CMR Green IPO - Aluminium Recycling Leader. 3rd Time Lucky?
- Jun 4
- 6 min read
Updated: Jun 8
We analyze the upcoming IPO of CMR Green Limited, which is a non-ferrous metal recycling company, focussing mainly on aluminium recycling. This is their third attempt at going public.
Before we dive into the company, lets quickly look at the industry in which it operates.
Industry Landscape
What is Aluminimum Recycling?
Aluminium Recycling is the process of recovering scrap aluminium, melting it and reprocessing it into new products. The manufacturing process for recycled aluminium is explained in detail below:
Why Aluminium Recycling?
Aluminium is endlessly recyclable without any loss in quality, making it an ideal material for sustainable industrial use. India’s primary aluminium industry emits 14 tonnes of CO₂ per tonne of aluminium, v/s. 0.3 tonnes for recycled aluminium. Liquid aluminium offers additional sustainability and cost benefits by eliminating the need for remelting, saving ~528 kg of CO₂ emissions per metric tonne.
Additionally, secondary aluminium production has approximately 90% lower capex intensity compared to primary production, making it the most cost-effective pathway to decarbonizing the industry.
The Tariff Advantage
The aluminium industry has been significantly affected by the Trump trade policies. Initially subject to a 10% tariff in 2018, this duty was increased to 25% in early-2025 and then raised to 50% effective June 4, 2025, as part of a comprehensive strategy aimed at addressing global overcapacity, particularly from China. USA is heavily dependent on foreign sources for its aluminium requirements, with more than 50% of total consumption satisfied through imports.
However recycled aluminium and steel are not subject to duties. Hence, India could become a cost-effective and reliable supplier of stainless-steel scrap, aluminium alloys, zinc-based secondary products, and copper-based secondary products.
Trump tariff decision has disrupted global trade flows, increasing India’s exposure to inexpensive metal imports from Asian countries such as China, South Korea, and Vietnam.
Competitive Landscape
Aluminium recycling industry is highly fragmented, with multiple small & mid-size recyclers who incur lower capex and achieve faster break-even but have lower bargaining power.
CMR Green’s liquid aluminium infrastructure, transportation capabilities, customer approvals, etc. form a key differentiation over majority of the peers.
Company | Aluminium Recycling Capacity (mtpa) |
|---|---|
CMR Green | 5,20,950 (FY25) |
Daiki Aluminium Industry India Pvt Ltd | 70,000-1,10,000 |
Century Aluminium Manufacturing | 68,000 |
G.R. Metalloy Private Limited | 25,000-40,000 |
IMAC Alloy Casting Pvt. Ltd | 20,000 |
Shree Balaji Alumnicast Pvt. Ltd | 1,22,000 (combined) |
Sree Sumangala Metals and Industries Pvt. Ltd | 40,000 |
Sunalco Alloys Pvt. Ltd | 72,000 |
Baheti Recycling Industries Ltd | 29,160 |
Jain Resource Recycling | 24,000 |
Gravita India | ~30,000 |
Pondy Oxide | 12,000 |
MTC Group | 2,20,000 (combined) |
Business Overview
CMR Green is a non-ferrous metal recycling company, with largest aluminium recycling capacity in India. Incorporated in 2005 under the name Grand Metal Industries Pvt Ltd, the company has grown over the years - in 2008, it started supplying liquid aluminium as well to customers, with supply extended upto 25kms in 2013.
Products Manufactured
CMR Green has a market share of ~10-12% in the recycled aluminium industry in India (based on FY25 volumes sold). Automotive industry is the key end consumer, contributing to ~80% of the Company’s revenue.
Manufacturing Facilities
Company has 13 facilities in key auto clusters across India with 3 facilities are situated at Tatarpur, Manesar and Bawal in Haryana, 2 facilities at Vanod and Halol in Gujarat, 1 facility in Pune, 1 facility situated each at Chennai and Vallam in Tamil Nadu and 1 facility each at Haridwar, Bhiwadi, Sambalpur and Tirupati, in the states of Uttarakhand, Rajasthan, Odisha and AP, respectively.
Key Milestones & Insights
2011 | Received private equity investment from Indian Automotive Components Manufacturers Private Equity Fund-1-Domestic |
2012 | JV with Nikkei Aluminium MC Co. Limited, Japan for manufacturing liquid aluminium alloy at Bawal |
2013 | JV with Toyota Tsusho Corporation, Japan for manufacturing aluminium alloy ingot at Chennai |
2013 | Received private equity investment from Global Scrap Processors Limited |
2013 to 2020 | Started new production units, received certifications, deployed IT systems (incl. ERP), processed stainless-steel scrap, etc. |
2021 | Scheme of Arrangement to merge group entities into single company to simplify group structure and eliminate cross holdings |
2024 | Commenced operations at Tirupati Facility for aluminium billets and in Pune under JV Co- Nikkei CMR Aluminium |
2025 | Commenced manufacturing of aluminium alloys liquid/Ingots at Sambalpur for Hindalco |
2025 | Entered into a Shareholders’ Agreement with Nippon Light Metal Co., Ltd., Japan for CMR Eco plant at Tirupati |
Financial Performance
The company has achieved steady growth in past 2 years, driven mainly by capacity expansion.
FY24 PAT included goodwill write off (net of tax) of ~Rs.937 crores
IPO Details
The IPO is completely an offer for sale of Rs631cr, with private equity Global Scrap Processors (almost completely exiting the company) to receive ~Rs500cr and rest is being diluted (~3%) by the promoter group. Promoter holding post issue will be at 84% and market capitalisation of CMR Green will be at Rs. 4,200cr based on upper price band of the IPO.
The Company had undertaken a buyback in July 2023 at a price of Rs.136/share v/s. IPO upper price band of Rs. 192/share in Jun’2026.
The issue has a strong anchor book in the form of SBI MF, ICICI Pru MF, HDFC MF, Nippon MF, Kotak MF and Goldman Sachs taking 10.61% each from the anchor portion.
Positives
Industry Leader
As seen in the competitive landscape section above, CMR Green holds 10-12% market share in a highly fragmented industry - which showcases its sourcing expertise, location advantage and overal industry leadership position.
Potential Regulatory Stimulus
Numerous statutes have been put in place over the last few years for vehicle scrappage, promoting recycling ecosystem, environmental protection, etc. The EPR guidelines have also come into effect from 1 April 2026 with obligation on relevant stakeholders to register on centralized CPCB portal and meet specific annual recycling targets for metal-intensive sectors like electronics, automotive and packaging.
Some key highlights from India's Vision Document on Aluminium Sector 2025, that support recycled aluminium:
Other Growth Drivers
While management intends to increase its recycling capacities; the macro growth triggers could include increasing aluminization of ICE vehicles, higher penetration of EVs, growing demand of recycled wrought (rolling, forging & extrusion) alloys and such shift of business from small to large scale players could benefit the company.
Management intends to diversify into new product lines such as aluminium billets and used beverage cans recycling, and has already incurred significant capex for the same.
Key Risks
Raw Material Sourcing
Cost of raw materials and traded goods form 90% of the total expenses and sourcing is a key moat of any recycling company. While CMR Green sources scrap from 198 suppliers, 75-80% of scrap is imported. 50% of total scrap imports come from USA. This leaves the company vulnerable to geo-political and logistical disturbances, and currency volatility.
Commodity Price Volatility
Company imports most of its raw materials and makes payments in foreign currencies, thereby exposing itself to currency fluctuation risk as well as pricing risk. It does not enter into any firm commitment long-term contracts with suppliers.
As a practice, the aluminium alloy prices are generally fixed on a monthly or quarterly basis by one of its major OEM customers, which generally forms the basis for most of its customers. Various factors including movements in scrap prices, currency (and monthly movements therein) are considered while fixing the alloy prices.
While there is some natural hedge due to its arragement with suppliers and customers, high short-term price as well as currency volatility can adversely impact profitability.
Other Key Risks
Sizeable exposure to automotive sector
Increasing raw material prices and dollar due to the ongoing West Asia conflict could mean the company will potentially report subdued numbers for Q4 FY26 and/or Q1 FY27
Thin EBITDA margin of 4-5% means limited room to absorb material price hikes (to the extent they are not able to pass on to customers) or sustain competitive pricing pressure (if it comes). While low margins are observed across the industry, the company’s margins are lower than some listed peers like Jain Resource Recycling, Pondy Oxides, Gravita and Baheti Recycling.
Low margins and decent working capital means the company has negative operating cash flows.
Short term borrowings (likely for working capital) as a % of revenue is increasing year-on-year, implying higher incremental capital is required to fund the growth.
Quality and purity limitations in scrap procured.
Environmental safety risks.
Valuation
Assuming 9MFY26 earnings are extrapolated to FY26, CMR Green is priced at 19.4x P/E. This is relatively cheaper compared to listed recycling peers like Gravita India, Pondy Oxide, Jain Resource Recycling and Baheti Recycling which are trading at 25-30x FY26 P/E.
Disclaimer:
This analysis is for educational purpose only and should not be considered as an advice to subscribe or pass the IPO. Please do you own due diligence before investing. We are not SEBI registered Research Analysts.
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