Mehul Colours Ltd. IPO

Ardee Industries

• Ardee Industries is coming out with a 100% book building; initial public offering (IPO) of 8,39,74,436 shares of face value Rs 2 each in a price band Rs 50 - 53 per equity share. 
• Not more than 50% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 35% for the retail investors.
• The issue will open for subscription on August 05, 2026 and will close on August 07, 2026.
• The shares will be listed on BSE as well as NSE.
• The face value of the share is Rs 2 and is priced 25.00 times of its face value on the lower side and 26.50 times on the higher side.
• Book running lead manager to the issue is Pantomath Capital Advisors.
• Compliance officer for the issue is Manish Kumar Rai. 

Profile of the company

Ardee Industries is one of India’s leading players in circular economy, specializing in the environmentally responsible recovery and recycling of end-of-life energy storage products and non-ferrous scrap, while reclaiming critical resources from waste streams. Its product portfolio comprises pure lead and lead alloys such as lead calcium alloys, lead antimony alloys, lead tin alloys, lead silver alloys and lead cadmium alloys which find applications in critical industries including energy storage, e-mobility, automotive, chemical, among others. Its products are customisable to the requirements of its customers, with respect to the level of purity and/or composition with other metal and non-metal elements with purity levels ranging from 99.97% to 99.985% that conform to international standards.

By closing the loop across collection, recycling, and production, it not only reduces India’s dependence on imported critical metals but also strengthen domestic resource security while lowering the environmental footprint of industrial growth. With an installed recycling capacity of 156,950 MTPA and a track record of producing quality-compliant alloys, it is closely aligned with India’s sustainability agenda and the global transition towards a circular, resource - efficient economy. Pure lead is standardized with purity levels ranging from 99.97% to 99.98% while lead alloys are customized to the requirements of its customers, with respect to the level of purity and/or composition with other metal and non-metal elements. Revenue is primarily derived from the sale of these recycled and refined non-ferrous metal products in domestic and international markets.

Order procurement begins with customer outreach through market research, enquiries and industry events, followed by a detailed vendor onboarding process involving technical evaluation, quality and capability audits. Orders are placed only after successful vendor approval and ongoing compliance with customer specifications and industry standards, supported by periodic audits of its manufacturing facility. As per its revenue model, revenue from its sales is booked upon change of control of products to its customers, as per the terms of its contracts or purchase orders. Further, it has its brand ‘Ardee’ listed on the MCX platform which provides customers and commodity traders a platform to purchase and trade in its product, pure lead. Listing on MCX establishes the company’s credibility and competitiveness, facilitates establishing transparent benchmark price for its products, pure lead, enables hedging against price risks and improved market visibility. Further, its brand ‘Ardee Lead 9997’ is also listed on the London Metal Exchange (LME) which further establishes the company’s credibility and competitiveness in the international markets, provide global price benchmarking of its products.

Proceed is being used for: 

• Funding incremental working capital requirement of the company
• Repayment and/or pre-payment, in full or in part, of certain borrowings availed by the company
• General corporate purposes

Industry overview

Lead is among the most extensively recycled metals, capable of being re-melted numerous times while retaining its characteristics. In India, a substantial share of lead production, around 85-90%, is derived from recycling. The majority of lead consumed in the nation, over 80%, is utilized in battery manufacturing. Recyclability of lead is a crucial property. It can be reused in products like batteries, cable insulation, and radiation protection without losing its quality. India boasts a robust lead recycling sector, but due to the associated health hazards, the Central Pollution Control Board grants licenses to lead reprocessors to guarantee compliance with environmental standards. Indian Recycled lead industry is broadly classified into four clusters north, south, east, and west with an aggregate of around 672 registered lead recycling units across the country with an installed capacity of around 3.53 million tonnes per annum.

The Recycled Lead Ingots market in India was valued at Rs 30,933 crore in FY 2026 contributed by the growing demand from the OEM in the automotive sector and for replacement of batteries when completes the life cycle. Apart from automotive sector power backup demand from residential buildings and offices fulfilled by the inverter and UPS. Demand is also driven by the growth of Telecom, data centres, energy storage backup from the renewable sector and other applications such as cable sheathing, PVC Stabilizers etc. The Recycled Lead Ingots market in India is projected to reach Rs 39,200 crore by FY 2030 with a CAGR of 6.1% from FY 2026 to 2030. 

Meanwhile, India does not have significant primary tin production capacity due to the absence of commercially viable domestic tin ore deposits. However, tin is produced through recycling and imports with a modest secondary tin infrastructure in place in India. In India, tin ore is found associated with granite, pegmatites and quartz veins and also in placer deposits. Resources are spread over in Bastar and Dantewada districts of Chhattisgarh, Tosham deposit in Bhiwani district of Haryana and Malkangiri district of Odisha. Tin, as a metal, is the most preferred and environmentally friendly packing material. Tin plate, a value-added flat steel product, is a versatile packaging substrate used in edible oils, paints, pesticides, processed foods, beverages and other industries. As a pure metal, it can be used in storage tanks for pharmaceutical chemical solutions, in capacitors, electrodes, fuse-wires, ammunitions, tinned iron sheets to protect victuals and sweets. In India, the main consumers of tin are the Tin Plate Industry and Solder Industry. Solder Industry has advanced to become the biggest single-end-use sector, over the last decade. India produces recycled tin mainly through recycling of tin plate. However, there was certain production of tin metal in past years and, but the produced quantity of tin was not so significant. India produced 17.16 Tonnes of tin metal in FY 2023, and the production has grown with a CAGR of 23.3% from FY 2019 to FY 2023.

Pros and strengths 

Track record of profitability and consistent financial performance: It has experienced sustained growth in various financial indicators including its revenue, profitability and returns as well as consistent improvement in its balance sheet position in the preceding three Fiscals - 2026, 2025, and 2024, wherein it has seen an increase in its net worth. The company has showcased a consistent track record of growth and profitability. Its EBITDA has recorded a compounded annual growth (CAGR) of 128.96% from Fiscal 2024 to Fiscal 2026. Further, the company recorded a compounded annual growth (CAGR) in profit after tax of 207.52% from Fiscal 2024 to Fiscal 2026.

Strong customer base along with robust raw materials sourcing capabilities: It has served more than 50 customers across domestic and international markets. Its customer engagements are dependent on its ability to consistently deliver quality products considering the requirements of its customers, with respect to the level of purity and/or composition with other metal and non-metal elements, in its pure lead and lead alloys. Its domestic customers include Amara Raja Energy & Mobility and its international customers include Sebang Metal Trading Co., among others.

Application of hedging mechanism for commodity price risk related protection: Its business operations are directly impacted by fluctuations in the prices of lead traded on the London Metal Exchange (LME) and MCX. Price increase or decrease in lead can significantly affect its profitability. Recognising this, it has developed a deep understanding of commodity cycles and has implemented robust, board-approved hedging practices aimed at mitigating commodity price-related risks. For the purposes of safeguarding its financial position against price volatility, it follows: i) Back-to-back pricing model: It adopts this mechanism for both import and export transactions, where the price quoted to customers is linked to LME prices at the time of order confirmation. This structure allows it to hedge its cost/ margin as LME prices are volatile thereby insulating its margins from LME price volatility. Consequently, price variations in the LME are not transferred to customers. ii) Hedging by entering into futures derivative contracts on the LME: It manages price volatility in pure lead through disciplined hedging, exclusively via futures derivative contracts on the LME. Hedging enables it to protect its financial performance from adverse price movements and stabilize profitability in a volatile metals market.

Leading the circular economy through advanced recycling solutions: It is one of India’s leading players in circular economy, specializing in the environmentally responsible recovery and recycling of end-of-life energy storage products and non-ferrous scrap, while reclaiming critical resources from waste streams. The company specializes in manufacturing of pure lead and lead alloys that conform to international standards, with purity levels ranging from 99.97% to 99.985%. Since its acquisition of its present Promoters in 2021, it has been investing in its Manufacturing Facility to expand its installed capacities from 54,750 MTPA in Fiscal 2024 to 104,025 MTPA in Fiscal 2026.

Risks and concerns

Reliance on major customers: It specializes in the manufacturing of pure lead and lead alloys by using recyclable scrap such as battery scrap, remelted lead ingots, remelted lead blocks, lead scrap (radio / relay / ropes) and lead master metal. It caters to customers in various industries including battery and metal in the domestic and international markets. It served 52, 54 and 54 customers for the Fiscals 2026, 2025 and 2024. The revenue from its top customer was Rs 4,745.56 million, Rs 3,804.08 million and Rs 3,352.94 million and contributed to 40.64%, 51.22% and 72.42% of revenue from operations during the Fiscals 2026, 2025 and 2024, respectively. The loss of any of these customers could have a material adverse effect on its business, financial condition, results of operations and cash flows.

Business dependence on the battery and metal industries: It undertakes manufacturing of pure lead and lead alloys by using recyclable lead-containing scrap. During the Fiscals 2026, 2025 and 2024, 84.79%, 87.23% and 88.64% of its revenue from operations, respectively, was attributed to the battery and metal industries and therefore its business operations are dependent upon the said industries. Any downturn in the demand of battery and metal industries and the other industries in which its customers operate, could adversely affect its business, financial performance and condition.

Dependence on third-party suppliers for raw material: Its continued success and profitability depend on its ability to consistently source a steady and sufficient supply of raw materials. It procures its raw materials from domestic and international traders on a purchase order basis. It depends on third party suppliers for the supply of raw material required for its business operations. Any disruptions in the supply or availability of the raw material or fluctuations in their prices may have an adverse impact on its business operations, cash flows and financial performance. Further, its cost of raw material purchased from its top 10 suppliers were Rs 3,567.49 million, Rs 3,047.48 million and Rs 1,881.67 million, representing 38.48%, 53.71% and 51.06%, of its total purchases of raw materials in the Fiscals 2026, 2025 and 2024, respectively. Furthermore, it is also exposed to foreign exchange rate fluctuations as it imports substantial portion of its raw material. Volatility in Indian rupee against the U.S. dollar or other currencies may materially affect its business performance, financial condition, and cash flows.

Geographic revenue concentration: Its revenues are spread across 12 states/union territories, however, it generated about 40.84%, 51.58%, and 74.14% of its revenue from operations from Andhra Pradesh during Fiscal 2026, 2025, and 2024 respectively. Further, as of March 31, 2026, its export operations are spread across 8 countries, with countries such as, Singapore, Switzerland and South Korea, contributing to 17.63%, 37.03% and 39.83% of its revenue from operations, during the Fiscal 2024, 2025, and 2026 respectively. Any disruption, including occurrence of any internal or external factors in the State of Andhra Pradesh or in Singapore, Switzerland and South Korea may restrict its operations and adversely affect its business, results of operations and financial conditions.

Outlook

Ardee Industries is engaged in the recycling of lead which is primarily supplied to the companies in battery and metal industries. It has entered into futures derivative contracts on the London Metal Exchange (LME) to manage price volatility in pure lead. These hedging activities are undertaken in consultation with senior management and are implemented within the framework of board-approved risk management policies and pre-defined exposure limits. On the concern side, any under-utilization of capacity of its Manufacturing Facility and an inability to effectively optimize its operations may have an adverse effect on its business and future financial performance.

The issue has been offering 8,39,74,436 shares in a price band of Rs 50-53 per equity share. The aggregate size of the offer is around Rs 419.87 crore to Rs 445.06 crore based on lower and upper price band respectively. Minimum application is to be made for 281 shares and in multiples thereon, thereafter. On performance front, its total income increased by 57.21% to Rs 11,688.83 million for Fiscal 2026 from Rs 7,435.26 million for Fiscal 2025. Its profit after tax increased by 154.52% to Rs 846.81 million for Fiscal 2026 from Rs 332.71 million for Fiscal 2025.

Meanwhile, it undertakes recovery and recycling of end-of-life energy storage products and non-ferrous scrap into high-quality materials. The main products derived from such products include, pure lead and lead alloys. During its manufacturing process, plastic scrap/ chips are also generated. It intends to expand the diversification of such derivative products i.e. plastic scrap/ chips by converting them into plastic granules and undertaking refining and recycling of tin and copper waste products along with expansion of capacities for its existing products.  In addition, it intends to further expand its market reach by strengthening its presence in existing international markets such as Hong Kong, Switzerland, and Japan. The export transactions generally involve longer receivable cycles compared to domestic sales. Therefore, it intends to bridge time gap between shipment dispatch and payment realization by deploying the additional working capital.