Sundrex Oil Company Limited Makes Weak Debut with 20.00% Decline, Lists at ₹68.80 Against Poor Subscription

Sundrex Oil Company Limited, incorporated in 2010 as manufacturer and wholesaler of high-performance industrial and automotive lubricants, greases, and specialty products serving industries in India and neighboring countries offering product portfolio including hydraulic oil, gear oil, multigrade and monograde diesel engine oil, transformer oil, rust preventive oil, and refrigeration oil manufacturing products under own brand, made a weak debut on NSE SME on December 30, 2025. After closing its IPO bidding between December 22-24, 2025, the company commenced trading with a severe decline of 20.00% opening at ₹68.80 and hit lower circuit at ₹65.40 (down 23.95%).

Sundrex Oil Company Limited Listing Details

Sundrex Oil launched its IPO at ₹86 per share with minimum investment of 3,200 shares costing ₹2,75,200. The IPO received poor response with subscription of 1.53 times - individual investors at 1.90 times, QIB at 1.00 times (just subscribed), NII at 1.01 times.

First-Day Trading Performance

Listing Price: Sundrex Oil opened at ₹68.80 representing severe decline of 20.00% from issue price of ₹86.00, quickly hit lower circuit at ₹65.40 (down 23.95%), with VWAP at ₹67.34.

Growth Drivers and Challenges

Growth Drivers:

Strong Growth Trajectory: Revenue increased 41% and PAT surged 112% between FY24 and FY25, exceptional ROE of 35.63%, ROCE of 27.03%, RoNW of 35.63%, PAT margin of 8.10%, EBITDA margin of 13.68%.

Operational Capabilities: In-house manufacturing with state-of-the-art quality control, strategic location advantage, direct sales model with diversified client base, experienced management and skilled workforce of 73 employees.

Business Model: Diversified product portfolio across industrial and automotive lubricants, contract manufacturing services including toll blending and contract packaging, labeling services allowing businesses to market products under their brand, focus on vertical integration and product line expansion.

Challenges:

Severe Market Rejection: Opening decline of 20.00% followed by immediate lower circuit hit at 23.95% down creating massive investor losses, extremely poor subscription of 1.53 times with QIB at just 1.00 times and big HNI undersubscribed at 0.97 times.

Margin Sustainability Concerns: Analyst highlights surge in margins from FY25 onwards in pre-IPO periods surprises all raising sustainability questions, issue appears aggressively priced, operating in highly competitive industrial lubricants manufacturing segment.

Financial Risks: High debt-to-equity of 1.14, total borrowings of ₹17.38 crore, ₹2.58 crore of IPO proceeds for debt repayment, significant promoter dilution from 100% to 72%.

Utilisation of IPO Proceeds

Working Capital: ₹20.87 crore for meeting working capital expenses supporting lubricants manufacturing and distribution operations.

Capital Expenditure: ₹0.73 crore for meeting capital expenditure requirements for equipment and infrastructure.

Debt Repayment: ₹2.58 crore for prepayment and repayment of certain secured and unsecured loans.

General Corporate Purposes: ₹4.52 crore for general corporate purposes supporting operational needs and strategic initiatives.

Financial Performance

Revenue: ₹69.12 crore for FY25, growth of 41% from ₹49.19 crore in FY24, reflecting expanding industrial and automotive lubricants manufacturing and wholesaling operations.

Net Profit: ₹5.44 crore in FY25, growth of 112% from ₹2.57 crore in FY24, demonstrating dramatic improvement in profitability though analyst questions sustainability of margin surge.

Financial Metrics: Exceptional ROE of 35.63%, high debt-to-equity of 1.14, ROCE of 27.03%, PAT margin of 8.10%, EBITDA margin of 13.68%, price-to-book of 5.43x, pre-issue EPS of ₹8.04, P/E of 10.69x, borrowings of ₹17.38 crore, and market capitalisation of ₹87.59 crore representing severe listing decline with 20% opening loss followed by lower circuit creating 23.95% maximum losses despite growth trajectory.