HRS Aluglaze BSE SME IPO review (Not Rated)

•    The company is engaged in the business of design, manufacturing, and installation of wide range of aluminium products on a tailor-made basis.
•    As of September 30, 2025, it had orders on hand worth Rs. 103 cr. approx.
•    The company is operating in a highly competitive and fragmented segment.
•    Based on its recent financial data, the issue appears aggressively priced. 
•    Only well-informed/risk seekers/cash surplus investors may park moderate funds for medium term, others may ignore it.

ABOUT COMPANY:
HRS Aluglaze Ltd. (HAL) is engaged in the business of design, manufacturing, and installation of a wide range of aluminium products, including windows, doors, curtain walls, cladding, and glazing systems. These solutions are carefully tailored to meet the specific requirements of builders, contractors, architect, and institutions, with both standard and customized options and requirements and the Company also provides material supply and procurement support. Over the years, it has evolved capability of providing good quality architectural systems, delivering reliable and customized solutions for commercial, residential, industrial, and institutional projects including hospitals.

HAL’s manufacturing facility is located in Village Rajoda, Taluka Bavla, Ahmedabad, Gujarat, and currently spans approximately 11,176 square meters of area. To support its long-term growth strategy and cater to the rising demand for our products and services. With in-house infrastructure, CNC precision machinery, and powder coating facilities, we maintain good quality standards across all operations. The company has proposed an expansion of approximately 13,714 square meters adjoining to current facility area.

The Company has successfully completed several projects across commercial complexes, residential towers, industrial facilities, and government infrastructure. As on September 30, 2025, it had a pipeline of 28 active projects, which together are expected to contribute approximately Rs. 103.07 crores in revenue. As of September 30, 2025, it had 90 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 5304000 equity shares to mobilize Rs. 50.92 cr. at the upper cap. It has announced a price band of Rs. 94 – Rs. 96 per share of Rs. 10 each.  The IPO opens for subscription on December 11, 2025, and will close on December 15, 2025. The minimum application to be made is for 2400 shares and in multiple of 1200 shares thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 27.51% of post-IPO paid-up equity capital of the company. From the net proceeds of the issue, the company will utilize Rs. 18.30 cr. for capex on setting up assembly and glass glazing line at Rajoda, Rs. 19.00 cr. working capital, and the rest for general corporate purpose.

The IPO is solely lead managed by Cumulative Capital Pvt. Ltd., while Purva Sharegistry India Pvt. Ltd. is the registrar to the issue. MNM Stock Broking Pvt. Ltd., is the market maker as well as a syndicate member. The IPO is underwritten to the tune of 50% each by Cumulative Capital and MNM Stock Broking.

The company has issued/converted entire initial equity shares at par value. It has issued further equity shares at a fixed price of Rs. 320 per share in March 2025, and also issued bonus shares in the ratio of 11 for 10 in May 2025. The average cost of acquisition of shares by the promoters is Rs. 4.76, and Rs. 152.38 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 13.98 cr. will stand enhanced to Rs. 19.28 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 185.11 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total revenue/net profit, of Rs. 22.69 cr. / Rs. 0.87 cr. (FY23), Rs. 26.97 cr. / Rs. 1.79 cr. (FY24), Rs.  42.14 cr. Rs. 5.15 cr. (FY25). For H1- FY26 ended on September 30, 2025, it earned a net profit of Rs. 4.54 cr. on a total revenue of Rs. 26.35 cr. The boosted profits from FY25 onwards (i.e., pre-IPO period) raises eyebrows and concern over its sustainability as it is operating in a highly competitive and fragmented segment. Its debt: equity ratio of 1.67 as of September 30, 2025, raise concern.

For the last three fiscals, the company has reported an average EPS of Rs. 2.62, and an average RoNW of 26.84%. The issue is priced at a P/BV of 5.45 based on its NAV of Rs. 17.61 as of September 30, 2025, but its post-IPO NAV data is missing from the offer documents.

If we attribute its FY26 super annualized earnings on post-IPO expanded equity base, then the asking price is at a P/E of 20.38, and based on its FY25 earnings, the P/E stands at 35.96. Thus, the issue appears aggressively priced.

The company has posted PAT margins of 3.85% (FY23), 6.69% (FY24), 12.22% (FY25), 17.23% (H1-FY26), and RoCE Margins of 6.88%, 10.58%, 15.97%, 11.52%, respectively for the referred periods. 

DIVIDEND POLICY:
The company paid a dividend of 8% for H1-FY26. It will adopt a prudent dividend policy, based on its financial performances and future prospects. Dividend payment just ahead of IPO appears to be an eyewash.

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown Innovators Façade, Aluwind Infra-Tech, as its listed peers. They are currently trading at a P/E of 28.6, and 16.3 (as of December 08, 2025, 2025). However, they are not truly comparable on an apple-to-apple basis.

MERCHANT BANKER’S TRACK RECORDS:
This is the 5th mandate from Cumulative Capital in the last two fiscals. Out of the last three listings, all opened at a premium ranging from 25% to 37.5% on the date of listing.