Aritas Vinyl IPO Makes Flat Debut then Hits Lower Circuit, Lists at ₹47 Against Tepid 2.21x Subscription

Aritas Vinyl Ltd, an Ahmedabad-based company incorporated in 2020 engaged in manufacturing and trading of technical textiles such as artificial leather also known as PU Synthetic leather and PVC-coated leather using latest Transfer Coating Technology, producing products for automotive upholstery, fashion accessories, and interior design serving distributors, wholesalers, manufacturers, and exporting to countries like Greece, Oman, UAE, Sri Lanka, USA, and SEZs promoting synthetic leather over traditional animal leather, made a weak debut on BSE SME on Friday, January 23, 2026. After closing its IPO bidding between January 16-20, 2026, the company commenced trading flat at issue price of ₹47.00 before quickly hitting lower circuit at ₹44.65 (down 5%).

Aritas Vinyl Listing Details

Aritas Vinyl launched its IPO at ₹47 per share with minimum investment of 6,000 shares costing ₹2,82,000. The IPO received lukewarm response with subscription of only 2.21 times - individual investors at 2.88 times, NII at 1.24 times.

First-Day Trading Performance

Listing Price: Aritas Vinyl opened at ₹47.00 representing flat listing at issue price of ₹47.00, quickly hit lower circuit at ₹44.65 (down 5%), with VWAP at ₹46.98, reflecting negative market sentiment with immediate selling pressure post-listing creating investor losses with market capitalisation of ₹87.91 crore against pre-IPO market cap of ₹92.54 crore and turnover of ₹1.70 crore with traded volume of 3.63 lakh shares showing only sell-side interest.

Growth Drivers and Challenges

Growth Drivers:

Strategic Manufacturing Setup: Fully integrated manufacturing plant at Kubadthal, Ahmedabad spanning 6,067 sq. meters with annual capacity of 7.8 million square meters.

Product Diversification: Wide range of artificial leather products for automotive upholstery (seats, door trims, steering wheel covers), fashion accessories (bags, wallets, laptop sleeves, purses), and interior design (wall coverings, upholstery) available in various colors and textures.

Export Presence: Supplies to distributors, wholesalers, manufacturers with exports to Greece, Oman, UAE, Sri Lanka, USA, and SEZs promoting synthetic leather as a sustainable alternative to traditional animal leather.

Financial Growth: Revenue of ₹98.02 crore in FY25 versus ₹69.25 crore in FY24, PAT margin improving to 5.97%, EBITDA margin of 11.20%.

Challenges:

Weak Market Response: IPO barely subscribed at 2.21 times with QIB at just 1.00 times and only 2,304 applications, flat listing followed by immediate lower circuit hit at 5% down creating investor losses.

Aggressive Pricing: Analyst categorically states issue appears aggressively priced with recommendation that there is no harm in skipping this pricey bet.

High Leverage: Debt-to-equity ratio of 1.65 with total borrowings of ₹37.78 crore against net worth of ₹22.77 crore indicating significant financial leverage, significant promoter dilution from 47.22% to 27.99% post-IPO.

Competitive Segment: Operating in highly competitive and fragmented artificial leather segment with multiple established players limiting pricing power.

Utilisation of IPO Proceeds

Working Capital: ₹20.45 crore for funding working capital requirements representing largest allocation supporting artificial leather manufacturing operations.

Solar Power Project: ₹4.26 crore for capital expenditure on solar power project reducing energy costs and enhancing sustainability.

General Corporate Purposes: Remaining amount for general corporate purposes.

Financial Performance

Revenue: ₹40.58 crore for 5 months ended August 2025, ₹98.02 crore for FY25, growth from ₹69.25 crore in FY24 and ₹51.42 crore in FY23.

Net Profit: ₹2.42 crore for 5 months FY26, ₹4.13 crore in FY25, growth from ₹1.67 crore in FY24, demonstrating improving profitability with post-IPO EPS of ₹2.95 and P/E of 15.93x.