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What is the story about?
The initial public offering (IPO) of CMR Green Technologies, a non-ferrous metal recycler focused on aluminium and zinc die-casting alloys, will open for subscription on Wednesday, June 3, and close on June 5.
The company has fixed a price band of ₹182-192 per share, with investors required to bid for a minimum of 78 shares and in multiples thereafter.
At the upper end of the price band, retail investors will need to invest at least ₹14,976 for one lot, while the maximum permissible retail application of 13 lots (1,014 shares) would require an investment of ₹1,94,688.
Should you subscribe to the IPO?
SBI Securities: Subscribe
SBI Securities has recommended subscribing to the issue, citing CMR Green Technologies' leadership position in the domestic aluminium recycling industry.
The brokerage said that the company is the largest player in India's aluminium recycling segment by installed capacity and has established risk-management practices, including the use of derivative instruments such as forward contracts to hedge against foreign exchange and commodity price fluctuations.
SBI Securities expects the company to benefit from strong industry tailwinds, with India's recycled aluminium market projected to grow at a CAGR of 11.2% by volume and 13.2% by value between FY26 and FY30.
At the upper price band of ₹192 per share, the issue is valued at a post-issue P/E of 27.1x FY25 earnings and 20.3x annualised 9MFY26 earnings. Based on these factors, the brokerage has assigned a "Subscribe" rating to the IPO.
Swastika Investmart: Neutral
Swastika Investmart has assigned a "Neutral" rating to the issue, while suggesting that high-risk investors may consider it for potential listing gains.
The brokerage acknowledged the company's industry-leading capacities and strong relationships with customers but flagged concerns around the offer structure and financial track record.
"The valuation at 27.13x P/E appears attractive relative to peers and the turnaround in FY25 is encouraging. However, the entirely offer-for-sale nature of the issue and the loss reported in FY24 remain key concerns," the brokerage said.
It added that thin operating margins and customer concentration risks limit the margin of safety, making it a relatively high-risk offering.
Anchor investors infuse ₹188 crore
Ahead of the IPO launch, CMR Green Technologies raised ₹188.4 crore from anchor investors on June 2.
The company allotted 98.14 lakh shares to 15 anchor investors at the upper price band of ₹192 per share.
Of the total anchor allocation, 61.31 lakh shares were allotted to seven domestic mutual funds through 10 schemes, including those managed by SBI Mutual Fund, ICICI Prudential Mutual Fund, HDFC Mutual Fund, Nippon India Mutual Fund and Kotak Mahindra Mutual Fund.
Two life insurance companies, Bajaj Allianz Life Insurance and Kotak Mahindra Life Insurance, were allotted 6.77 lakh shares.
Among foreign investors, Goldman Sachs Funds acquired 10.41 lakh shares worth about ₹20 crore, while BNP Paribas Funds Emerging Markets Environmental Solutions purchased 4.01 lakh shares valued at ₹7.71 crore. Citigroup and Susquehanna Pacific Securities also picked up 2.6 lakh shares each, amounting to nearly ₹5 crore apiece.
Issue structure
CMR Green Technologies aims to raise ₹630.9 crore through the IPO by offering 3.28 crore equity shares.
The public issue is entirely an offer-for-sale (OFS) by the promoters and investor Global Scrap Processors. As a result, the company will not receive any proceeds from the issue, and all net proceeds, excluding issue-related expenses, will accrue to the selling shareholders.
The promoter holding will come down to 84% as against 86.9% following the OFS.
CMR Green Technologies is India's largest non-ferrous metal recycler by installed capacity and holds the highest market share among listed peers in the secondary aluminium segment in terms of revenue.
Equirus Capital, ICICI Securities and Motilal Oswal Investment Advisors are the book-running lead managers to the issue.
The company has fixed a price band of ₹182-192 per share, with investors required to bid for a minimum of 78 shares and in multiples thereafter.
At the upper end of the price band, retail investors will need to invest at least ₹14,976 for one lot, while the maximum permissible retail application of 13 lots (1,014 shares) would require an investment of ₹1,94,688.
Should you subscribe to the IPO?
SBI Securities: Subscribe
SBI Securities has recommended subscribing to the issue, citing CMR Green Technologies' leadership position in the domestic aluminium recycling industry.
The brokerage said that the company is the largest player in India's aluminium recycling segment by installed capacity and has established risk-management practices, including the use of derivative instruments such as forward contracts to hedge against foreign exchange and commodity price fluctuations.
SBI Securities expects the company to benefit from strong industry tailwinds, with India's recycled aluminium market projected to grow at a CAGR of 11.2% by volume and 13.2% by value between FY26 and FY30.
At the upper price band of ₹192 per share, the issue is valued at a post-issue P/E of 27.1x FY25 earnings and 20.3x annualised 9MFY26 earnings. Based on these factors, the brokerage has assigned a "Subscribe" rating to the IPO.
Swastika Investmart: Neutral
Swastika Investmart has assigned a "Neutral" rating to the issue, while suggesting that high-risk investors may consider it for potential listing gains.
The brokerage acknowledged the company's industry-leading capacities and strong relationships with customers but flagged concerns around the offer structure and financial track record.
"The valuation at 27.13x P/E appears attractive relative to peers and the turnaround in FY25 is encouraging. However, the entirely offer-for-sale nature of the issue and the loss reported in FY24 remain key concerns," the brokerage said.
It added that thin operating margins and customer concentration risks limit the margin of safety, making it a relatively high-risk offering.
Anchor investors infuse ₹188 crore
Ahead of the IPO launch, CMR Green Technologies raised ₹188.4 crore from anchor investors on June 2.
The company allotted 98.14 lakh shares to 15 anchor investors at the upper price band of ₹192 per share.
Of the total anchor allocation, 61.31 lakh shares were allotted to seven domestic mutual funds through 10 schemes, including those managed by SBI Mutual Fund, ICICI Prudential Mutual Fund, HDFC Mutual Fund, Nippon India Mutual Fund and Kotak Mahindra Mutual Fund.
Two life insurance companies, Bajaj Allianz Life Insurance and Kotak Mahindra Life Insurance, were allotted 6.77 lakh shares.
Among foreign investors, Goldman Sachs Funds acquired 10.41 lakh shares worth about ₹20 crore, while BNP Paribas Funds Emerging Markets Environmental Solutions purchased 4.01 lakh shares valued at ₹7.71 crore. Citigroup and Susquehanna Pacific Securities also picked up 2.6 lakh shares each, amounting to nearly ₹5 crore apiece.
Issue structure
CMR Green Technologies aims to raise ₹630.9 crore through the IPO by offering 3.28 crore equity shares.
The public issue is entirely an offer-for-sale (OFS) by the promoters and investor Global Scrap Processors. As a result, the company will not receive any proceeds from the issue, and all net proceeds, excluding issue-related expenses, will accrue to the selling shareholders.
The promoter holding will come down to 84% as against 86.9% following the OFS.
CMR Green Technologies is India's largest non-ferrous metal recycler by installed capacity and holds the highest market share among listed peers in the secondary aluminium segment in terms of revenue.
Equirus Capital, ICICI Securities and Motilal Oswal Investment Advisors are the book-running lead managers to the issue.
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