Eswari Global Metal Industries Limited IPO

01At a glance

What the company does: recycles non-ferrous metal, plastic and e-waste scrap into pure lead and lead alloys, tin, aluminium alloys, copper ingots and plastic granules; lead products are about 90% of revenue (AP p.2, AP p.9).

Who pays it: battery, automotive and industrial customers in India and abroad, with 75.70% of sales exported in the nine months to December 2025, to countries including South Korea, Thailand, Singapore, Vietnam, Indonesia and Malaysia (AP p.2). Named major customers include Sebang Global Battery, Glencore International, Tata AutoComp GY Batteries and Thyssenkrupp Materials Trading Asia (AP p.3).

Why it is raising money: ₹1,500 million for phase 2 of its plant at Mundra, Gujarat, ₹2,500 million to repay borrowings of the company and its subsidiaries, and the rest for general purposes (AP p.6).

How fast it has grown: revenue from ₹9,680 million in FY23 to ₹14,076 million in FY25; profit was flat at about ₹300 million, then ₹839 million in the nine months to December 2025 (AP p.8).

The one thing to understand: a thin-margin metal converter whose earlier profits leaned on hedging gains. In FY24 and FY25 other income, mainly gains on commodity futures, was larger than EBITDA, at ₹500 million against ₹242 million in FY25 (AP p.9, DRHP p.486, DRHP p.489).

02The business, in plain words

A secondary lead smelter buys scrap, including used batteries, breaks it down, smelts and refines the lead, and casts it into alloys to battery makers' specifications. It earns the spread between scrap cost and the metal price; this company hedges metal prices with commodity futures (DRHP p.489).

An overseas battery maker orders a lead alloy → Eswari buys scrap from suppliers, smelts and refines it at its Tamil Nadu or Karnataka plants → it casts ingots to the specification and ships them → it is paid, for exports mostly in US dollars (DRHP p.40).

The company and its subsidiaries operate nine plants in Karnataka and Tamil Nadu, and a tenth, at Mundra, is expected to start in July 2026, subject to pollution-board consent (AP p.4, DRHP p.48). The company describes itself as India's largest exporter of lead alloy products by value, citing CRISIL (AP p.4).

Earnings equation: Profit ≈ tonnes × (metal price − scrap price − conversion cost) ± hedging result. Gross margin per tonne was ₹21,839 in FY25 and ₹33,727 in the nine months to December 2025 (AP p.10).

03Where the money comes from

Source: AP p.3, AP p.9.

The company also traded raw cashew nuts, 1.55% of FY25 revenue (AP p.10). It served 168 customers in the nine months to December 2025 (AP p.9).

04The growth record

Source: AP p.8, DRHP p.486.

Our arithmetic: revenue grew about 20.6% a year from FY23 to FY25 and profit after tax about 2.6% a year (our arithmetic, DRHP p.160). The company's own indicators put return on capital employed at 16.55% in FY23, 8.05% in FY24 and 3.66% in FY25, debtor days at 20.60, 24.69 and 33.57, and net debt at ₹3,116.40 million at March 2025, 12.9 times FY25 EBITDA (DRHP p.160, our arithmetic).

05What the growth is made of

Revenue grew, but EBITDA fell each year from FY23 to FY25, from 4.47% of revenue to 1.72% (AP p.9). Profit held up because other income rose, the document attributes the increases in FY24 and FY25 principally to gains from commodity hedging on futures (DRHP p.489, DRHP p.491). In the nine months to December 2025 EBITDA margin jumped to 8.37% and gross margin per tonne rose by more than half (AP p.9, AP p.10). The pages read do not explain the jump.

06Earnings quality

Operating cash flow was negative in FY24, FY25 and the nine months to December 2025 (AP p.8). Net working capital rose from 63 days in FY23 to 106 days in the nine months, with inventory at 71 days (AP p.9). The examination reports on the restated financials include emphasis of matter for the nine months to December 2025 and for FY24, and the previous auditors qualified the FY23 standalone accounts because employee benefits were not actuarially valued (DRHP p.50, DRHP p.51).

07The balance sheet

Source: AP p.8, AP p.9.

Net worth rose ₹1,641 million in nine months, ₹802 million more than profit (our arithmetic); the pages read do not explain the difference. At the end of December 2025 the company acquired all of Jayachandran Alloys, Moogambigai Materials Recycling (India) and Annai Metal Refineries (DRHP p.43).

08What the money is for

Source: AP p.1, AP p.6.

The amounts include up to ₹1,000 million from any pre-IPO placement (AP p.6).

09Who is selling

Source: AP p.1.

10Promoters

The six promoters are C Bharanikumar, whole-time director; Pradeep Chandrasekaran, who is also managing director and a promoter of Jayachandran Global Refineries; Prasath Chandrasekaran, managing director; Sabarinathan Anbalagan, whole-time director and chief executive; and Hari Sudhan A and Nithin Arumugam, non-executive directors (AP p.4, AP p.5, AP p.13). Most have been associated with the company since its incorporation on 22 May 2013 (AP p.4, AP p.5). The chairman, Narayan Shankar, is independent (AP p.13).

11Who already owns it

Source: AP p.7.

Promoters hold 85.00% and the promoter group a further 10.00% (AP p.7).

12What changed just before the IPO

• Acquisitions: three recycling companies bought at the end of December 2025 (DRHP p.43).
• Margins: EBITDA margin up from 1.72% to 8.37% (AP p.9).
• Capital: net worth more than doubled in nine months (AP p.8).
• Mundra: a new plant due to start in July 2026 (DRHP p.48).
• Share structure: the face value was sub-divided from ₹10 to ₹2 in October 2025, a one-for-one bonus issue followed on 27 December 2025, and a rights issue at ₹31.50 a share on 31 December 2025 was the last allotment before the offer (DRHP p.118).
• Auditor: Prasanna Shenoy & Co, appointed in September 2025, resigned on 9 February 2026 over a proposed increase in fees, and M S K C & Associates LLP was appointed on 28 February 2026 (DRHP p.107, DRHP p.108).
• Public company: converted from a private company in December 2025 (DRHP p.2).

13Capacity and expansion

Nine plants in Karnataka and Tamil Nadu, and the Mundra plant awaiting consent to operate (AP p.4, DRHP p.48). The proceeds fund phase 2 at Mundra (AP p.6). The document flags under-use of capacity as a risk and says its capacity figures rest on assumptions (DRHP p.47, DRHP p.54). It is considering lithium-ion battery recycling (DRHP p.43).

14Market size and industry structure

The CRISIL report cited in the offer document says India's lead demand grew from 1.1 million tonnes in FY21 to 1.5 million tonnes in FY25 and projects 1.8 to 1.9 million tonnes by FY30 (AP p.5). Those projections are CRISIL's, and newboard has not tested them. The document describes the recycling industry as competitive and fragmented (DRHP p.45).

15Competitive position

What the document claims, and what it rests on:

• The largest exporter of lead alloy products by value, citing CRISIL (AP p.4).
• Long customer relationships with global battery makers and traders (AP p.3).

Against that: thin conversion margins, dependence on hedging, and a few scrap suppliers (AP p.9, DRHP p.44, DRHP p.489).

16Peers the company named

Source: DRHP p.159. Peer P/E uses prices on 23 June 2026.

No P/E is possible for the company until a price band is set.

17Risks, in plain words

• One metal. Lead is 90% of revenue (DRHP p.26).
• Customer concentration. One customer is about a fifth of sales (AP p.3, DRHP p.28).
• Exports and currency. Three-quarters of sales abroad, mostly in dollars (DRHP p.30, DRHP p.40).
• Battery industry. Demand depends on battery makers (DRHP p.32).
• Scrap supply. Few suppliers, no long-term contracts (DRHP p.33, DRHP p.44).
• Environment and safety. Hazardous materials in a regulated industry (DRHP p.34, DRHP p.38).
• Working capital. 106 days and negative operating cash flow (AP p.9, DRHP p.42).

18Litigation and regulatory matters

Source: AP p.14.

The company reports past non-compliance with the Companies Act, delayed filings and untraceable records (DRHP p.46, DRHP p.51). It does not own its trademark (DRHP p.54).

19Related-party transactions

The company enters into related-party transactions in the ordinary course (DRHP p.49). One promoter is also a promoter of Jayachandran Global Refineries (AP p.5). The details were not read for this study.

20What the offer document does not say

In the sections read for this study, the document does not give:

• What drove the margin jump in the nine months to December 2025, in the pages read.
• What was paid for the three companies acquired in December 2025, in the pages read.
• How much hedging gain is in the nine-month other income.
• What the ₹362.83 million of tax claims against subsidiaries concern.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. Why did EBITDA per tonne rise from ₹3,150 in FY25 to ₹17,164 in the nine months to December 2025?
2. How much of profit in each year came from commodity hedging, and what is the hedging policy?
3. What was paid for Jayachandran Alloys, Moogambigai Materials Recycling and Annai Metal Refineries, and to whom?
4. What business does Jayachandran Global Refineries do with the company?
5. Who is the customer that takes about a fifth of sales?

2Sources and cited facts

This study was read from 2 documents the company filed. The 68 figures it cites are listed under the document each came from, with the page and the sentence as printed.