Abril Paper Tech Makes Poor Debut with 20% Discount, Falling Short of Market Expectations

Abril Paper Tech Limited, the sublimation heat transfer paper manufacturer, made a disappointing debut on BSE SME on September 5, 2025. After closing its IPO bidding between August 29 - September 2, 2025, the company commenced trading with a significant 20% discount at ₹48.80, falling well below the issue price of ₹61 and reflecting weak investor confidence in the specialty paper manufacturing sector.

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Abril Paper Tech Listing Details

Abril Paper Tech IPO launched at ₹61 per share with a minimum investment of 4,000 shares costing ₹2,44,000. The IPO received a moderate response with a subscription of 11.20 times - retail investors leading at 16.79 times and NII at 5.51 times, indicating mixed investor interest with strong retail participation but limited institutional confidence in the specialty paper business.

First-Day Trading Performance Outlook

Listing Price: The Abril Paper Tech share price opened at ₹48.80 on BSE SME, representing a discount of 20% from the issue price of ₹61, delivering significant losses for investors and falling well short of market expectations.

Growth Drivers and Challenges

Growth Drivers:

• Strong Revenue Growth: Revenue surged by 142% to ₹60.91 crore in FY25 from ₹25.13 crore in FY24, reflecting robust demand for sublimation heat transfer paper in digital printing applications.
• Diversified End Markets: Products used across digital printing, garments, textile, hosiery, household curtains, and furniture industries providing multiple revenue streams and market opportunities.
• Manufacturing Capabilities: Wide product range from 30 GSM to 90 GSM papers in various sizes from 24 to 72 inches, serving diverse customer requirements in the digital printing sector.
• Low Debt Profile: Minimal debt-to-equity ratio of 0.10 indicating strong financial position and low leverage concerns.

Challenges:

• Poor Market Reception: Significant 20% discount at listing indicates severe investor concerns about business prospects, valuation sustainability, and growth potential in the specialty paper sector.
• Profitability Concerns: Low PAT margin of 2.32% and EBITDA margin of 3.30% indicating thin margins and operational efficiency challenges in the competitive paper manufacturing market.
• High Valuation Metrics: Post-IPO P/E ratio of 34.46 indicating aggressive pricing that appears unsustainable given the poor listing performance and modest profit margins.
• Recent Incorporation: Company incorporated only in 2023 indicating limited operational track record and business maturity for such valuation expectations.

Utilisation of IPO Proceeds

• Capacity Expansion: ₹5.40 crore for capital expenditure towards purchase of machinery enhancing production capabilities and manufacturing capacity.
• Working Capital Requirements: ₹5 crore for funding working capital needs supporting business operations and inventory management in specialty paper manufacturing.
• General Corporate Purposes: ₹2.01 crore for general corporate purposes supporting business expansion and strategic initiatives.

Financial Performance of Abril Paper Tech

Revenue: ₹60.91 crore for FY25, showing exceptional growth of 142% from ₹25.13 crore in FY24, reflecting strong demand for sublimation heat transfer paper products. Net Profit: ₹1.41 crore in FY25, representing growth of 52% from ₹0.93 crore in FY24, though indicating modest profitability levels relative to revenue growth. Financial Metrics: Moderate ROE of 18.03%, solid ROCE of 16.38%, low debt-to-equity ratio of 0.10, good RoNW of 13.43%, low PAT margin of 2.32%, modest EBITDA margin of 3.30%, high Price to Book Value of 3.35, and market capitalisation of ₹48.69 crore.