Solvex Edibles Makes Weak Debut with 10.28% Discount, Lists at ₹64.60 Against Weak Subscription

Solvex Edibles Limited, the manufacturer and distributor of solvent extracted rice bran oil and by-products, made a disappointing debut on BSE SME on October 1, 2025. After closing its IPO bidding between September 22-26, 2025, the company commenced trading with a 5.56% discount opening at ₹68 but declined further to ₹64.60 with losses of 10.28%, reflecting negative investor sentiment towards the edible oil manufacturing sector backed by weak subscription response.

Solvex Edibles Listing Details

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Solvex Edibles Limited launched its IPO at ₹72 per share with a minimum investment of 3,200 shares costing ₹2,30,400. The IPO received weak response with a subscription of just 1.02 times - individual investors at disappointing 0.73 times and NII at modest 1.31 times, indicating poor investor confidence in the rice bran oil manufacturing business with extremely subdued retail participation.

First-Day Trading Performance Outlook

Listing Price: Solvex Edibles share price opened at ₹68 representing a discount of 5.56% from the issue price of ₹72, and declined further to ₹64.60, delivering losses of 10.28% for investors reflecting negative market sentiment towards edible oil sector.

Growth Drivers and Challenges

Growth Drivers:

• Diversified Product Portfolio: Comprehensive range including crude rice bran oil, de-oiled rice bran cakes, mustard oil, mustard cakes, and de-oiled mustard cakes serving FMCG companies, cattle, poultry, and fish feed industries across 18 states nationwide.
• Strategic Manufacturing Location: Facility located in Kemri, Bilaspur, Uttar Pradesh with 200 TPD processing capacity covering 12,140 square meters enabling easy availability of raw materials and efficient nationwide distribution capabilities.
• Strong Financial Growth: Exceptional PAT growth of 305% to ₹4.09 crore and revenue growth of 90% to ₹136.46 crore in FY25, healthy ROE of 23.69%, solid ROCE of 24.51%, demonstrating improved operational performance.

Challenges:

• Extremely Weak Market Reception: Poor listing with 10.28% discount, dismal subscription of just 1.02 times, and disappointing retail participation at 0.73 times reflecting severe investor skepticism about business model and valuation sustainability.
• Profit Sustainability Concerns: Boosted profits for FY25 raising concerns about window dressing for fancy valuations, inconsistent standalone financial performance, and questions about maintaining extraordinary 305% PAT growth trajectory in competitive segment.
• Aggressive Valuation and High Risk: Post-issue P/E of 15.76x reflecting premium pricing despite execution risks, small paid-up equity indicating longer gestation period for migration, and lead manager's poor track record amplifying investor concerns.

Utilisation of IPO Proceeds

• Capital Expenditure: ₹8.31 crore for acquisition of new plant and machinery at existing facility enhancing processing capacity and operational efficiency in rice bran oil manufacturing business.
• Debt Reduction: ₹5.90 crore for repayment of outstanding borrowings improving financial leverage, reducing interest burden, and strengthening balance sheet for sustainable growth.
• General Corporate Purposes: ₹2.79 crore supporting business operations, working capital requirements, and strategic initiatives for expansion in competitive edible oil manufacturing segment.

Financial Performance of Solvex Edibles

• Revenue: ₹136.46 crore for FY25, showing impressive growth of 90% from ₹71.94 crore in FY24, reflecting strong market demand and successful business scaling in rice bran oil products.
• Net Profit: ₹4.09 crore in FY25, representing exceptional growth of 305% from ₹1.01 crore in FY24, indicating substantial operational leverage though sustainability remains questionable given magnitude of improvement.
• Financial Metrics: Healthy ROE of 23.69%, solid ROCE of 24.51%, modest PAT margin of 3.02%, reasonable EBITDA margin of 8.26%, price-to-book value of 2.56, and estimated market capitalisation of ₹57.83 crore.