Sharvaya Metals Makes Volatile Debut with Initial 12% Gain Before Hitting Lower Circuit

Sharvaya Metals Limited, the aluminium products manufacturer specialising in alloyed ingots and electric vehicle components, made a volatile debut on BSE SME on September 12, 2025. After closing its IPO bidding between September 4-9, 2025, the company commenced trading with an initial 11.73% premium at ₹219, but quickly declined to hit the lower circuit at ₹208.05, leaving investors with a reduced 6.15% gain from the issue price of ₹196.

Sharvaya Metals Listing Details

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Sharvaya Metals Limited launched its IPO at ₹196 per share with a minimum investment of 1,200 shares costing ₹2,35,200. The IPO received a moderate response with a subscription of 4.83 times - retail investors leading at 6.31 times, NII at 6.09 times, and QIB at only 1.28 times, indicating mixed investor confidence with poor institutional participation in the aluminium manufacturing business.

First-Day Trading Performance Outlook

Listing Price: The Sharvaya Metals share price opened at ₹219 on BSE SME, initially delivering an 11.73% premium before declining sharply to the lower circuit at ₹208.05, representing a final 6.15% gain from the issue price of ₹196, demonstrating significant intraday volatility and investor uncertainty.

Growth Drivers and Challenges

Growth Drivers:

• Explosive Financial Growth: Revenue surged by 58% to ₹112.76 crore in FY25 with PAT skyrocketing 715% to ₹12.51 crore, reflecting substantial operational improvements and demand for aluminium products.
• Outstanding Profitability Metrics: Exceptional ROE of 54.92%, impressive ROCE of 49.39%, healthy PAT margin of 11.12%, and solid EBITDA margin of 17.16% indicating strong operational efficiency and market positioning.
• Integrated Manufacturing Capabilities: Fully integrated facility with PLC-controlled furnace and advanced machinery for producing aluminium sheets, billets, ingots, and specialised products for automotive and EV sectors.
• Electric Vehicle Market Exposure: Strategic positioning in the growing EV battery enclosure market, providing future growth opportunities aligned with India's electric mobility transition.

Challenges:

• Profit Sustainability Concerns: A Sudden 715% jump in profits raises serious questions about financial data authenticity and sustainability, with reviewer concerns about "cooked up" pre-IPO financials for inflated valuations.
• Poor Institutional Confidence: Weak QIB subscription at 1.28 times indicates institutional scepticism about business prospects and financial credibility.
• Volatile Market Reception: Sharp decline from listing premium to lower circuit demonstrates significant investor uncertainty and potential overvaluation concerns.
• Highly Competitive Market: Operating in a fragmented aluminium products sector with pricing pressures, raw material cost volatility, and intense competition from established players.

Utilisation of IPO Proceeds

• Capacity Expansion: ₹20.40 crore for plant and machinery purchase plus ₹5.17 crore for civil construction and electrification, enhancing manufacturing capabilities.
• Working Capital: ₹9 crore for working capital requirements supporting aluminium products manufacturing and business operations.
• General Corporate Purposes: ₹7.30 crore for general corporate purposes supporting business expansion and strategic initiatives.

Financial Performance of Sharvaya Metals

• Revenue: ₹112.76 crore for FY25, showing strong growth of 58% from ₹71.58 crore in FY24, reflecting robust demand for aluminium products. 
• Net Profit: ₹12.51 crore in FY25, representing explosive growth of 715% from ₹1.54 crore in FY24, though raising serious sustainability and authenticity concerns.
• Financial Metrics: Outstanding ROE of 54.92%, impressive ROCE of 49.39%, moderate debt-to-equity ratio of 0.66, strong RoNW of 54.92%, healthy PAT margin of 11.12%, and solid EBITDA margin of 17.16%.