Divyadhan Recycling Industries IPO Listing Details

Divyadhan Recycling Industries Limited, a manufacturer of recycled polyester staple fiber and recycled pellets, made a strong debut on the Indian stock market on Friday, 4th October 2024, with its shares listing at a significant premium to the issue price on the National Stock Exchange (NSE) SME platform.

Listing Details

• Listing Price: Divyadhan Recycling Industries shares were listed at ₹84 per share on the NSE SME platform, marking a strong start to its journey as a publicly traded company.
• Comparison to Issue Price: The listing price represents a substantial premium over the IPO issue price. Divyadhan Recycling Industries had set its IPO price band from ₹60 to ₹64 per share, with the final issue price being fixed at the upper end of ₹64.
• Percentage Change: The listing price of ₹84 on the NSE SME translates to a premium of 31.25% over the issue price of ₹64.

First-Day Trading Performance

• Opening vs. Latest Price: Following its strong opening, Divyadhan Recycling Industries' share price continued to rise. By 10:33 AM, the stock was trading at ₹88.20, up 5% from its opening price and 37.81% above the issue price, hitting the upper circuit for the day.
• Market Capitalisation: As of 10:33 AM, the company's market capitalisation stood at ₹126.19 crore.
• Trading Volume: The traded volume was 15.28 lakh shares with a traded value of ₹12.93 crore, indicating significant investor interest on the first day of listing.

Market Sentiment and Analysis

• Market Reaction: The market reacted very positively to Divyadhan Recycling Industries' listing. The strong listing premium and hitting the upper circuit indicate robust demand and investor confidence in the company's prospects.
• Subscription Rate: The IPO was oversubscribed by 40.93 times, with NIIs leading at 76.03 times subscription, followed by retail investors at 32.43 times, and QIBs at 29.39 times.
• Grey Market Premium: Prior to listing, shares were trading without a premium in the grey market, which was significantly surpassed at listing.

Growth Drivers and Challenges

Expected drivers of future performance:

• Growing demand for recycled polyester products
• Quality certifications including ISO 14001:2015
• Established manufacturing facility with significant capacity
• Focus on environmentally friendly recycling processes

Potential challenges:

• Competitive recycled materials manufacturing sector
• Potential volatility in raw material (PET bottle) prices
• Dependence on textile and packaging industries

Utilisation of IPO Proceeds

Divyadhan Recycling Industries plans to use the funds for:

• Meeting capital expenditure requirements
• General corporate purposes
• Covering issue expenses

Financial Performance

The company has demonstrated moderate financial growth:

• Revenue increased by 2% to ₹5,912.88 lakh in FY2024 from ₹5,815.51 lakh in FY2023
• Profit After Tax (PAT) rose by 10% to ₹237.8 lakh in FY2024 from ₹216.18 lakh in FY2023

As Divyadhan Recycling Industries begins its journey as a listed entity, market participants will closely monitor its ability to leverage its position in the growing recycled materials market and expand its operations to drive future growth and shareholder value. The strong listing and overwhelming subscription rates suggest very positive market sentiment towards the company's prospects in the specialized recycled polyester manufacturing sector.