CMR Green Technologies launches ₹6300M IPO amid volatile market conditions

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CMR Green Technologies has moved ahead with its public listing at a time when several companies have delayed IPO plans due to volatile market conditions. The INR 6,300 million (USD 66.16 million) issue is a pure offer-for-sale (OFS), with no fresh issue component, and is also the first mainboard IPO to hit the market in more than a month.

The launch comes at a time when investor sentiment toward OFS-heavy IPOs has remained cautious. Even so, Chairman and Managing Director Mohan Agarwal said the company remains confident about the business and the timing of the issue.

The management also said roadshows with institutional investors gave the company confidence to proceed with the IPO despite ongoing market uncertainty.

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The company has chosen not to include a fresh issue in the offering even as it continues to expand capacity. Management said debt remains a more efficient source of funding when leverage is maintained at comfortable levels. The company’s debt-to-equity ratio currently stands at 0.76. It added that the business continues to generate cash and has largely funded expansion plans through operational cash flows.

Compared with listed peers, the company currently reports lower EBITDA and profit margins. Management said aluminium recycling is a volume-driven business where margins are typically narrow, adding that return on capital employed and operational efficiency are more relevant indicators for the sector.

The company said scale remains critical in aluminium recycling and that it continues to focus on process controls, sourcing efficiency and technology adoption to improve recovery rates and margins.

Its recycled aluminium products are primarily supplied to automobile manufacturers and Tier-1 auto component makers. The company is also expanding into beverage can recycling, as well as aluminium demand linked to solar manufacturing and electric vehicles.

The IPO structure has also been revised. Promoters were initially expected to sell 4.29 crore equity shares, but the issue size has now been reduced to 3.28 crore shares.

Promoters, including Mohan Agarwal, Gauri Shankar Agarwal HUF and Mohan Agarwal HUF, will together sell 6.46 million shares through the OFS.

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Investor Global Scrap Processors will sell the largest portion of the offer at around 26 million shares.

The IPO will remain open for public subscription until June 5, while the one-day anchor investor portion is scheduled to open on June 2.

CMR Green Technologies is one of India’s largest aluminium recycling companies and said it holds around 45 per cent market share in its segment. The company added that its operating scale is around four times larger than its nearest domestic competitor.