Ecoline Exim Makes Weak Debut with 4.33% Discount, Lists at ₹134.90 Against Moderate Subscription

Ecoline Exim Limited, the sustainable packaging and promotional bags manufacturer, made a disappointing debut on NSE SME on September 30, 2025. After closing its IPO bidding between September 23-25, 2025, the company commenced trading with a 0.11% discount, opening at ₹140.85 and declining to ₹134.90 with losses of 4.33%.

Ecoline Exim Listing Details

Ecoline Exim Limited launched its IPO at ₹141 per share with a minimum investment of 2,000 shares costing ₹2,82,000. The IPO received a moderate response with a subscription of 6.06 times - retail investors at a modest 4.37 times, NII at a moderate 5.41 times, and QIB at a solid 9.51 times.

First-Day Trading Performance Outlook

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• Listing Price: Ecoline Exim share price opened at ₹140.85, representing a minimal discount of 0.11% from the issue price of ₹141, but declined to ₹134.90, delivering losses of 4.33% for investors, reflecting negative market sentiment.

Growth Drivers and Challenges

Growth Drivers:

• Sustainable Business Model: Focus on eco-friendly cotton and jute packaging solutions aligned with global environmental trends and the three R's principle (Reduce, Reuse, Recycle), serving growing demand for sustainable packaging.
• Global Export Presence: Products are exported to over 27 countries, including the European Union, the USA, Japan, and Southeast Asia, providing geographical diversification and international market exposure.
• Integrated Manufacturing: Three strategically located manufacturing units in Ahmedabad and West Bengal with in-house design expertise, ensuring quality control and operational efficiency.
• Reasonable Valuation: Post-IPO P/E of 15.37x and price-to-book value of 2.58x, providing relatively modest valuation metrics compared to industry standards.

Challenges

• Declining Financial Trend: Revenue decreased 3% to ₹273.07 crore in FY25 with PAT dropping 17% to ₹18.82 crore, indicating challenging market conditions and operational headwinds in the packaging sector.
• Inconsistent Performance: Erratic bottom-line performance across reported periods raises concerns about business stability, demand predictability, and margin sustainability in a competitive environment.
• Competitive Market Pressure: Operating in a highly competitive and fragmented sustainable packaging segment with numerous players affecting pricing power and market share retention.
• Economic Sensitivity: Export-dependent businesses is vulnerable to currency fluctuations, international trade policies, and global economic conditions affecting demand from overseas markets.

Utilisation of IPO Proceeds

• Capacity Expansion: ₹50.00 crore for funding capital expenditure towards construction of building, mechanical and electrical works, and procurement of plant and machinery for new manufacturing facility at Ahmedabad.
• General Corporate Purposes: Supporting business operations, strategic initiatives, and expansion activities for long-term growth in the sustainable packaging market.

Financial Performance of Ecoline Exim

• Revenue: ₹273.07 crore for FY25, showing a decline of 3% from ₹280.59 crore in FY24, reflecting challenging market conditions and demand pressures in the sustainable packaging sector.
• Net Profit: ₹18.82 crore in FY25, representing a decline of 17% from ₹22.59 crore in FY24, indicating margin pressure and operational challenges amid a competitive environment.
• Financial Metrics: Strong ROE of 23.51%, solid ROCE of 21.14%, moderate debt-to-equity ratio of 0.45, modest PAT margin of 6.99%, healthy EBITDA margin of 11.14%, and estimated market capitalisation of ₹276.75 crore.