Aaradhya Disposal IPO Lists at 4.31% Discount

The paper products manufacturer, Aaradhya Disposal Industries Limited, made a weak debut on NSE SME on August 11, 2025. After closing its IPO bidding between August 4-6, 2025, the company commenced trading with a 4.31% discount at ₹111, reflecting cautious investor sentiment despite strong financial growth trajectory and focus on sustainable paper solutions.

Aaradhya Disposal Listing Details

Aaradhya Disposal Limited launched its IPO at ₹116 per share with a minimum investment of 2,400 shares costing ₹2,78,400. The IPO received weak response with a subscription of only 1.41 times - QIB at 2.51 times, individual investors at 1.46 times, whilst NII participation remained subdued at 1.25 times, indicating limited investor interest in the paper manufacturing business model.

Don’t Miss Out on the Next Big IPO – Invest With Just a Few Clicks!

Open Account Now

First-Day Trading Performance Outlook

Listing Price: The Aaradhya Disposal share price opened at ₹111 on NSE SME, representing a discount of 4.31% from the issue price of ₹116, delivering losses for investors and highlighting market concerns about paper industry fundamentals despite sustainability focus.

Growth Drivers and Challenges

Growth Drivers:

Strong Financial Performance: Revenue surged 54% to ₹113.69 crore in FY25 with PAT jumping 158% to ₹10.27 crore, reflecting robust demand for paper products and operational efficiency improvements.

Sustainable Product Portfolio: Manufacturing paper cup blanks, food grade papers, and eco-friendly solutions including PE coated, PLA coated, and barrier coated products catering to growing sustainability trends.

Strategic Manufacturing Setup: Operational facility in Dewas, Madhya Pradesh with 15,000 metric tonnes per annum capacity across 52,151 square feet, ensuring efficient production and distribution capabilities.

Export Market Presence: Serving Indian and global markets with exports to Asia and Middle East, providing geographic diversification and revenue growth opportunities.

Challenges:

Weak Market Reception: Poor subscription response of only 1.41 times indicates limited investor confidence in the business model and growth prospects.

High Debt Burden: Significant debt-to-equity ratio of 1.35 with total borrowings of ₹39.66 crore creating financial leverage concerns affecting cash flows.

Revenue Inconsistency: Inconsistent top-line performance across reporting periods indicating potential business volatility and market challenges.

Competitive Market Environment: Operating in competitive paper manufacturing sector with pricing pressures and raw material cost fluctuations affecting margins.

Utilisation of IPO Proceeds

Working Capital Requirements: ₹20 crore for funding working capital requirements supporting inventory management and business operations in the paper manufacturing sector.

Expansion Plans: ₹15.86 crore for capital expenditure towards purchase of plant, machinery, and civil work to expand production capacity and capabilities.

Debt Reduction: ₹1.60 crore for prepayment of term loans improving capital structure and reducing financial leverage burden.

Financial Performance of Aaradhya Disposal

Revenue: ₹113.69 crore for FY25, showing strong 54% growth from ₹73.93 crore in FY24, reflecting demand recovery and market expansion in the paper products segment.

Net Profit: ₹10.27 crore in FY25, representing exceptional 158% growth from ₹3.99 crore in FY24, indicating improved operational efficiency and margin expansion.

Financial Metrics: Strong ROE of 44.53%, moderate ROCE of 25.15%, high debt-to-equity of 1.35, solid RoNW of 34.87%, healthy PAT margin of 9.04%, moderate EBITDA margin of 15.69%, and market capitalisation of ₹164 crore.