Exim Routes NSE SME IPO review (Not Rated)

•    The company is engaged as a global platform dedicated to facilitating exchange of recyclable paper product materials.
•    It operates on B2B model with its specialized ERIS platform.
•    It posted growth in its top and bottom lines from FY23 to FY25, but Q1-FY26 indicates declined trends.
•    Based on its recent financial data, the issue appears aggressively priced.
•    Only well-informed/cash surplus/risk seekers may park moderate funds for medium term, others can skip this pricey and dicey issue.

ABOUT COMPANY:
Exim Routes Ltd. (ERL) operates as a global platform dedicated to facilitating the exchange of recyclable paper product materials, providing end-to-end services to Indian Paper Mills (“Mills”), ranging from sourcing/procurement of waste paper to quality assurance and logistics wastepaper to mills. To enable these operations, the Company has developed the Exim Routes Intelligence System (ERIS), an AIpowered B2B digital platform, designed to perform four primary functions: Firstly, in Supply Chain Operations and Offer Management, the ERIS platform consolidates global inventory data from all Exim Route Limited suppliers, demand offers from mills, matching and price discovery, and connects supply and demand by acting as an intermediary, enabling bidding and closing of trades. Secondly, in Customer and Partner Enablement, ERIS supports outbound communication between Exim internal teams, suppliers and customers and facilitates better tracking and wider, faster outreach. Thirdly, in Market Intelligence and Data Layer, ERIS brings together multiple internal and external data points (e.g., pricing and grade quality parameters) to enable insights and better decision making for internal teams and customers. Lastly, in Logistics Integration, ERIS supports logistics execution integrating its global network of logistics partners and freight forwarders – ensuring seamless from order to delivery.

In effect, the ERIS platform facilitates connections between recycling yards, Material Recovery Facilities (MRFs), traders, and end-user industries, with a particular focus on paper mills, within a secure and structured marketplace. In addition to supporting Exim’s internal operations, the platform is licensed to a select group of suppliers and mills.

The Exim Routes Intelligence System (ERIS) is an AI-powered B2B digital platform developed to centralize and streamline recyclable paper trade operations. ERIS is positioned at the core of Exim’s business, serving as the enabling infrastructure for inventory visibility, transaction execution, and data driven decision-making across its network of suppliers, paper mills, and internal teams. Through a closed loop digital marketplace managed by Exim, the platform facilitates structured trades between buyers and suppliers, allowing Exim to coordinate deal-making while ensuring control over quality, pricing, and compliance.

Sourcing and international logistics of the waste paper are undertaken by its subsidiaries including Exim Routes Inc., incorporated in the United States of America; Exim Routes Pte. Ltd., incorporated in Singapore; Exim Routes (UK) Ltd., incorporated in the United Kingdom; Good Earth SCM GmbH, incorporated in Germany and Exim Routes (SA) Pty Ltd., incorporated in South Africa. The Company is responsible for providing overall strategic direction, group-level governance, and driving technology initiatives. It also oversees the coordination of operations, logistics, and trade execution, in collaboration with subsidiaries. These operations are primarily conducted through, ERIS, a direct model, wherein its foreign subsidiary procures and supplies recyclable paper directly to Indian customers. As of November 30, 2025, it had 18 employees on its payroll. 

ISSUE DETAILS/ CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 4969600 equity shares of Rs. 5 each to mobilize Rs. 43.73 cr. at the upper cap. The company has announced a price band of Rs. 83 – Rs. 88 per share. The minimum application to be made is for 3200 shares and in multiples of 1600 shares thereon, thereafter. The issue opens for subscription on December 12, 2025, and will close on December 16, 2025. The IPO constitute 26.50% of the post-IPO paid-up capital of the company. The shares will be listed on NSE SME Emerge. From the net proceeds of the IPO, it will utilize Rs. 14.50 cr. for expenses on development and maintenance of ERIS platform, Rs. 9.00 cr. for working capital, Rs. 7.13 cr. for investment in office space for accommodating new hires, and the rest for general corporate purposes. 

The IPO is solely lead managed by Narnolia Financial Services Ltd., and Maashitla Securities Pvt. Ltd. is the registrar to the issue. Nikunj Stock Brokers Ltd. is the market maker. Nexgen Financial Solutions Pvt. Ltd. is a syndicate member. The issue is underwritten to the tune of 15.01% by Narnolia financial and 84.99% by Nexgen Financial.

The company has issued initial equity capital at par value, and issued further equity shares at a fixed price of Rs. 640 per share in July 2024. It has also issued bonus shares in the ratio of 9 for 1 and 5 for 1in July 2024. The average cost of acquisition of shares by the promoters is Rs. 2.84 per share.

Post-IPO, company’s current paid-up equity capital of Rs. 6.89 cr.  will stand enhanced to Rs. 9.38 cr. Based on the upper band of the IPO pricing, the company is looking for a market cap of Rs. 165.02 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has (on a consolidated basis) posted total income / net profit, of Rs. 36.46 cr. / Rs. 0.38 cr. (FY23), Rs. 72.39 cr. / Rs. 4.20 cr. (FY24), Rs. 120.99 cr. / Rs. 7.56 cr. (FY25). For Q1 of FY26 ended on June 30, 2025, it earned a net profit of Rs. 1.17 cr. on a total income of Rs. 44.17 cr. It’s cost of services and employees benefit expenses has marked erratic movements. According to company, this is due to clubbing these expenses as capital spending for IT development.

For the last three fiscals, the company has reported an average EPS of Rs. 1.59, and an average RoNW of 56.47%. The issue is priced at a P/BV of 7.40 based on its NAV of Rs. 11.89 per share as of June 30, 2025, and at a P/BV of 2.74 based on its post-IPO NAV of Rs. 32.06 per share (at the upper cap).

If we attribute FY26 annualized super earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at a P/E of 35.20, and based on FY25 earnings, the P/E stands at 21.64. The issue appears aggressively priced with declined earnings for Q1-FY26.

For the reported periods, the company has posted RoCE margins of 14.50 % (FY23), 51.19% (FY24), 35.53% (FY25), 5.71% (Q1-FY26), and reported PAT margins of 1.03%, 5.85%, 6.27%, 2.68%, respectively, for the referred periods.

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

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has no listed peers to compare with.

MERCHANT BANKER’S TRACL RECORD:
This is the 27th mandate from Narnolia Financial in the last three fiscals. Out of the last 10 listings, 1 listed at discount, and the rest with premium ranging from 17.39% to 90.00% on the date of listing.