ANB Metal NSE SME IPO review

•    The company is engaged in manufacturing wide range of aluminium extrusion products for varied industries.
•    The company marked growth in its top and bottom lines for the reported periods.
•    Boosted profits from FY24 onwards raises eyebrows and concern over its sustainability.
•    It is operating in a highly competitive and fragmented segment.
•    Based on its recent financial data, the issue appears aggressively priced.
•    Only well-informed/cash surplus investors may park moderate funds for medium term.

ABOUT COMPANY:
ANB Metal Cast Ltd. (AMCL) is specializes in manufacturing a wide range of aluminium extrusion products, including motor bodies, various profiles, round bars, solar profiles, railings, and sliding windows. Its products cater to a diverse array of industries, such as electronics, automotive, mechanical, solar, and architectural sectors. AMCL’s objective is to consistently deliver value to customers by providing superior quality products and services at optimal costs, achieved through continuous improvement, integrity, and excellence in all aspects of operations. Its manufacturing unit is located in Rajkot, Gujarat, spanning about 50,000 sq. ft., and is dedicated to the production of aluminum extrusions and non-ferrous metal alloys. With its vast experience and high standards, the company meets major industry specifications and customer requirements.

The dies used in manufacturing these extrusions and profiles are custom-made and owned by the Company. It possesses a large variety of dies, continuously expanding collection based on customer designs and specifications to meet diverse industrial needs. Its primary raw material is aluminium-based metal scrap, which it sources from both domestic and international markets. The company specializes in manufacturing a wide range of aluminium extrusion products, including motor bodies, various profiles, round bars, solar profiles, railings, and sliding windows. 

Its products cater to a diverse array of industries, such as electronics, automotive, mechanical, solar, and architectural sectors. The aluminum extrusions, which it manufactures, are utilized in several applications, such as engineering products like solar panels, automotive parts, electronics (MCB, PCB, chips), architectural products like aluminum doors, kitchen profiles and window frames. As of July 15, 2025, it had 23 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 3200000 equity shares of Rs. 10 each to mobilize Rs. 49.92 cr. at the upper cap. It has announced a price band of Rs. 148 – Rs. 156 per share. The issue opens for subscription on August 08, 2025, and will close on August 12, 2025. The minimum number of shares to be applied is for 1600 shares and in multiples of 800 shares, thereafter. Post allotment, shares will be listed on NSE SME Emerge. The issue constitutes 27.04% of the post-IPO paid-up capital of the company. From the net proceeds of the IPO, it will utilize Rs. 13.70 cr. for capex on expansion of its existing facility, Rs. 21.50 cr. for working capital, and the rest for general corporate purposes. 

The IPO is solely lead managed by Sun Capital Advisory Services Pvt. Ltd., and KFin Technologies Ltd., is the registrar to the issue. Pure Broking Pvt. Ltd. is a market maker. The issue is underwritten to the tune of 15% by Sun Capital and 85% by Pure Broking. 

After issuing initial equity shares at par value, the company has issued further equity shares at Rs. 115 per share in September 2024. It has also issued bonus equity shares in the ratio of 3 for 2 in August 2024. The average cost of acquisition of shares by the promoters is Rs. 13.98 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 8.63 cr. will stand enhanced to Rs. 11.83 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 184.62 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit of Rs. 84.28 cr. / Rs. 1.85 cr. (FY23), Rs. 112.15 cr. / Rs. 5.34 cr. (FY24), Rs. 162.64 cr. / Rs. 10.25 cr. (FY25). Quantum jump in its bottom lines for FY25 raise eyebrows.

For the last three fiscals, the company has reported an average EPS of Rs. 9.38 and an average RoNW of 55.43%. The issue is priced at a P/BV of 3.72 based on its NAV of Rs. 41.97 as of March 31, 2025, but its post-IPO NAV data is missing from offer documents.

If we attribute FY25 super earnings on post-IPO fully diluted equity capital, then the asking price is at a P/E of 18.01. Based on FY24 earnings, the P/E stands at 34.59. Thus, the issue appears aggressively priced.

For the reported periods, the company has posted PAT margins of 2.19% (FY23), 4.76% (FY24), 6.30%, (FY25), and RoCE margins of 13.86%, 22.47%, 24.13%, respectively for the referred periods. 

DIVIDEND POLICY:
The company has not paid any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy, based on its financial performance and future prospects.

COMPARISION WITH LISTED PEERS:
As per the offer document, the company has shown Maan Aluminum, Banco Products, as their listed peers. They are trading at a P/E of 41.1, and 21.6 (as of August 07, 2025). However, they are not truly comparable on an apple-to-apple basis.

MERCHANT BANKER’S TRACK RECORD:
This is the 4th mandate from Sun Capital in the last four fiscals including the ongoing one.  Out of the last 3 listings, 1 opened at discount, and the rest with premium ranging from 5.00% to 12.18% on the date of listing.