Admach Systems Limited Makes Weak Debut with 20.00% Decline, Lists at ₹191.20 Against Modest Subscription

Admach Systems Limited, incorporated in 2008 engaged in designing, manufacturing, exporting, and supplying customised special purpose machines and automation systems for Indian and global engineering industry primarily catering to steel, automobile, food, tooling, and other engineering industries specializing in special purpose machines, robotic material handling systems, automation, assembly machines, packaging machines, and product design operating at production capacity of 100 units annually achieving 100% capacity utilization in FY25, made a weak debut on BSE SME on December 31, 2025. After closing its IPO bidding between December 23-26, 2025, the company commenced trading with a severe decline of 20.00% opening at ₹191.20 and touched ₹200.75 (down 16.00%).

Admach Systems Limited Listing Details

Admach Systems launched its IPO at ₹239 per share with minimum investment of 1,200 shares costing ₹2,86,800. The IPO received modest response with subscription of 4.13 times - individual investors at 3.77 times, QIB at 1.55 times, NII at 7.40 times.

First-Day Trading Performance

Listing Price: Admach Systems opened at ₹191.20 representing severe decline of 20.00% from issue price of ₹239.00, touched high of ₹200.75 (down 16.00%), with VWAP at ₹192.01, reflecting extremely negative market sentiment with opening decline of 20% creating massive investor losses despite analyst stating issue appears fully priced and recommending for well-informed and cash surplus investors.

Growth Drivers and Challenges

Growth Drivers:

Exceptional Growth Trajectory: Revenue surged 170% and PAT jumped 82% between FY24 and FY25, exceptional ROE of 43.94%, ROCE of 44.00%, RoNW of 27.69%, healthy PAT margin of 11.43%, strong EBITDA margin of 19.32%.

Operational Excellence: Experienced promoters supported by management and execution team, production capacity of 100 units annually with 100% capacity utilization in FY25 reflecting consistent growth in demand, diversified customer base across steel, automobile, food, tooling industries.

Product Portfolio: Comprehensive offerings including black bar solutions, bar chamfering machines, bar straightener machines, bright bar solutions, grinding solutions, super finishing solutions, robotic material handling systems, automation, assembly machines, packaging machines.

Challenges:

Severe Market Rejection: Opening decline of 20.00% creating massive investor losses despite modest subscription of 4.13 times, demonstrating complete disconnect between fundamentals and market sentiment.

Profit Quality Concerns: Analyst highlights boosted numbers from FY25 onwards raises eyebrows and concern over sustainability going forward, issue appears fully priced, tiny paid-up equity capital post-IPO indicating longer gestation period for mainboard migration.

Operational Risks: Debt-to-equity of 0.48, total borrowings of ₹10.66 crore, operating in specialized niche market with limited scalability, significant promoter dilution from 71.87% to 52.95%, vulnerable to capital equipment spending cycles and manufacturing sector slowdowns.

Utilisation of IPO Proceeds

Capacity Expansion: ₹16.47 crore for funding capital expenditure requirements towards purchase of new machinery and installation costs enhancing production capabilities.

Working Capital: ₹15.50 crore for funding working capital requirements supporting manufacturing operations and inventory management.

General Corporate Purposes: Remaining proceeds for general corporate purposes supporting operational needs and strategic initiatives.

Financial Performance

Revenue: ₹53.52 crore for FY25, phenomenal growth of 170% from ₹19.80 crore in FY24.

Net Profit: ₹6.10 crore in FY25, growth of 82% from ₹3.35 crore in FY24, demonstrating operational leverage though analyst questions sustainability of boosted numbers.

Financial Metrics: Exceptional ROE of 43.94%, ROCE of 44.00%, debt-to-equity of 0.48, PAT margin of 11.43%, EBITDA margin of 19.32%, price-to-book of 5.41x, post-issue EPS of ₹17.82, P/E of 13.41x, borrowings of ₹10.66 crore, and market capitalisation of ₹135.96 crore representing severe listing decline with 20% opening loss despite strong historical growth trajectory.