lakhs from near-nil) is significant but unproven across a full market cycle. Crumb rubber demand for road construction depends on state government contracts, RuMAC (Rubberised Micro Asphalt Concrete) specifications, and local tender cycles  not always predictable.

• Working capital cycle intensification as the business scales: Receivables grew from Rs.237.93 lakhs (FY2024) to Rs.580.23 lakhs (September 2025) while revenue grew approximately 2.5x. If receivable days worsen as the business scales into new geographies, working capital requirements will exceed the IPO allocation.

• Two joint statutory auditors  governance signal: Having both Padam Dinesh and Co. and V. Singhi and Associates as joint auditors (unusual for an SME) appears to be a pre-IPO governance enhancement. The audit for FY2024 and FY2023 was done by a different firm (Sanjay Dhingra and Associates). The change in auditor and addition of a joint auditor structure immediately before the IPO is a positive governance step but worth monitoring for continuity.

Positives

• PAT grew 9.9x in one year: Rs.71.14 lakhs (FY2024) to Rs.706.72 lakhs (FY2025)  genuine structural shift: This is not cosmetic  the EPR credit framework is a real regulatory mechanism creating genuine new revenue for waste tyre recyclers. Horizon Reclaim was positioned early, holds CPCB registration, and monetised this in FY2025.

• EBITDA margin transformed from 5.72% to 28.75% (FY2025) to 31.67% (H1 FY2026): The margin trajectory is improving, not deteriorating, confirming that EPR credits are incremental high-margin revenue layered on top of an improving base rubber business.

• Positive operating cash flows in all four reported periods: Rs.61.24 lakhs (FY2023), Rs.148.95 lakhs (FY2024), Rs.171.31 lakhs (FY2025), Rs.793.78 lakhs (H1 FY2026). Unlike many SME companies in this series with negative operating cash flows, Horizon Reclaim has always generated positive operating cash from its core operations.

• 100% Fresh Issue  all proceeds to company, promoters retain all shares: No share dilution for liquidity. Every rupee of IPO capital funds the company's balance sheet. Mohit Bajaj and Malika Bajaj retain their full holdings.

• CPCB registration and EPR framework alignment  regulatory moat: The waste tyre EPR framework is government-mandated and tightening annually. Being CPCB-registered and an established recycler provides a genuine regulatory moat  tyre companies must buy EPR credits from registered recyclers like Horizon Reclaim.

• 19 years of operating history in rubber recycling  cycle-tested business: The company has operated since 2006 through multiple economic cycles. It is not a pre-revenue startup but a cash-generating business with long-standing customer relationships.

• ISO 9001:2015, ISO 45001:2018, ISO 14001:2015 certifications  quality and environmental compliance: These three ISO certifications are prerequisites for supplying institutional buyers and exporting. The ISO 14001 (environmental management) certification is particularly relevant given the company's positioning in the circular economy.

• Pyrolysis oil as a future third revenue stream  market expanding: Pyrolysis oil (produced by thermally processing waste rubber/tyres) is a substitute for furnace oil and fuel oil used by industrial units. India's formal pyrolysis oil market is nascent but growing, and Unit II at Rajkot (Gujarat  a major industrial and petrochemical hub) is well-positioned.

Analysis based on DRHP dated March 6, 2026  |  Restated Financial Statements (Indian GAAP)  |  All figures in Rs. lakhs unless stated