Aaradhya Disposal Industries Limited is a growing name in the eco-friendly paper products space, focused on providing sustainable alternatives like paper cup blanks, ripple wall paper fans, and bio-degradable coated paper rolls. Backed by a decade-long industry experience, the company is making a public market debut through a book-built IPO worth ₹45.10 crores, with shares to be listed on the NSE SME platform.

Let’s explore the key details, financials, and recommendation for investors evaluating whether to apply to this IPO.

IPO Structure and Key Dates

The IPO of Aaradhya Disposal Industries comprises a fresh issue of 38.88 lakh equity shares. There is no offer for sale component. The company plans to use the proceeds primarily to:

1. Fund working capital requirements (₹20 crore)

2. Expand operations with new plant & machinery and civil construction (₹15.85 crore)

3. Prepay existing term loans (₹1.60 crore)

4. For general corporate purposes

The price band is set between ₹110 to ₹116 per equity share, with a minimum investment requirement of 2 lots (2,400 shares), costing ₹2,78,400. The issue opens on August 04, 2025, and closes on August 06, 2025. The allotment will be finalized on or around August 07, and listing is tentatively scheduled for August 11, 2025.

Market Capitalisation and Lot Size

At the upper band of ₹116, the post-issue market cap of the company is expected to be around ₹164 crores. The lot size has been set at 1,200 shares, meaning a minimum bid will require ₹1,39,200 and retail investors need to apply in multiples of 2 lots.

Lead Manager and Market Maker

The IPO is managed by Khambatta Securities, a known SME IPO lead manager, with Bigshare Services Pvt. Ltd. acting as the registrar. The designated market maker is Prabhat Financial Services Limited, ensuring liquidity post-listing.

Grey Market Premium (GMP) & Subscription Status

As of August 04, 2025, 11:30 AM, the IPO is subscribed just 0.05 times, indicating a very slow start on Day 1. Moreover, the Grey Market Premium (GMP) is flat at ₹0, signaling no strong expected listing gains.

This contrasts with more popular IPOs where GMP and subscriptions show heavy traction even before the closing date. A flat GMP indicates lack of demand in the unregulated market, typically used by traders to speculate on listing price.

Financial Performance Overview

Aaradhya Disposal has shown consistent revenue and profit growth over the past three years.

The revenue jumped over 50% from FY24 to FY25, with PAT more than doubling, reflecting operational efficiency and increased market share.

Key Ratios and Valuation

• Pre-Issue EPS (FY24): ₹10.14

• Post-Issue EPS (FY24): ₹7.27

• Pre-Issue P/E Ratio: 11.43x

• Post-Issue P/E Ratio: 15.96x

Compared to other SME IPOs, the valuation appears moderate, neither cheap nor expensive. However, considering the low GMP and muted subscription, investors don’t seem convinced of significant upside on listing.

Other key performance metrics include:

• Return on Capital Employed (ROCE): 25.15%

• Return on Equity (ROE): 44.53%

• Return on Net Worth (RoNW): 34.87%

These returns indicate strong capital efficiency, but the market seems more cautious due to sector cyclicality and lack of tech-driven edge.

Promoters & Leadership

The company is spearheaded by:

• Mr. Sunil Maheshwari, with over a decade of experience in paper product manufacturing

• Mr. Anil Maheshwari, with a diverse background in sales, accounting, and finance

• Mrs. Shashi Maheshwari

Their leadership has clearly delivered consistent growth, but being a traditional family-run business in a competitive industry, the market might be waiting for more clarity post-listing.

Strengths

• Strong growth in revenue and profit over the last 3 years

• High ROE and RoNW, indicating strong return on investor capital

• Use of top raw material brands like ITC and Nippon ensures product quality

• Clear focus on expansion through capex

Risks & Concerns

• No GMP traction, signaling weak listing day interest

• Slow IPO subscription in early hours

• High ticket size (₹2.78 lakh minimum), which may deter retail investors

• Traditional paper product segment lacks scalability compared to tech or pharma IPOs

• Dependent on commodity prices and availability of raw paper

Conclusion: Should You Subscribe?

Despite decent financial performance and robust return metrics, the flat GMP and low initial investor response indicate limited excitement. The IPO appears fairly priced but lacks a strong catalyst for listing-day gains.

If your investment goal is listing gain, you may Avoid this IPO. However, if you're a long-term investor confident in the eco-friendly paper packaging space and the company’s expansion strategy, it may be worth monitoring post-listing for better entry levels.

Disclaimer
This article is for educational and informational purposes only and does not constitute financial advice. Investment decisions should be based on individual risk tolerance and consultation with SEBI-registered advisors. Market conditions are volatile and subject to change. Neither the author nor the platform is responsible for losses arising from use of this information.

The Upcoming IPOs in this week and coming weeks are ConnPlex Cinemas, ALL Time Plastics, JSW Cement, Sawaliya Foods Products, ANB Metal Cast, Highway Infrastructure.

The Current active IPO are Parth Electricals & Engineering, Jyoti Global Plast, Essex Marine, Aaradhya Disposal Industries, BLT Logistics, Bhadora Industries, Flysbs Aviation, Cash Ur Drive Marketing, Renol Polychem.

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