CMR Green Technologies IPO Sees Strong Demand on Day 2

CMR Green Technologies IPO Overview

CMR Green Technologies IPO Day 2: The IPO of CMR Green Technologies has garnered significant interest from investors, showcasing robust demand on its opening day and a promising grey market premium (GMP) that reflects positive sentiment ahead of its market entry. The public offering, valued at Rs 630.6 crore, commenced on June 3 and will conclude on June 5. This IPO is structured as an offer-for-sale (OFS), meaning that existing shareholders are selling part of their holdings, and the company will not gain any new capital from this issuance. Shares are available within a price range of Rs 182 to Rs 192 each, with a minimum bid requirement of 78 shares.

Positive Market Sentiment Reflected in GMP

As of June 4, the IPO was trading at a grey market premium of approximately 31 percent. Based on the upper price limit of Rs 192 per share, this GMP indicates a potential listing price around Rs 252, according to Investorgain's data. While GMP trends can provide insights into investor sentiment prior to listing, they are unofficial and may not accurately predict the stock's actual performance on the exchange. Factors such as market conditions, institutional involvement, and overall investor mood can significantly impact the outcomes on listing day.

Subscription Performance

The IPO experienced a strong debut, achieving an overall subscription rate of 2.46 times on its first day. Non-institutional investors (NIIs) showed particularly high demand, subscribing to their allocated portion 5.67 times. Retail investors also demonstrated considerable interest, with their category subscribed 2.45 times. Conversely, Qualified Institutional Buyers (QIBs) were more reserved, subscribing to only 3 percent of the shares set aside for them on the opening day.

About CMR Green Technologies

CMR Green Technologies is recognized as the largest non-ferrous metal recycler in India by installed capacity. An ICRA report cited in the company's prospectus indicates that it held the largest share of the domestic secondary aluminium market in FY25. The company operates 13 manufacturing plants across India, producing a variety of recycled metal products, including aluminium alloys, aluminium billets, and zinc alloy ingots. It is a key supplier to the automotive industry, holding an estimated 42-45 percent share of the cast alloy market.

Brokerage Perspectives

In FY25, CMR Green Technologies reported operating revenue of Rs 6,666 crore, reflecting a 12 percent increase from the previous year. The company achieved a profit after tax of Rs 155 crore, a recovery from the loss experienced in FY24, which was primarily due to a one-time goodwill impairment charge. Prior to the IPO, the company raised Rs 188 crore from anchor investors, including domestic mutual funds, insurance companies, and foreign institutional investors. Brokerage views on the IPO are mixed. Motilal Oswal emphasized the company's strong position in the aluminium recycling sector, its dominant market presence, and alignment with long-term sustainability trends. In contrast, Swastika Investmart has given a "Neutral" rating to the offering, acknowledging the company's leadership and reasonable valuation but expressing concerns regarding the OFS structure, customer concentration risks, reliance on a limited client base, and relatively low margins. They noted that high-risk investors might consider the IPO mainly for potential listing gains.