Ardee Industries shares slip 7% post-listing after double-digit listing gains. What should investors do?

Ardee Industries shares fell over 6% from their BSE listing price on Wednesday after a strong D-Street debut earlier in the day. The stock listed at Rs 73.60 on the BSE, a premium of nearly 39% over its issue price of Rs 53, while debuting at Rs 72 on the NSE.

The initial listing gains, however, proved short-lived as profit-booking dragged the stock down by 6.93% from its BSE opening price to trade around Rs 68.50.

Despite the post-listing drop, the stock continues to hold strong gains of over 29% relative to its original issue price.

The company’s Rs 425.87 crore IPO was subscribed 133.66 times overall, driven by overwhelming demand across institutional, non-institutional, and retail investor categories. The public offer comprised a fresh issue of Rs 320 crore and an offer for sale worth Rs 105.87 crore by promoters Sandeep Aggarwal and Nikunj Aggarwal.

What should investors do?

Shivani Nyati, Head of Wealth at Swastika Investmart Ltd, said that while the post-listing outlook remains positive supported by attractive valuations, a strong Return on Net Worth (RoNW) of 57.46%, and healthy profitability, investors should avoid chasing the stock at higher levels and watch for profit-booking.
“IPO allottees can continue to hold with a stop-loss of Rs 65 on a closing basis, while fresh investors may consider buying only on meaningful dips,” she added.”Long term investors may probably continue to monitor earnings growth and operational performance as consistent execution will be important to support the company’s premium valuation,” he said, emphasizing that investors should track how efficiently the company scales up capacity, maintains raw material supply stability, and deploys its fresh IPO funds.

How will Ardee Industries use IPO proceeds?

The proceeds from the fresh issue will be directed towards strengthening the company’s balance sheet and funding its future operational requirements.

The company intends to deploy Rs 220 crore towards fulfilling its growing working capital requirements, while Rs 20 crore will go towards the repayment or pre-payment of select borrowings. The remaining funds will be utilised for general corporate purposes, taking the overall utilisation of fresh IPO proceeds to Rs 240 crore.

Founded in 1993, Ardee Industries Limited operates in the sustainable recovery and recycling of end-of-life energy storage products and non-ferrous scrap. The company specialises in manufacturing high-purity lead and specialised lead alloys for the energy storage, automotive, e-mobility, and chemical industries. Operating a manufacturing facility in Tirupati district, Andhra Pradesh, with an installed capacity of 104,025 metric tonnes per annum (MTPA), it caters to over 50 customers globally across domestic and export markets.

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