Ardee Industries IPO

Ardee Industries Limited IPO Strengths

Leading Player in the Circular Economy

Ardee Industries Limited has established itself as one of India’s leading players in the circular economy. The company specializes in the environmentally responsible recovery and recycling of end-of-life energy storage products and non-ferrous scrap, reclaiming critical resources from waste streams and contributing to domestic resource security while minimizing the environmental footprint of industrial growth.

Strategic Location and Manufacturing Capabilities

Ardee Industries Limited benefits from a strategically located manufacturing facility in Tirupati, Andhra Pradesh. This location provides proximity to major ports like Chennai, Kattupalli, and Ennore for efficient import-export operations and is near large battery manufacturers, enabling short turnaround times, logistical cost savings, and access to regular orders from key customers.

Robust Risk Management through Hedging

Ardee Industries Limited employs a disciplined, board-approved hedging strategy to mitigate commodity price risks. The company utilizes a back-to-back pricing model for imports/exports and enters into futures contracts on the London Metal Exchange (LME), effectively insulating its margins from the volatility of lead prices and ensuring financial stability.

Strong and Diversified Customer Base

Ardee Industries Limited has cultivated a strong customer base of over 50 clients, including reputable names like Amara Raja Energy & Mobility. The company demonstrates high customer retention, with repeat customers contributing over 83% of revenue in FY25, and has rapidly expanded its international presence to seven countries, reflecting the trust in its product quality and reliability.

Proven Financial Performance and Growth

Ardee Industries Limited exhibits a compelling track record of robust financial growth. It is one of the fastest-growing companies in its peer group, with revenue CAGR of 34.30% and PAT CAGR of 97.07% from FY23 to FY25. This consistent performance is supported by improving profitability metrics and a strengthened balance sheet.

More About Ardee Industries Limited

Business Model and Operations

Ardee Industries Limited is a key contributor to India’s circular economy, specializing in the sustainable recycling of end-of-life energy storage products and non-ferrous scrap. The company transforms this waste into high-value products, primarily pure lead and lead alloys, at its advanced manufacturing facility in Tirupati, Andhra Pradesh.

• Product Portfolio:

• Pure Lead: With purity levels ranging from 99.97% to 99.985%, conforming to international standards.

• Lead Alloys: Including lead calcium, lead antimony, lead tin, lead silver, and lead cadmium, each catering to distinct industrial applications requiring properties like corrosion resistance and durability.

Manufacturing and Sustainability

The company’s 7.61-acre facility has an installed capacity of 104,025 MTPA, which was significantly expanded from 54,750 MTPA in FY23. The plant is equipped with advanced machinery like rotary furnaces and refining kettles and is accredited with ISO 9001:2015 (Quality), ISO 14001:2015 (Environmental), and ISO 45001:2018 (Health & Safety) certifications. Ardee integrates sustainability into its core operations by using oxygen enrichment to reduce furnace oil consumption and utilizing green fuel derived from end-of-life tyres, thereby optimizing costs and reducing its environmental impact.

Market Reach and Key Clients

Ardee Industries Limited has a formidable market presence both domestically and internationally.

• Domestic: Products are sold in ten states across India.

• International: The company exports to seven countries, including Singapore, Hong Kong, South Korea, and Switzerland. Export revenue has grown at a staggering CAGR of 521.22% from FY23 to FY25.

• Key Customers: Its clientele includes leading industry players such as Amara Raja Energy & Mobility Limited and Sebang Metal Trading Co. Ltd.

Industry Outlook

The outlook for the Indian lead recycling industry is highly positive, driven by the push towards a circular economy and growing demand from end-use sectors.

Market Growth and Drivers

The Indian lead recycling market is poised for significant growth, primarily fueled by the automotive battery replacement market and the expansion of the telecommunication and UPS sectors. Government initiatives like the Battery Waste Management Rules, 2022, promote formal recycling and create a favorable regulatory environment. The emphasis on “Make in India” and reducing dependency on primary metal imports further bolsters the domestic secondary lead industry.

Key Figures and Projections

• The Recycled Lead Ingots market in Southeast Asia and South Korea was valued at $1.92 Billion in CY 2024 and is projected to reach $2.75 Billion by CY 2030, growing at a CAGR of 6.2%.

• Indian manufacturers on the eastern coast, including Ardee Industries, are strategically positioned to cater to this demand.

• For by-products, India recycled 10.5 million tonnes of plastic waste in FY25, projected to grow to 19 million tonnes by 2030 (CAGR of 12.6%).

• Demand for tin metal in India is projected to grow at a CAGR of 4% from 14.33 KT in FY25 to 17.44 KT in 2030.

• Copper demand in India was 1,764 KT in FY25 and is projected to reach 2,592 KT by 2030, growing at a CAGR of 8%, driven by renewable energy and EV targets.

How Will Ardee Industries Limited Benefit

• Benefit from the strong government push towards a formal circular economy and stringent battery recycling rules, ensuring a steady supply of raw materials.

• Capitalize on the growing demand for recycled lead from the automotive, telecommunications, and renewable energy sectors, both in India and internationally.

• Leverage its strategic location near ports to efficiently serve the high-growth recycled lead markets in Southeast Asia and South Korea.

• Utilize its proven recycling capabilities and expanded capacity to capture a larger market share in the rapidly growing domestic lead recycling industry.

• Diversify into high-growth derivative segments like plastic granules, tin, and copper recycling, tapping into new and expanding revenue streams.

• Enhance its global competitiveness and pricing power through the potential listing of its ‘Ardee Lead 9997’ brand on the London Metal Exchange (LME).

Peer Group Comparison

Name of the Company	Face Value (₹)	Market Price (₹)	EPS (Basic) (₹)	P/E Ratio	RoNW (%)	RoCE (%)
Ardee Industries Limited	2.00	[●]	1.31	[●]	53.15	25.17
Peer Group
Gravita India Limited	2.00	1,662.05	45.11	36.84	15.12	15.17
Pondy Oxides and Chemicals Limited	5.00	1,325.85	22.03	62.90	9.79	13.27

Key Strategies for Ardee Industries Limited

Portfolio Diversification and Capacity Expansion

Ardee Industries Limited plans to expand its sustainably driven product portfolio by diversifying into plastic granules and refining tin and copper waste. This will be supported by acquiring additional land and utilizing the expanded installed capacity of its manufacturing facility. The strategy aims to maximize value from by-products, minimize waste, and capitalize on the high growth projected in the plastic, tin, and copper recycling markets, thereby strengthening its circular economy model.

Geographical Expansion to Broaden Customer Base

Ardee Industries Limited intends to aggressively expand its geographical footprint by deepening its presence in existing international markets like Hong Kong, Switzerland, and Japan. The strategy involves offering its existing high-quality products to both new and existing customers in these regions. This expansion is aimed at diversifying revenue sources, broadening the customer base, and capturing a larger share of the growing global demand for recycled lead and lead alloys.

Global Brand Enhancement via LME Listing

A key strategic initiative for Ardee Industries Limited is securing a listing for its ‘Ardee Lead 9997’ brand on the London Metal Exchange (LME). This move is designed to establish global credibility, provide transparent international price benchmarking, and enable risk management for international customers. The LME listing is expected to significantly enhance the company’s export capabilities and reinforce its position as a high-quality, compliant producer in the global lead recycling ecosystem.

Debt Profile Optimization and Financial Strengthening

Ardee Industries Limited plans to improve its debt profile by utilizing a portion of the IPO proceeds for the repayment of certain borrowings. This strategic move is expected to reduce outstanding indebtedness, lower debt servicing costs, and improve key financial metrics like Return on Capital Employed (ROCE). An improved leverage ratio will enhance financial flexibility, allowing the company to fund future growth opportunities and invest internal accruals back into the business.