Hexagon Nutrition Limited IPO Analysis, 117-Checkpoint Due Diligence & Valuation Dossier

Issue Size ₹600.00 Cr

Price Band ₹45

Lot Size / Min Inv. 300 shares

Estimated Market Cap ₹2,400.00 Cr

Anchor Allocation ₹180.00 Cr (30.0% of Issue)

Offering Dates 05 Jun 2026 - 09 Jun 2026

FAST-ORIENTATION TRIAGE

At a Glance: Fast-Orientation Triage

Mainboard or SME issue?

OK

Mainboard issue under SEBI ICDR regulations; BSE and NSE dual listing.

Mainboard issue with institutional book building (50% QIB, 15% NII, 35% Retail).

Can you explain what the company does in one plain sentence?

OK

Clinical nutrition formulations (PentaSure, Obesigo) and micronutrient food fortification premixes across 70+ countries.

High-margin therapeutic clinical nutrition and public health fortification supply.

Total issue size and post-issue market cap?

OK

Total Issue Size ₹600.00 Cr at ₹45 per share, resulting in post-issue market cap of ₹2,400.00 Cr.

Issue size consists of ₹150.00 Cr Fresh Capital and ₹450.00 Cr OFS.

Fresh issue vs OFS - what's the split?

OK

Fresh Issue: ₹150.00 Cr (25.0%) | OFS: ₹450.00 Cr (75.0%).

Fresh capital funds Nashik plant automation and full debt eradication.

Who is selling in the OFS - promoter, PE, or both?

OK

Somerset Indus Healthcare Fund I (PE selling ₹324 Cr) and Promoters Arun & Subhash Kelkar (selling ₹126 Cr).

PE fund partial monetization after 8-year holding; promoters retain majority control.

Is the company profitable, or loss-making?

OK

Profitable with expanding margins: FY23 PAT ₹28.10 Cr, FY24 ₹37.50 Cr, FY25 ₹48.60 Cr (14.2% PAT margin).

Consistent double-digit bottom-line expansion with FY25 ROCE of 26.40%.

Any headline red flag in the first 10 risk factors?

FLAG

No headline existential red flags; monitor raw material vitamin/mineral API price volatility and export trade tariffs.

Export receivables and international logistics represent key operational monitorables.

Auditor qualification or 'emphasis of matter'?

OK

Unmodified Clean Audit Report by MSKA & Associates (BDO Member Firm).

No qualifications, adverse remarks, or forensic concerns in restated audit reports.

Any criminal case / SEBI-RBI action against promoters?

FLAG

No criminal proceedings, economic offences, or SEBI/RBI debarment against promoters or directors.

Minor ₹3.20 Cr disputed customs duty appeal before CESTAT with low materiality.

IPO P/E vs the peers listed in 'Basis for Offer Price'?

OK

Valued at ~32.4x FY25 P/E vs pure-play MNC healthcare peers (Abbott 52.4x, Nestle Healthcare 74.2x, Zydus 42.0x).

Significant valuation discount to branded clinical healthcare and pharma formulations peers.

Is the use of fresh-issue money clearly growth-oriented?

OK

₹72.5 Cr automated manufacturing capex in Nashik, ₹35.0 Cr debt repayment, ₹15.0 Cr working capital.

100% Growth-oriented capital allocation directly expanding production capacity and margins.

Is this within your circle of competence to judge?

OK

Yes. High analytical clarity on clinical nutrition brand moat, gross margins, and global humanitarian premix demand.

Strong circle of competence in healthcare formulations and B2B specialty nutrition.

LAYER 1 • STORY & POSITIONING

What The Company Does: Operational & Strategic Architecture

The company manufactures pure-play clinical nutrition formulations (PentaSure, Obesigo) and micronutrient fortification premixes for therapeutic care and public health programs.

#	Checkpoint	Your Finding (Prospectus Data)	Status	Page Ref
1	What does the company do, in one plain sentence?	Clinical nutrition formulations (PentaSure) and micronutrient food fortification premixes for public health.	OK	p. 112
Where in DRHP: Cover, 'Our Business', Industry Overview Why It Matters: If you can't say it simply, neither can the company - and that's telling. Benchmark / Red Flag Trigger: Unexplainable model = step back Exact Citation: p. 112
2	Operating history & year of incorporation	Established proprietary brand portfolio (PentaSure Renal, DM, Hepatic, CritiQ) with high institutional prescriber stickiness.	OK	p. 115
Where in DRHP: 'History and Corporate Matters' Why It Matters: A long, consistent track record beats a recently assembled roll-up. Benchmark / Red Flag Trigger: <3 yrs real operating history = caution Exact Citation: p. 115
3	Industry / sub-sector & position in the value chain	Global clinical nutrition market expanding at 7.8% CAGR; Indian therapeutic clinical care growing at 14.5% CAGR.	OK	p. 94
Where in DRHP: 'Industry Overview' Why It Matters: Defines the correct peer set and the normal margin/return profile. Benchmark / Red Flag Trigger: - Exact Citation: p. 94
4	Stated competitive strengths - real or generic?	Top 3 pure-play Indian clinical nutrition formulation manufacturers with customized hospital disease-specific product lines.	OK	p. 118
Where in DRHP: 'Our Strengths' Why It Matters: 'Experienced promoters, quality focus' is boilerplate; specifics are real moats. Benchmark / Red Flag Trigger: Only generic strengths = weak moat Exact Citation: p. 118
5	Stated growth strategy - concrete or aspirational?	High institutional switching barriers due to hospital clinical validation and patient palatability compliance.	OK	p. 120
Where in DRHP: 'Our Strategies' Why It Matters: Fundable, specific plans beat vague ambition. Benchmark / Red Flag Trigger: Vague strategy = discount the story Exact Citation: p. 120
6	Industry tailwinds vs headwinds	30-year operational track record founded by Arun Kelkar and Subhash Kelkar in 1993.	OK	p. 124
Where in DRHP: 'Industry Overview', MD&A Why It Matters: Structural growth vs a flat/declining or cyclical-peak market. Benchmark / Red Flag Trigger: Declining/flat industry = headwind Exact Citation: p. 124
7	Who commissioned the industry report?	Dual engine model: High-margin domestic branded clinical care (58%) paired with global institutional premix exports (42%).	OK	p. 128
Where in DRHP: 'Industry Overview' footnotes Why It Matters: Company-paid reports (e.g. CRISIL/F&S) skew optimistic - discount accordingly. Benchmark / Red Flag Trigger: Always company-commissioned Exact Citation: p. 128
8	Is the TAM / market-size claim credible?	FSSAI, US FDA registered facilities, ISO 22000, WHO-GMP compliant manufacturing sites in Nashik and Chennai.	OK	p. 132
Where in DRHP: 'Industry Overview' Why It Matters: Sanity-check the addressable market against the company's actual revenue. Benchmark / Red Flag Trigger: Implausibly large TAM = puffery Exact Citation: p. 132
9	Market share and its trend	Export reach spanning 70+ countries across South East Asia, Middle East, Africa, and Latin America.	OK	p. 136
Where in DRHP: Industry / Business Why It Matters: Share gains signal real competitiveness; losses signal pressure. Benchmark / Red Flag Trigger: Losing share = flag Exact Citation: p. 136
10	Key competitors named	In-house DSIR-recognized R&D facility with dedicated clinical nutritionists and food scientists.	OK	p. 140
Where in DRHP: 'Competition', Basis for Offer Price Why It Matters: Tells you the genuine peer set for the valuation comparison later. Benchmark / Red Flag Trigger: - Exact Citation: p. 140

LAYER 2 • ISSUE STRUCTURE & OBJECTS

The IPO Itself: Capital Allocation & Objects Rupee Breakdown

The IPO consists of a Fresh Issue of ₹150 Cr for debt reduction and automated manufacturing in Nashik, alongside an OFS of ₹450 Cr by Somerset Indus PE and promoters.

Offering Structure & Tranche Breakup

Offering Parameter / Tranche	Mandate & Allocation	Value & Scale	Strategic Context & Terms
Fresh Issue (Primary Capital)	Growth capital directly reaching balance sheet	₹600.00 Cr	Primary equity expansion funding capex, working capital & debt
Offer for Sale (OFS Liquidations)	Secondary liquidity for existing promoters & early funds	OFS Dilution Tranche	Proceeds go entirely to selling shareholders; zero reaches company
Gross Total Issue Size	Aggregate offering scale at upper price band	₹600.00 Cr	Total book-building size
Anchor Investor Allocation	Reserved institutional QIB tranche	₹180.00 Cr (30.0% of Issue)	Anchor lock-in: 50% for 30 days, 50% for 90 days post-listing
Pre-IPO WACA Benchmark	Weighted average cost of acquisition for promoters	Disclosed in Basis for Issue Price	Benchmark for pricing fairness and insider multiple markup

Capital Allocation & Objects of the Issue

Object of Offer / Purpose	Allocated Amount	% Share	Execution Timeline
Automated Nashik Premix Plant Expansion Capex	₹72.50 Cr	48.3%	Automation, spray drying, cleanrooms
Debt Repayment & Borrowing Clearance	₹35.00 Cr	23.3%	Zero debt post-IPO
Incremental Export Receivables Working Capital	₹15.00 Cr	10.0%	Working capital for 70+ country exports
General Corporate Purposes (GCP)	₹27.50 Cr	18.4%	Marketing & general expenses
Total Fresh Growth Capital	₹150.00 Cr	100.0%	Balance Sheet Inflow

#	Checkpoint	Your Finding (Prospectus Data)	Status	Page Ref
11	Mainboard or SME issue?	Total Issue Size ₹600.00 Cr at ₹45 per share; ₹150.00 Cr Fresh Issue (25.0%) and ₹450.00 Cr OFS (75.0%).	OK	p. 58
Where in DRHP: Cover page Why It Matters: SME = thinner disclosure, lower liquidity, higher risk. Benchmark / Red Flag Trigger: SME = extra caution Exact Citation: p. 58
12	Total issue size (Rs cr)	Somerset Indus PE monetizing 7.2M shares (₹324 Cr); Promoters selling 2.4M shares (₹126 Cr).	Watch	p. 62
Where in DRHP: Cover page / 'The Offer' Why It Matters: Basic sizing of the raise. Benchmark / Red Flag Trigger: - Exact Citation: p. 62
13	Fresh issue amount (Rs cr)	₹72.50 Cr for automated premix manufacturing line in Nashik; ₹35.00 Cr for complete term loan prepayment.	OK	p. 66
Where in DRHP: 'The Offer' Why It Matters: Only the fresh issue brings new money into the company. Benchmark / Red Flag Trigger: - Exact Citation: p. 66
14	OFS amount (Rs cr)	₹15.00 Cr allocated for export working capital and ₹16.00 Cr for General Corporate Purposes (10.7% of Fresh).	OK	p. 70
Where in DRHP: 'The Offer' Why It Matters: OFS proceeds go to selling shareholders, not the business. Benchmark / Red Flag Trigger: - Exact Citation: p. 70
15	Fresh : OFS ratio	Fresh Issue : OFS = ~48% : 52% (Fresh ₹320 cr vs OFS ~₹344 cr). Balanced mix.	OK	Objects of the Offer, p.114
Where in DRHP: 'The Offer' Why It Matters: A heavy OFS tilt means the IPO is mostly an exit. Benchmark / Red Flag Trigger: OFS >70% + tiny fresh = flag Exact Citation: Objects of the Offer, p.114
16	Who is selling in the OFS?	Promoter Selling Shareholders: Sandeep Aggarwal (up to 9,987,500 shares) and Nikunj Aggarwal (up to 9,987,500 shares). No PE selling.	Watch	Details of Offer for Sale, p.1, 75
Where in DRHP: 'The Offer' / Selling Shareholders Why It Matters: Promoter exit and PE exit carry very different signals. Benchmark / Red Flag Trigger: Large promoter sell-down = flag Exact Citation: Details of Offer for Sale, p.1, 75
17	How much does the COMPANY actually receive?	Net Proceeds = ₹320.00 cr minus company's portion of offer expenses.	OK	Objects of the Offer, p.114
Where in DRHP: Fresh issue minus issue expenses Why It Matters: This is the real fuel for growth - often far less than the headline. Benchmark / Red Flag Trigger: - Exact Citation: Objects of the Offer, p.114
18	Objects: capex - amount & specificity	₹0.00 cr allocated to fresh plant capex from IPO proceeds. Plant expansion funded via past internal accruals/borrowings.	Watch	Objects of the Offer, p.115
Where in DRHP: 'Objects of the Offer' Why It Matters: Specific, costed capex is genuine growth spending. Benchmark / Red Flag Trigger: Vague/uncosted capex = flag Exact Citation: Objects of the Offer, p.115
19	Objects: debt repayment amount	₹20.00 cr (₹200.00 million) for prepayment/scheduled repayment of existing borrowings.	OK	Objects of the Offer, p.115, 121
Where in DRHP: 'Objects of the Offer' Why It Matters: Deleveraging is healthy but it is balance-sheet repair, not growth. Benchmark / Red Flag Trigger: High % to debt = repair, not growth Exact Citation: Objects of the Offer, p.115, 121
20	Objects: working capital amount	₹220.00 cr (₹2,200.00 million) for funding incremental working capital in Fiscal 2027 (68.75% of gross proceeds).	OK	Objects of the Offer, p.115, 118
Where in DRHP: 'Objects of the Offer' Why It Matters: Normal for a growing WC-intensive business; large amounts can signal a stretched cycle. Benchmark / Red Flag Trigger: - Exact Citation: Objects of the Offer, p.115, 118
21	Objects: acquisition - named target or 'future M&A'?	No fresh issue proceeds earmarked for acquisitions. Company notes potential group plant consolidation separately.	N/A	Objects of the Offer, p.115; Our Business, p.221
Where in DRHP: 'Objects of the Offer' Why It Matters: A named, costed target beats a blank cheque for 'inorganic growth'. Benchmark / Red Flag Trigger: Unspecified M&A = flag Exact Citation: Objects of the Offer, p.115; Our Business, p.221
22	General Corporate Purposes (GCP) as % of fresh issue	Balance Net Proceeds (capped at max 25% of Gross Proceeds per SEBI ICDR rules, i.e. max ₹80.00 cr).	OK	Objects of the Offer, p.115
Where in DRHP: 'Objects of the Offer' Why It Matters: SEBI caps GCP (and unidentified objects). High GCP = undefined use of your money. Benchmark / Red Flag Trigger: Maxed-out / high GCP = flag Exact Citation: Objects of the Offer, p.115
23	Issue expenses as % of the issue	To be finalized upon pricing; standard institutional underwriting/legal/RTA expenses.	OK	Objects of the Offer, p.123
Where in DRHP: 'Objects of the Offer' Why It Matters: Fees eat into the proceeds that reach the company. Benchmark / Red Flag Trigger: Unusually high = flag Exact Citation: Objects of the Offer, p.123
24	Overall read: growth / debt-repair / exit / mixed?	Mixed: Primary proceeds (₹320 cr) are growth-oriented (working capital for exports & FOB terms) and mild debt repair (₹20 cr), while OFS (~₹344 cr) enables partial promoter monetization.	OK	Objects of the Offer, p.115
Where in DRHP: Synthesise the objects Why It Matters: The single most important interpretation of the whole issue. Benchmark / Red Flag Trigger: Pure exit or repair = low enthusiasm Exact Citation: Objects of the Offer, p.115
25	Pre-IPO placement done - at what price vs the IPO band?	No Pre-IPO placement reported in the DRHP.	N/A	Capital Structure, p.94-113
Where in DRHP: 'Capital Structure' Why It Matters: A recent placement far below the IPO price signals aggressive pricing. Benchmark / Red Flag Trigger: Big gap below IPO price = flag Exact Citation: Capital Structure, p.94-113
26	WACA - weighted avg cost of acquisition of promoter/investor shares vs IPO price	WACA per equity share for Promoters Sandeep Aggarwal and Nikunj Aggarwal is ₹Nil (due to bonus issuances and nominal original cost). Esha Gupta WACA is ₹1.12.	Watch	Details of OFS, p.1; Capital Structure, p.112
Where in DRHP: 'Basis for Offer Price' Why It Matters: SEBI-mandated. Shows the markup at which insiders are selling to you. Benchmark / Red Flag Trigger: IPO price >> WACA = priced for insiders Exact Citation: Details of OFS, p.1; Capital Structure, p.112

LAYER 3 • BUSINESS QUALITY

Business Quality: Concentration, Retention & Durability

Business durability is anchored by customer stickiness, recurring volume growth, and disciplined operational execution.

Revenue Breakdown & Product Segment Mix

Product / Operating Segment	% Share	Revenue Value
Clinical Nutrition Formulations (PentaSure, Obesigo)	55.0%	₹188.10 Cr
Food Fortification Premixes (Humanitarian Programs)	35.0%	₹119.70 Cr
Therapeutic Micronutrient Supplements	10.0%	₹34.20 Cr

Customer & Geographic Concentration Matrix

Counterparty / Customer Tier	Revenue Share (%)	Rupee Amount	Strategic Exposure Note
Clinical Nutrition Formulations (PentaSure, Obesigo)	55.0%	₹188.10 Cr	High-margin therapeutic formulations
Food Fortification Premixes (Humanitarian Programs)	35.0%	₹119.70 Cr	Humanitarian fortification programs
Therapeutic Micronutrient Supplements	10.0%	₹34.20 Cr	B2C specialized supplements
Geographic Revenue Mix	Domestic: 58.0% \| Exports: 42.0%	₹198 Cr / ₹144 Cr	Institutional exports to 70+ countries
Top 1 Customer (UN WFP / Global Alliances)	11.4%	₹39.00 Cr	UN agency humanitarian supply contracts
Top 5 Customers	34.2%	₹117.00 Cr	Diversified institutional accounts

#

Checkpoint

Your Finding (Prospectus Data)

Status

Page Ref

27

Revenue breakdown by segment / product

FY26 product revenue: Pure Lead ₹6,971.02 mn (59.70%), Lead Alloys ₹4,705.51 mn (40.30%). By end-use: Metal industry 50.02%, Battery industry 34.77%, Scrap sales 2.69%, Export sales 39.83%.

OK

Risk Factors #2, p.30; Our Business, p.211

28

Top customer as % of revenue

Top Customer (Amara Raja Energy & Mobility Ltd) contributed 40.64% of FY26 revenue (₹4,745.56 mn), 51.22% in FY25, and 72.42% in FY24. Exceeds 25-30% red-flag threshold.

Multi-Period Trend Breakdown

FY26	FY25	FY24
revenue (₹4,745	, and 72	. Exceeds 25-30% red-flag threshold

Flag

Risk Factors #1, p.29; Our Business, p.230

29

Top 5 customers as % of revenue

Top 5 Customers contributed 81.98% of FY26 revenue (₹9,571.90 mn), 82.46% in FY25, and 90.54% in FY24. Severe customer concentration.

Multi-Period Trend Breakdown

FY26	FY25	FY24
revenue (₹9,571	, and 90	. Severe customer concentration

Flag

Risk Factors #1, p.29; Our Business, p.230

30

Are customer relationships recurring/contracted or order-by-order?

Relationships are recurring based on vendor qualification and ongoing master supply purchase orders, but without long-term take-or-pay binding contracts.

Watch

Our Business, p.229-231

31

Recurring / repeat revenue %

83.68% to 92.80% of revenue from operations was derived from repeat customers across Fiscals 2024 - 2026.

OK

Risk Factors #9, p.36; Our Business, p.220

32

Supplier concentration (top / top-5)

Top 5 suppliers account for 26.68% of raw material purchases in FY26 (₹2,473.60 mn), Top 10 account for 38.48% (₹3,567.49 mn). Moderately concentrated.

Watch

Risk Factors #3, p.31; Our Business, p.232

33

Single-source or single raw-material dependency?

High dependency on lead scrap / battery scrap. Imports account for 86.94% of raw material purchases in FY26 (up from 61.34% in FY24), subject to MoEFCC import licences.

Flag

Risk Factors #3, p.31; Objects, p.116

34

Manufacturing footprint - single-plant dependency?

Single manufacturing facility located at Village Sultanpur, Mehrauli, Gadaipur, New Delhi. Single-plant operational risk.

Watch

Our Business, p.221, 228

35

Current capacity utilisation

FY26 actual production 69,855 MT against installed capacity of 104,025 MTPA = 67.15% capacity utilization (FY25: 45.16%, FY24: 59.48%). Installed capacity expanded to 156,950 MTPA as of DRHP.

OK

Our Business, p.228

36

Geographic concentration of revenue

Domestic sales: 60.17% (₹7,025.99 mn in FY26); Export sales: 39.83% (₹4,650.54 mn in FY26 across 8 countries including Singapore, S. Korea, UAE, US, Switzerland, HK, Japan).

OK

Objects, p.116; Our Business, p.221

37

Asset-heavy or asset-light?

Moderately asset-heavy secondary metallurgy plant: Net Fixed Assets ₹70.58 cr (PPE) supporting revenue of ₹1,167.65 cr. Fixed asset turnover ratio high at 11.15x.

OK

Basis for Offer Price, p.134; Financials, p.79

38

Working-capital intensity

High working capital intensity. Net Working Capital ₹226.19 cr as at March 31, 2026 (19.37% of revenue). Advances to suppliers (₹84.58 cr) + Inventories (₹116.12 cr) absorb substantial cash.

Watch

Objects of the Offer, p.118, 119

39

Distribution model (direct / dealer / online)

Direct B2B sales model to industrial battery manufacturers (e.g. Amara Raja) and overseas metal traders/recyclers.

OK

Our Business, p.229-231

40

Order book / backlog (if relevant)

Business operates on recurring short-term purchase orders and release schedules rather than long-term fixed order book backlog.

OK

Our Business, p.229

41

Cyclicality of the business

Cyclical exposure to global lead prices (LME benchmark) and automotive replacement battery cycles.

Watch

Industry Overview, p.146; MD&A, p.344

42

Entry barriers / moat - real or weak?

Moderate entry barriers: MoEFCC environmental permits for hazardous lead scrap import/recycling, strict customer vendor onboarding audits, oxygen-enriched smelting tech.

OK

Our Strengths, p.216; Objects, p.116

43

Key licences / regulatory approvals the business depends on

MoEFCC (Ministry of Environment, Forest & Climate Change) import permits for battery scrap, CPCB consent to operate, Delhi Pollution Control Committee (DPCC) clearances.

Watch

Government Approvals, p.384; Objects, p.116

44

Technology / obsolescence risk

Substitutability of lead-acid batteries by Lithium-ion/sodium-ion in EVs poses long-term technology risk, though lead-acid retains cost advantage in 12V SLI automotive & stationary storage.

Watch

Industry Overview, p.171; Risk Factors #2, p.30

LAYER 4 • FINANCIAL QUALITY

Are The Numbers Real? Multi-Year Forensic Quality Audit

Audited restated financials demonstrate steady top-line growth (17.3% 3-Yr CAGR) with zero long-term debt post-IPO and FY25 ROCE of 26.4%.

Revenue from Operations

+17.3%

₹342.00 Cr

₹248.50 Cr

FY23

₹292.10 Cr

FY24

₹342.00 Cr

FY25

EBITDA & Operating Profit

+26.1%

₹76.60 Cr (22.4%)

₹48.20 Cr (19.4%)

FY23

₹61.30 Cr (21.0%)

FY24

₹76.60 Cr (22.4%)

FY25

Profit After Tax (PAT)

+31.5%

₹48.60 Cr (14.2%)

₹28.10 Cr (11.3%)

FY23

₹37.50 Cr (12.8%)

FY24

₹48.60 Cr (14.2%)

FY25

Cash Flow from Operations (CFO)

+41.6%

₹49.10 Cr

₹24.50 Cr

FY23

₹36.20 Cr

FY24

₹49.10 Cr

FY25

3-Year Audited Financial Performance Summary

Financial Parameter / Metric	FY23	FY24	FY25	3-Yr CAGR
Revenue from Operations	₹248.50 Cr	₹292.10 Cr	₹342.00 Cr	+17.3%
EBITDA (Operating Profit)	₹48.20 Cr (19.4%)	₹61.30 Cr (21.0%)	₹76.60 Cr (22.4%)	+26.1%
Profit After Tax (PAT)	₹28.10 Cr (11.3%)	₹37.50 Cr (12.8%)	₹48.60 Cr (14.2%)	+31.5%
Operating Cash Flow (CFO)	₹24.50 Cr	₹36.20 Cr	₹49.10 Cr	+41.6%
ROCE (Return on Capital)	21.40%	24.20%	26.40%	26.4% ROCE
Debt-to-Equity (D/E)	0.45x	0.32x	0.08x	Near Zero

#

Checkpoint

Your Finding (Prospectus Data)

Status

Page Ref

45

Revenue (3 yrs) and CAGR

Revenue: FY24 ₹462.96 cr → FY25 ₹742.74 cr → FY26 ₹1,167.65 cr. 3-year CAGR = 58.81%.

Multi-Period Trend Breakdown

FY24	FY25	FY26
₹462	₹742	₹1,167

OK

Basis for Offer Price, p.132; Financials, p.80

46

Is growth organic or acquisition-driven?

Revenue from operations: FY23 ₹248.50 Cr, FY24 ₹292.10 Cr, FY25 ₹342.00 Cr (3-Yr CAGR: 17.3%).

Multi-Period Trend Breakdown

FY23	FY24	FY25
₹248	₹292	₹342

OK

p. 182

47

Gross margin trend (3 yrs)

EBITDA: FY23 ₹48.20 Cr (19.4%), FY24 ₹61.30 Cr (21.0%), FY25 ₹76.60 Cr (22.4%). Operating margin expanding steadily.

Multi-Period Trend Breakdown

FY23	FY24	FY25
₹48	₹61	₹76

OK

p. 185

48

EBITDA and EBITDA-margin trend

PAT: FY23 ₹28.10 Cr (11.3%), FY24 ₹37.50 Cr (12.8%), FY25 ₹48.60 Cr (14.2%). Net margin up 290 bps over 3 years.

Multi-Period Trend Breakdown

FY23	FY24	FY25
₹28	₹37	₹48

OK

p. 188

49

Sudden margin spike right before the IPO?

Operating Cash Flow: FY23 ₹24.50 Cr, FY24 ₹36.20 Cr, FY25 ₹49.10 Cr. Excellent CFO/PAT conversion of 101.0% in FY25.

Multi-Period Trend Breakdown

FY23	FY24	FY25	FY25
₹24	₹36	₹49	.

OK

p. 192

50

PAT and PAT-margin trend

ROCE stands at 26.40% and ROE at 21.80% in FY25, reflecting superior capital efficiency in specialty pharma nutrition.

OK

p. 195

51

Other income as % of PAT

Debt-to-Equity reduced from 0.45x in FY23 to 0.08x in FY25; company becomes completely net debt-free post-IPO.

OK

p. 198

52

CFO (operating cash flow) trend

CFO: FY24 -₹25.26 cr (Negative!) → FY25 ₹7.84 cr → FY26 ₹29.83 cr. Poor cash generation relative to recorded profits.

Multi-Period Trend Breakdown

FY24	FY25	FY26
₹25	₹7	₹29

Flag

Restated Cash Flow Statement, p.81

53

CFO / PAT (cash conversion), multi-year

CFO/PAT: FY24 -2.82x → FY25 0.24x → FY26 0.35x. 3-year cumulative CFO (₹12.41 cr) / cumulative PAT (₹126.91 cr) = 0.10x (10% conversion!). Well below 0.6-0.7x red-flag benchmark.

Multi-Period Trend Breakdown

FY24	FY25	FY26
2	0	0

Flag

Financials, p.80, 81

54

Was CFO negative in any year?

Yes, CFO was negative in FY24 (-₹25.26 cr) due to working capital accumulation.

Flag

Restated Cash Flow Statement, p.81

55

Free cash flow (CFO minus capex)

FCF (CFO - Capex): FY24 -₹45.80 cr → FY25 -₹17.46 cr → FY26 +₹17.38 cr. Cumulative 3-year FCF = -₹45.88 cr.

Multi-Period Trend Breakdown

FY24	FY25	FY26
₹45	₹17	+₹17

Flag

Restated Cash Flow Statement, p.81

56

Total debt and net debt

As of March 31, 2026: Total Borrowings ₹182.75 cr (Long-term ₹14.91 cr + Short-term ₹167.84 cr); Cash & Bank ₹23.47 cr; Net Debt = ₹159.27 cr.

Watch

Financials, p.79

57

Debt / Equity

Debt/Equity ratio: FY24 4.87x → FY25 2.65x → FY26 1.24x (or 1.25x in Risk Factors). High leverage, though improving as net worth expands.

Multi-Period Trend Breakdown

FY24	FY25	FY26
4	2	1

Watch

Risk Factors #5, p.33; Financials, p.79

58

Interest coverage (EBIT / interest)

Interest coverage (EBIT / Finance Cost): FY24 2.14x → FY25 4.33x → FY26 5.71x. Healthy interest coverage in FY26.

Multi-Period Trend Breakdown

FY24	FY25	FY26	FY26
2	4	5	.

OK

Financials, p.80

59

ROE and trend

Return on Net Worth (RONW): FY24 30.61% → FY25 53.15% → FY26 57.46%. High reported ROE.

Multi-Period Trend Breakdown

FY24	FY25	FY26
30	53	57

OK

Basis for Offer Price, p.129, 130

60

ROCE and trend

Return on Capital Employed (ROCE): FY24 12.83% → FY25 25.17% → FY26 44.26%. Strong ROCE trajectory.

Multi-Period Trend Breakdown

FY24	FY25	FY26
12	25	44

OK

Basis for Offer Price, p.130

61

ROCE vs cost of capital

FY26 ROCE of 44.26% comfortably exceeds estimated cost of capital (~11-12%).

OK

Basis for Offer Price, p.130

62

Debtor (receivable) days and trend

Trade Receivables: FY24 ₹39.69 cr (31 debtor days) → FY25 ₹59.95 cr (29 debtor days) → FY26 ₹24.79 cr (8 debtor days). Receivable collection improved significantly in FY26.

Multi-Period Trend Breakdown

FY24	FY25	FY26	FY26
₹39	₹59	₹24	.

OK

Financials, p.79, 80

63

Inventory days and trend

Inventories: FY24 ₹41.86 cr (42 inventory days based on COGS) → FY25 ₹44.95 cr (28 days) → FY26 ₹116.12 cr (47 days). Inventory jumped in FY26 ahead of export expansion.

Multi-Period Trend Breakdown

FY24	FY25	FY26	FY26
₹41	₹44	₹116	ahead of export expansion

Watch

Financials, p.79, 80; Objects, p.119

64

Payable days and trend

Trade Payables: FY24 ₹9.43 cr (9 payable days) → FY25 ₹22.74 cr (14 days) → FY26 ₹13.80 cr (5 days). Very low payable days.

Multi-Period Trend Breakdown

FY24	FY25	FY26
₹9	₹22	₹13

OK

Financials, p.79, 80

65

Cash conversion cycle

Cash Conversion Cycle (Debtor days + Inventory days - Payable days): FY24 64 days → FY25 43 days → FY26 50 days (plus supplier advances holding period ~34-53 days under FOB).

Watch

Financials, p.79; Objects, p.120

66

Contingent liabilities vs net worth

Contingent Liabilities as of March 31, 2026: ₹12.76 cr (Bank Guarantees ₹12.50 cr + Disputed Income Tax ₹0.26 cr), representing 8.66% of Net Worth (₹147.38 cr). Manageable level.

OK

Summary of Contingent Liabilities, p.82

67

Capex history vs proposed capex

Historical Capex: FY24 ₹20.54 cr, FY25 ₹25.30 cr, FY26 ₹12.44 cr (total ₹58.28 cr). No IPO funds allocated to direct capex.

Multi-Period Trend Breakdown

FY24	FY25	FY26
₹20	₹25	₹12

OK

Restated Cash Flow Statement, p.81; Objects, p.115

68

Dividend history

No dividends declared or paid in Fiscals 2024, 2025, or 2026. Profits entirely retained for business growth.

OK

Dividend Policy, p.278

69

Standalone vs consolidated divergence

Company presents restated standalone financial statements only; no operational subsidiaries.

N/A

Restated Financial Information, p.279

70

Material restatement adjustments?

Restated under Ind AS with retrospective adjustments for FY24 (transition from Indian GAAP to Ind AS per Note 45).

OK

Auditor's Report, p.283

71

Auditor qualifications / emphasis of matter

No qualifications or emphasis of matter in Nangia & Co. LLP examination report dated July 09, 2026.

OK

Auditor's Report, p.283

72

Aggressive revenue-recognition policy?

Revenue recognized upon transfer of control of products (delivery/dispatch as per CIF/FOB terms). Standard Ind AS 115 policy.

OK

Significant Accounting Policies, p.286

LAYERS 5 & 6 • GOVERNANCE & RPT

Governance Architecture & Related Party Transactions

Promoters hold 68.4% equity pre-IPO with MSKA & Associates serving as statutory auditors with unmodified audit reports.

Pre & Post-Issue Shareholding Structure

Shareholder Category / Promoter	Pre-IPO %	Post-IPO %	Pledge Status	Statutory Lock-in
-	-	-	Nil	Standard
-	-	-	Nil	Standard
-	-	-	Nil	Standard

#	Checkpoint	Your Finding (Prospectus Data)	Status	Page Ref
73	Promoter background and track record	Promoters Sandeep Aggarwal (CMD) and Nikunj Aggarwal (WTD) have ~3 decades experience in metal & battery recycling. However, Sandeep Aggarwal faces 2 criminal cases (GST & IPC).	Watch	Our Promoters, p.257, 273; Litigation, p.379
Where in DRHP: 'Our Promoters', 'Management' Why It Matters: The quality and integrity of stewardship. Benchmark / Red Flag Trigger: Prior failure/fraud = flag Exact Citation: Our Promoters, p.257, 273; Litigation, p.379
74	Promoter holding pre-IPO	Pre-IPO promoter shareholding of 68.40% reducing to ~53.80% post-IPO; zero promoter share pledging.	OK	p. 74
Where in DRHP: 'Capital Structure' Why It Matters: Skin in the game today. Benchmark / Red Flag Trigger: - Exact Citation: p. 74
75	Promoter holding post-IPO	Board comprises 6 directors including 3 independent directors (50% independence) with qualified female representation.	OK	p. 152
Where in DRHP: 'Capital Structure' Why It Matters: Alignment going forward. Benchmark / Red Flag Trigger: Very low post-IPO = misalignment Exact Citation: p. 152
76	Promoter share pledge	Zero promoter share pledge as of the DRHP date.	OK	Capital Structure, p.105
Where in DRHP: 'Capital Structure', Risk Factors Why It Matters: Pledging signals financial stress. Benchmark / Red Flag Trigger: Any meaningful pledge = flag Exact Citation: Capital Structure, p.105
77	Promoter / KMP remuneration vs PAT and peers	FY26 Promoter Remuneration: Sandeep Aggarwal ₹2.01 cr, Nikunj Aggarwal ₹2.00 cr, Esha Gupta ₹0.16 cr (Total ₹4.17 cr = 4.92% of FY26 PAT). Reasonable proportion.	OK	Summary of RPTs, p.83; Management, p.258
Where in DRHP: 'Management' Why It Matters: Cash extraction relative to profits. Benchmark / Red Flag Trigger: High pay vs PAT = flag Exact Citation: Summary of RPTs, p.83; Management, p.258
78	Group structure - complex / circular / many entities?	Group companies include Pilot Industries Limited, D.P Auto Industries Pvt Ltd, Kanhahi Buildcon Pvt Ltd. Multiple RPT transactions (loans, goods sale/purchase) exist.	Watch	Our Group Companies, p.389; RPTs, p.83
Where in DRHP: 'Our Group Companies' Why It Matters: Complexity is where value and leakage hide. Benchmark / Red Flag Trigger: Complex web = flag Exact Citation: Our Group Companies, p.389; RPTs, p.83
79	Auditor - reputable? Recent change or resignation?	Current auditor Nangia & Co. LLP (reputable peer-reviewed firm). However, erstwhile auditor Mohan Gupta & Co resigned on March 24, 2025 right before IPO process.	Watch	General Information - Changes in Auditors, p.90
Where in DRHP: 'Auditors', history Why It Matters: Audit credibility and any pre-IPO churn. Benchmark / Red Flag Trigger: Resignation before IPO = flag Exact Citation: General Information - Changes in Auditors, p.90
80	CFO / KMP churn before the IPO	Significant recent KMP appointments & exits: CFO Arun Mallik appointed June 30, 2025; CS Puneet Verma resigned Dec 2025; CS Manish Rai appointed Dec 2025; GM-SCM Roshan Kumar resigned March 2026.	Flag	Our Management, p.272
Where in DRHP: 'Management', history Why It Matters: Instability in key finance roles before listing. Benchmark / Red Flag Trigger: CFO exit pre-IPO = flag Exact Citation: Our Management, p.272
81	Board: proportion of independent directors	6 Board members: 3 Executive (Sandeep, Nikunj, Esha) and 3 Independent Directors (Archana Jain, Anand Tandon, Vivek Sarbhai). 50% independent board, 2 women directors.	OK	Our Management, p.254
Where in DRHP: 'Management' Why It Matters: Strength of independent oversight. Benchmark / Red Flag Trigger: Below norms = flag Exact Citation: Our Management, p.254
82	Independent-director credentials - real or token?	Credentials appear genuine: Anand Tandon (ex-Mecklai/Standard Chartered), Vivek Sarbhai (ex-Mondelez/Thermo Fisher), Archana Jain. However, all 3 were appointed very recently (June/July 2025).	Watch	Our Management, p.256-258
Where in DRHP: Director bios Why It Matters: Whether oversight is actually effective. Benchmark / Red Flag Trigger: Token / related IDs = flag Exact Citation: Our Management, p.256-258
83	ESOP / outstanding options - dilution overhang	Company has no employee stock option scheme (ESOP) or convertible instruments outstanding.	OK	Capital Structure, p.113; Management, p.272
Where in DRHP: 'Capital Structure' Why It Matters: Future dilution of your stake. Benchmark / Red Flag Trigger: Large unvested pool = caution Exact Citation: Capital Structure, p.113; Management, p.272
84	Lock-in: promoter and anchor / pre-IPO investors	20% post-issue promoter shareholding locked in for 18 months; balance promoter shares locked in for 6 months. Anchor investor 50% locked in for 30 days, 50% for 90 days.	OK	Capital Structure, p.105-107
Where in DRHP: 'Capital Structure' Why It Matters: Share supply that hits the market post-listing. Benchmark / Red Flag Trigger: Big near-term unlocks = caution Exact Citation: Capital Structure, p.105-107
85	Past corporate-governance issues / regulatory strictures	DGGI GST evasion criminal complaint (₹9.81 cr alleged fake ITC) against promoter Sandeep Aggarwal and group co Pilot Industries.	Flag	Outstanding Litigation, p.380
Where in DRHP: Risk Factors, Litigation Why It Matters: A pattern of past behaviour. Benchmark / Red Flag Trigger: Any history = flag Exact Citation: Outstanding Litigation, p.380

#

Checkpoint

Your Finding (Prospectus Data)

Status

Page Ref

86

Sales to related parties (% of revenue)

Sale of goods to Pilot Industries Limited: FY26 ₹20.27 cr (1.74% of revenue), FY25 ₹8.13 cr (1.09%), FY24 ₹7.86 cr (1.70%). Moderate level.

Multi-Period Trend Breakdown

FY26	FY25	FY24
₹20	₹8	₹7

OK

Summary of RPTs, p.83

87

Purchases from related parties (% of costs)

Related party transactions limited to arm's length warehouse lease rental of ₹1.20 Cr per annum with promoter family.

OK

p. 204

88

Loans / advances to promoter or related entities

Unsecured loans received/repaid with promoters & group entities (Pilot Industries ₹29.50 cr in FY25; D.P Auto Industries ₹5.71 cr in FY26; Kanhahi Buildcon ₹6.00 cr in FY26; advances to Pilot Industries ₹21.88 cr in FY26).

Watch

Summary of RPTs, p.83, 84

89

Rent / royalty / brand fees paid to related parties

Minor rent paid to promoters/group entities (₹0.04-0.09 cr in FY24/25, ₹Nil in FY26); software usage reimbursement with Pilot Industries.

OK

Summary of RPTs, p.83, 84

90

Outstanding RPT balances (receivable / payable)

Advance paid to Pilot Industries for goods purchase ₹21.88 cr in FY26 (received back during the year). Trade balances with group entities generally small at year-end.

OK

Summary of RPTs, p.84

91

RPT trend over 3 years

RPT goods sales increased from ₹7.86 cr to ₹20.27 cr, but as % of revenue remained low (~1.7%). Inter-corporate unsecured loans reduced significantly in FY26.

OK

Summary of RPTs, p.83, 84

92

Disclosed at arm's length? Pricing basis?

Company discloses that all RPTs are entered into in the ordinary course of business and on an arm's length basis.

OK

Summary of RPTs, p.83; Financial Note 38, p.332

93

Overall RPT concern level (Low / Medium / High)

Medium concern: RPT revenue % is low, but inter-company loans and shared expenses/advances with Pilot Industries reflect ongoing group reliance.

Watch

Summary of RPTs, p.83, 84

LAYER 7 • LITIGATION & REGULATORY

Litigation, Tax Disputes & Materiality Sizing

Outstanding legal proceedings represent standard commercial and tax disputes with low aggregate materiality relative to net worth.

Outstanding Legal & Tax Dispute Summary

Litigation / Regulatory Category	Case Count	Quantifiable Exposure	Materiality & Balance Sheet Risk
Disputed Customs Duty Matters	1	₹3.20 Cr	Evaluated
Auditor IFCoFR Opinion	1	₹0.00 Cr	Evaluated

#	Checkpoint	Your Finding (Prospectus Data)	Status	Page Ref
94	Criminal cases against promoters / directors	2 Criminal cases against Promoter Sandeep Aggarwal: (1) DGGI GST case 3371/2023 alleging ₹9.81 cr GST evasion (stayed by Uttarakhand HC); (2) IPC complaint 1485/2022 alleging battery cheating/misuse of cheques (stayed by Patna HC).	Flag	Outstanding Litigation, p.379, 380
Where in DRHP: 'Outstanding Litigation' Why It Matters: An integrity red flag that can override the numbers. Benchmark / Red Flag Trigger: Any = serious flag Exact Citation: Outstanding Litigation, p.379, 380
95	Material civil / commercial cases - company	Total quantifiable litigation ₹3.20 Cr (disputed CESTAT customs duty appeal); zero criminal or regulatory proceedings.	OK	p. 222
Where in DRHP: 'Outstanding Litigation' Why It Matters: Direct business and financial risk. Benchmark / Red Flag Trigger: - Exact Citation: p. 222
96	Direct + indirect tax disputes and amounts	1 Direct Tax case (₹0.26 cr disputed income tax for AY 2024-25); 1 Indirect Tax case (₹0.09 cr). Total tax disputes ₹0.35 cr.	OK	Outstanding Litigation, p.382; Summary of Contingent Liabilities, p.82
Where in DRHP: 'Outstanding Litigation' Why It Matters: Contingent cash outflows. Benchmark / Red Flag Trigger: Large vs PAT = flag Exact Citation: Outstanding Litigation, p.382; Summary of Contingent Liabilities, p.82
97	Regulatory / statutory actions (SEBI, RBI, environmental, labour)	DGGI (GST Intelligence) prosecution initiated against Sandeep Aggarwal/Pilot Industries under CGST Act Sec 132.	Flag	Outstanding Litigation, p.380
Where in DRHP: 'Outstanding Litigation' Why It Matters: Signals compliance culture. Benchmark / Red Flag Trigger: Active actions = flag Exact Citation: Outstanding Litigation, p.380
98	Total quantifiable amount involved	Quantifiable litigation: GST DGGI matter ₹9.81 cr + Tax disputes ₹0.35 cr + IPC private complaint ₹0.50 cr = ~₹10.66 cr total.	Watch	Outstanding Litigation, p.379-382
Where in DRHP: Litigation summary Why It Matters: Sizing the aggregate exposure. Benchmark / Red Flag Trigger: - Exact Citation: Outstanding Litigation, p.379-382
99	Materiality vs PAT and net worth	Quantified litigation (~₹10.66 cr) represents 12.59% of FY26 PAT (₹84.68 cr) and 7.23% of Net Worth (₹147.38 cr). Moderate materiality.	Watch	Outstanding Litigation, p.382; Financials, p.79, 80
Where in DRHP: Compare Why It Matters: Whether the exposure is survivable. Benchmark / Red Flag Trigger: Multiple of PAT / net worth = flag Exact Citation: Outstanding Litigation, p.382; Financials, p.79, 80
100	Any case threatening a key licence or the business model?	DGGI GST case carries potential criminal prosecution risk under CGST Act Section 132, though stayed by High Court. MoEFCC import permits require clean regulatory standing.	Watch	Outstanding Litigation, p.380
Where in DRHP: Litigation, Risk Factors Why It Matters: Existential risk to operations. Benchmark / Red Flag Trigger: Yes = serious flag Exact Citation: Outstanding Litigation, p.380

LAYER 8 • VALUATION & PEER BENCHMARK

Valuation: Peer Comparison & Multiples Benchmark

Valuation benchmark indicates competitive pricing relative to listed industry peers and forward earnings power.

Listed Industry Peer Valuation Benchmark

Company Name / Peer Benchmark	P/E (x)	EV/EBITDA	P/S (x)	ROE (%)	ROCE (%)	YoY Growth	PAT Margin
Hexagon Nutrition Limited	32.4x	16.2x	-	-	26.4%	-	-
Abbott India Limited	52.4x	36.8x	-	-	36.5%	-	-
Nestle India Limited (Healthcare Nutrition)	74.2x	48.5x	-	-	88.0%	-	-
Zydus Wellness Limited	42.0x	24.5x	-	-	9.5%	-	-
Healthcare Nutrition Composite	56.2x	36.6x	-	-	44.7%	-	-

#	Checkpoint	Your Finding (Prospectus Data)	Status	Page Ref
101	IPO P/E (post-issue, upper band)	Price band not disclosed in DRHP. At peer average P/E of 33.63x and FY26 Diluted EPS ₹3.32, implied fair valuation is ~₹110-115 per share.	Watch	Basis for Offer Price, p.129, 130
Where in DRHP: Basis for Offer Price / compute Why It Matters: The headline earnings multiple you're paying. Benchmark / Red Flag Trigger: - Exact Citation: Basis for Offer Price, p.129, 130
102	Peer P/E - and is the peer set fair or cherry-picked?	P/E of 32.4x FY25 EPS at ₹45 per share vs Abbott India (52.4x), Nestle India Healthcare (74.2x), Zydus Wellness (42.0x).	OK	p. 98
Where in DRHP: 'Basis for Offer Price' Why It Matters: Companies pick flattering peers; rebuild the set yourself. Benchmark / Red Flag Trigger: Cherry-picked rich peers = flag Exact Citation: p. 98
103	EV / EBITDA vs peers	Ardee FY26 EBITDA is ₹147.08 cr. At peer EV/EBITDA of ~18-22x, implied Enterprise Value is ~₹2,600-3,200 cr.	Watch	Basis for Offer Price, p.130, 133
Where in DRHP: Compute / peers Why It Matters: A capital-structure-neutral comparison. Benchmark / Red Flag Trigger: - Exact Citation: Basis for Offer Price, p.130, 133
104	Price / Sales (especially if loss-making)	Company is profitable. FY26 Revenue is ₹1,167.65 cr. Implied P/S multiple at peer valuation would be ~0.8-1.0x.	OK	Basis for Offer Price, p.130; Financials, p.80
Where in DRHP: Compute Why It Matters: The relevant lens for unprofitable companies. Benchmark / Red Flag Trigger: Aggressive P/S on losses = flag Exact Citation: Basis for Offer Price, p.130; Financials, p.80
105	Price / Book	Pre-issue NAV per share is ₹5.78 (Net Worth ₹147.38 cr). At implied IPO price of ~₹110, P/B ratio would be ~19x (elevated due to low initial capital base).	Watch	Basis for Offer Price, p.130
Where in DRHP: Compute Why It Matters: Relevant for asset-heavy and financial businesses. Benchmark / Red Flag Trigger: - Exact Citation: Basis for Offer Price, p.130
106	Implied market cap at IPO	At peer average P/E (33.63x) and FY26 PAT (₹84.68 cr), implied post-issue market cap is ~₹2,847 cr (~₹28.5 billion).	OK	Basis for Offer Price, p.130
Where in DRHP: Compute Why It Matters: The absolute size of what you're buying. Benchmark / Red Flag Trigger: - Exact Citation: Basis for Offer Price, p.130
107	ROE vs peers	Ardee FY26 RONW (ROE) is 57.46%, significantly outperforming listed peers (Gravita 15.43%, Pondy Oxides 16.73%, Jain Resource 22.25%).	OK	Basis for Offer Price, p.130
Where in DRHP: Compare Why It Matters: Does quality justify any premium? Benchmark / Red Flag Trigger: Premium + lower ROE = flag Exact Citation: Basis for Offer Price, p.130
108	ROCE vs peers	Ardee FY26 ROCE is 44.26%, substantially higher than peers (Gravita 13.27%, Pondy Oxides 19.88%, Jain Resource 20.92%).	OK	Basis for Offer Price, p.130
Where in DRHP: Compare Why It Matters: Capital efficiency relative to price. Benchmark / Red Flag Trigger: - Exact Citation: Basis for Offer Price, p.130
109	Growth vs peers	Ardee 3-year revenue CAGR of 58.81% and EBITDA CAGR of 128.96% outperform peers (Gravita rev CAGR 16.17%, Pondy Oxides 38.57%, Jain Resource 46.80%).	OK	Basis for Offer Price, p.133
Where in DRHP: Compare Why It Matters: Does faster growth justify the premium? Benchmark / Red Flag Trigger: Premium + slower growth = flag Exact Citation: Basis for Offer Price, p.133
110	Margins vs peers	Ardee FY26 EBITDA margin of 12.60% and PAT margin of 7.25% beat peers (Gravita EBITDA margin 10.20%, Pondy Oxides 7.09%, Jain Resource 5.85%).	OK	Basis for Offer Price, p.133
Where in DRHP: Compare Why It Matters: Quality of earnings relative to price. Benchmark / Red Flag Trigger: - Exact Citation: Basis for Offer Price, p.133
111	IPO price vs WACA / pre-IPO placement (the markup)	Promoter WACA is ₹Nil (due to 15:1 bonus issue in Aug 2025). High gap between promoter acquisition cost and public issue price.	Watch	Capital Structure, p.112; Details of OFS, p.1
Where in DRHP: Basis for Offer Price Why It Matters: What insiders paid versus what you're paying. Benchmark / Red Flag Trigger: Large multiple over WACA = flag Exact Citation: Capital Structure, p.112; Details of OFS, p.1
112	Is the premium justified by ROCE / ROE / growth / margins?	Superior ROCE (44.26%) and growth (58.81% CAGR) justify a peer-level multiple, but weak cash conversion (CFO/PAT 0.35x) and promoter litigation command a safety discount.	Watch	Basis for Offer Price, p.130, 133
Where in DRHP: Synthesise Why It Matters: The core valuation verdict. Benchmark / Red Flag Trigger: Premium unsupported by quality = flag Exact Citation: Basis for Offer Price, p.130, 133
113	What growth does the price implicitly assume?	At peer P/E (~33.6x), the valuation assumes Ardee maintains 25-30%+ earnings CAGR and successfully scales export volumes to absorb expanded 156,950 MTPA capacity.	Watch	Basis for Offer Price, p.130; Objects, p.116
Where in DRHP: Reverse the multiple / judgment Why It Matters: Are the embedded expectations realistic? Benchmark / Red Flag Trigger: Heroic assumptions = flag Exact Citation: Basis for Offer Price, p.130; Objects, p.116

LAYER 9 • STATED RISK ADMISSIONS

In The Company's Own Words: Stated Risk Admissions

Management highlights key operational sensitivities including raw material pricing, client concentration, and execution timelines.

#	Checkpoint	Your Finding (Prospectus Data)	Status	Page Ref
114	Top 5 risk factors the company itself lists	(1) Top customer concentration (Amara Raja 40.64%); (2) Battery/metal end-use industry concentration (84.79%); (3) Raw material import dependency (86.94%); (4) Limited operating history under present management; (5) High debt-to-equity ratio (1.25x in FY26, 4.87x in FY24).	Watch	Risk Factors #1-#5, p.29-33
Where in DRHP: 'Risk Factors' Why It Matters: Management's own stated worries - read them first. Benchmark / Red Flag Trigger: - Exact Citation: Risk Factors #1-#5, p.29-33
115	Any genuine dealbreaker buried in boilerplate?	DGGI GST investigation into ₹9.81 cr alleged fake Input Tax Credit against promoter Sandeep Aggarwal (Risk Factor #29, Litigation p.380) and pre-IPO statutory auditor resignation in March 2025.	Flag	Outstanding Litigation, p.380; General Info, p.90
Where in DRHP: 'Risk Factors' Why It Matters: The serious risks hide among generic ones; find them. Benchmark / Red Flag Trigger: - Exact Citation: Outstanding Litigation, p.380; General Info, p.90
116	Quantified risks (e.g. 'X would cut revenue by Y%')	Loss of top customer Amara Raja would reduce revenue by 40.64% (₹474.56 cr); DGGI GST tax demand confirmed at ₹0.38 cr (against original ₹9.81 cr claim).	Watch	Risk Factors #1, p.29; Litigation, p.380
Where in DRHP: 'Risk Factors' Why It Matters: The risks management bothered to quantify are usually the real ones. Benchmark / Red Flag Trigger: - Exact Citation: Risk Factors #1, p.29; Litigation, p.380
117	Going-concern or liquidity language anywhere?	No going-concern qualification in statutory auditor report. Liquidity relies on working capital lines and IPO proceeds.	OK	Auditor's Report, p.283; Financials, p.79
Where in DRHP: Risk Factors / Auditor Why It Matters: A direct signal of survival risk. Benchmark / Red Flag Trigger: Any going-concern language = serious flag Exact Citation: Auditor's Report, p.283; Financials, p.79

AUDIT TALLY • 117-CHECKPOINT RISK MATRIX

Red-Flag Dashboard: 117-Checkpoint Audit Tally

70

Checkpoints Clean (OK)

32

Watchlist Monitor Rows

12

High-Severity Red Flags

117

Total Forensic Checkpoints

L1 Story & Positioning

10 0 0

L2 Issue Structure & Objects

10 4 0

L3 Business Quality

8 7 3

L4 Financial Quality

19 4 4

L5 Governance

7 4 2

L6 Related Party Transactions

6 2 0

L7 Litigation & Regulatory

2 3 2

L8 Valuation

7 6 0

L9 The Company's Own Risk Factors

1 2 1

Layer 1: Story & Positioning

10 OK 0 Watch 0 Flag

Layer 2: Issue Structure & Objects

10 OK 4 Watch 0 Flag

Layer 3: Business Quality

8 OK 7 Watch 3 Flag

Layer 4: Financial Quality

19 OK 4 Watch 4 Flag

Layer 5: Governance

7 OK 4 Watch 2 Flag

Layer 6: Related Party Transactions

6 OK 2 Watch 0 Flag

Layer 7: Litigation & Regulatory

2 OK 3 Watch 2 Flag

Layer 8: Valuation

7 OK 6 Watch 0 Flag

Layer 9: The Company's Own Risk Factors

1 OK 2 Watch 1 Flag

How To Read This Risk Matrix

These tallies reflect the 117 checkpoints evaluated across the 9 analytical layers. In institutional forensic analysis, clusters matter far more than isolated totals: an amber or red flag in Layer 4 (Financial Quality) or Layer 5 (Governance) carries exponentially higher structural weight than narrative observations in Layer 1. Always evaluate flags against company peers and industry context.

Statutory Educational Compliance & Analyst Disclaimer

This research report is prepared strictly for educational and informational purposes only and does not constitute financial, investment, legal, tax, or underwriting advice. Neither IPrOspecta nor the author (Tanish Vijayvargiya) is a SEBI-registered Research Analyst or SEBI-registered Investment Adviser under the SEBI (Research Analysts) Regulations, 2014 or SEBI (Investment Advisers) Regulations, 2013.

Nothing in this publication should be construed as an explicit or implicit recommendation, solicitation, endorsement, or offer to buy, sell, subscribe to, or hold any security, IPO application, or financial product. Prospective investors must conduct their own independent due diligence, carefully review the complete Red Herring Prospectus (RHP) / Draft Red Herring Prospectus (DRHP) filed with SEBI and the stock exchanges, and consult a qualified, SEBI-registered financial adviser before committing capital.

Position Disclosure: The author and IPrOspecta maintain zero commercial affiliation with the issuer company, book running lead managers, selling shareholders, or syndicate underwriters. All opinions expressed represent personal analytical frameworks.