Horizon Reclaim (India) IPO

India is among the world's largest consumers of rubber and one of the largest generators of waste tyres. The increasing focus on sustainability, recycling, waste management, and resource efficiency has significantly improved the outlook for reclaimed rubber manufacturers.

Several long-term trends support industry growth:

• Rising automobile production

• Growing tyre replacement market

• Increasing demand for low-cost rubber substitutes

• Government emphasis on waste recycling

• Expansion of infrastructure and industrial manufacturing

Reclaimed rubber serves as an economical alternative to natural and synthetic rubber while reducing environmental burden. Manufacturers use reclaimed rubber in:

• Tyres

• Footwear

• Conveyor belts

• Mats

• Automotive components

• Industrial rubber products

The industry also benefits from Extended Producer Responsibility (EPR) regulations that encourage organized recycling and recovery of waste materials.

As environmental regulations become stricter and raw material costs remain volatile, demand for recycled rubber products is expected to strengthen over the coming years.

Horizon manufactures recycled rubber products using waste tyres, tubes, tread peelings and industrial rubber scrap. The company converts these materials into commercially usable reclaimed rubber products.

The company offers three primary product categories:

Natural Rubber Reclaim

Produced from tyre casings and rubber tubes.

Applications include:

• Footwear soles

• Floor mats

• Tyre base layers

• Moulded rubber products

Synthetic Rubber Reclaim

Includes:

• EPDM reclaim rubber

• Butyl reclaim rubber

Applications include:

• Automotive seals

• Hoses

• Gaskets

• Construction profiles

Crumb Rubber

Produced from recycled tyres.

Applications include:

• Road construction

• Sports surfaces

• Roofing products

• Construction materials

The company sources raw materials through:

• Scrap dealers

• Tyre dismantlers

• Waste aggregators

• Imported rubber scrap suppliers

This diversified sourcing model helps maintain consistent production levels.

Manufacturing Infrastructure

As of March 31, 2026, Horizon operated a manufacturing facility in Roorkee, Uttarakhand with installed capacity of approximately 14,100 metric tonnes annually.

The company has also:

Unit III – Bhagwanpur

• Construction completed

• Machinery installed

• Commercial production yet to commence

Unit II – Rajkot, Gujarat

• Pyrolysis oil project

• Development substantially completed

• Installation of reactors largely completed

These projects provide future capacity expansion opportunities and product diversification potential.

The company operates within a heavily regulated manufacturing and environmental framework.

Important regulatory areas include:

Environmental Regulations

• Air pollution control

• Water pollution management

• Waste disposal norms

• Hazardous waste handling

Factory and Labour Laws

• Factories Act compliance

• Employee welfare requirements

• Workplace safety standards

Industrial Licenses

• Manufacturing permissions

• Local authority approvals

• Pollution control clearances

Corporate Regulations

• Companies Act compliance

• Securities regulations

• Listing requirements

Management has highlighted that business operations depend on continuous compliance and timely renewal of permits and licenses. Any interruption may affect operations and profitability.

Like most SME manufacturing businesses, Horizon faces a mix of operational, financial, regulatory and market risks.

Key Business Risks

Capital Intensive Operations

Manufacturing expansion requires significant investments in land, machinery, infrastructure and working capital. Future growth may require additional financing.

Customer Concentration

The company depends on a relatively small customer base.

Top 10 customers contributed:

Loss of major customers could materially impact revenue.

Capacity Utilization Risk

Manufacturing efficiency depends on:

• Raw material availability

• Utility supply

• Labour availability

• Market demand

Under-utilization could negatively affect margins and profitability.

Regulatory Risk

Failure to obtain or renew statutory approvals may affect production continuity.

Growth Execution Risk

Expansion plans require successful execution and capital deployment. Delays may affect returns on investment.

The company is promoted by:

Mohit Bajaj

• Managing Director

• Chief Financial Officer

• Promoter

Malika Bajaj

• Chairperson

• Whole-Time Director

• Promoter

Together, the promoters held approximately 88.79% of pre-issue equity share capital before the IPO.

The promoter group has been closely associated with the business since inception and has played a central role in capacity creation and business development.

Group Entities and Associate Companies

A notable feature of the company structure is its simplicity.

As disclosed:

• No holding company

• No subsidiary company

• No associate company

• No joint venture entity

The company has also disclosed that group entities are not engaged in competing businesses.

This reduces concerns around:

• Related-party competition

• Business diversion

• Conflict of interest

Leadership Team and Key Executives

The leadership team remains promoter-driven.

Key Management Personnel

Recent strengthening of management includes the appointment of a dedicated compliance officer and company secretary in 2025 as part of public market readiness.

Management highlights:

• Industry experience

• Operational expertise

• Long-standing customer relationships

• Manufacturing know-how

These capabilities form an important competitive advantage in a niche recycling segment.

As part of the public listing process, Horizon has established governance structures expected of a listed company.

Board-level committees include:

Audit Committee

Responsible for:

• Financial reporting oversight

• Internal controls

• Audit supervision

• Monitoring IPO proceeds utilization

Nomination & Remuneration Committee

Responsible for:

• Director appointments

• Senior management evaluation

• Compensation policies

Stakeholders Relationship Committee

Responsible for:

• Investor grievances

• Shareholder communication

• Compliance with listing obligations

The governance framework is intended to improve transparency, accountability and investor protection after listing.

The company has disclosed that, except for matters specifically disclosed in the offer document, there are:

• No material criminal proceedings

• No major tax disputes

• No significant regulatory actions

• No major enforcement proceedings against promoters or directors

Additionally:

• Promoters are not wilful defaulters

• Company is not classified as a fraudulent borrower

• No promoter has been declared a fugitive economic offender

• No capital market access restrictions have been imposed by regulators

This relatively clean legal profile is a positive factor for prospective investors.

Horizon Reclaim has demonstrated strong financial growth over the last three financial years. Revenue, profitability, and net worth have all expanded significantly, indicating successful scaling of operations and improving operating efficiency.

Financial Summary

Revenue Analysis

Revenue increased from ₹2,032.71 lakh in FY24 to ₹4,942.08 lakh in FY26, representing more than a twofold increase in just two years. This growth reflects:

• Strong demand for reclaimed rubber products

• Improved customer acquisition

• Better utilization of manufacturing capacity

• Growing acceptance of recycled rubber products across industries

Revenue growth stood at:

• FY25: 78.17%

• FY26: 36.46%

These growth rates compare favorably with the listed peer group.

Profitability Analysis

One of the most striking developments has been margin expansion.

EBITDA increased from only ₹116.90 lakh in FY24 to ₹1,632.14 lakh in FY26. PAT grew nearly fifteen times during the same period.

This suggests:

• Improved product mix

• Better operating leverage

• Efficient procurement of scrap materials

• Stronger pricing realization

PAT margins improved from 3.50% in FY24 to 21.25% in FY26, a substantial transformation in earnings quality.

Borrowings and Financial Obligations

The company has historically relied on debt financing for expansion and working capital requirements.

Debt Position

The increase in leverage reflects:

• Capacity expansion

• Working capital funding

• Infrastructure investments

Management has disclosed that a major portion of IPO proceeds will be utilized toward repayment and prepayment of borrowings. This should significantly improve the balance sheet after listing.

Debt Risk Assessment

Current leverage levels are manageable considering:

• Strong profit growth

• Healthy operating margins

• Rising net worth

However, investors should monitor future debt levels because manufacturing businesses can become vulnerable during demand slowdowns.

Although detailed cash flow statements are extensive, the company's operating performance indicates improving cash generation capability.

Positive indicators include:

• Rising EBITDA

• Expanding profits

• Increasing net worth

• Growing scale of operations

Potential cash flow pressures arise from:

• Working capital-intensive operations

• Inventory requirements

• Expansion projects

• Capital expenditure commitments

The IPO is expected to ease pressure by injecting fresh capital and reducing debt servicing obligations.

Working Capital Considerations

The reclaimed rubber business requires continuous procurement of scrap tyres and rubber waste.

Therefore, efficient management of:

• Inventory

• Receivables

• Supplier payments

remains critical for maintaining healthy cash flows.

Important Financial Ratios

Key Performance Indicators

Ratio Analysis

EBITDA Margin

Margins expanded dramatically from 5.72% to 32.64%.

This indicates:

• Strong operational efficiencies

• Better cost control

• Favorable product economics

Return on Equity

ROE of 53.63% in FY26 is exceptionally strong and reflects effective utilization of shareholder capital.

Return on Capital Employed

ROCE remains healthy at 25.45%, though lower than FY25 due to increased capital deployment and ongoing expansion projects.

Management's strategy focuses on scaling manufacturing capacity while strengthening its position in the recycled rubber ecosystem.

Key Strategic Priorities

Capacity Expansion

The company has already invested in:

• Bhagwanpur facility

• Gujarat pyrolysis project

These investments can support future growth and diversification.

Product Diversification

The company continues expanding its reclaimed rubber offerings to cater to:

• Automotive customers

• Industrial rubber manufacturers

• Construction applications

Raw Material Security

A diversified sourcing network across India and imports helps ensure stable supply of scrap rubber.

Sustainability Advantage

Increasing focus on ESG and circular economy practices creates long-term opportunities for organized recycling companies.

Growth Challenges

Management also acknowledges several risks:

• Regulatory changes

• Capacity utilization risk

• Customer concentration

• Raw material availability

• Expansion execution risk

The IPO is entirely a fresh issue, meaning proceeds will be used for business growth rather than providing an exit to existing shareholders.

Proposed Utilization

Investor Perspective

The allocation is generally positive because:

• Debt reduction strengthens balance sheet

• Capital expenditure supports future growth

• Working capital improves operational flexibility

Large repayment of borrowings should also improve profitability through lower interest costs.

The final issue price was not available in the uploaded document at the time of publication. However, management has highlighted several factors supporting valuation.

Qualitative Factors

• Experienced promoters

• Established industry presence

• Operational track record

• Growing manufacturing base

• Strong execution capabilities

Quantitative Factors

Investors should evaluate:

• Revenue CAGR

• EBITDA growth

• PAT growth

• Return ratios

• Net worth growth

• Peer comparison

The company compares itself primarily with:

Lead Reclaim and Rubber Products Limited.

Valuation View

The valuation attractiveness ultimately depends on:

• Price-to-Earnings ratio

• EV/EBITDA multiple

• Price-to-Book ratio

which will be known only after the final issue price is announced.

IPO Structure

Post-Issue Dilution

The issue will constitute approximately:

• 27.00% of post-issue capital

• Net issue approximately 25.65% of post-issue capital

The fresh issue structure ensures that newly raised funds directly benefit the company.

Shareholding Pattern

Pre-Issue Promoter Holding

Promoters collectively hold:

1,26,49,680 equity shares

representing:

88.79% of pre-issue share capital.

Promoter Shareholding

Following the IPO, promoter ownership will dilute but promoters are expected to retain management control.

The high promoter stake demonstrates strong alignment between management and shareholders, though post-listing investors should continue monitoring governance and capital allocation decisions.

For income-focused investors, Horizon currently does not offer a dividend track record.

Dividend History

The company has not declared any dividend during the last three financial years and has also not declared any dividend in the current financial year.

Future Dividend Outlook

Management has indicated that future profits may largely be retained to support:

• Capacity expansion

• Working capital requirements

• Debt reduction

• Business growth initiatives

Dividend decisions will depend on:

• Profitability

• Cash flow position

• Capital expenditure plans

• Debt obligations

• Regulatory requirements

For investors, Horizon should currently be viewed as a growth-oriented SME listing rather than a dividend play.

Related-party transactions are a key area investors examine in promoter-driven businesses.

The company has disclosed related-party transactions in its financial statements and has stated that business dealings with related parties have been conducted in the ordinary course of business.

Investor Assessment

Positive observations include:

• No complex subsidiary structure

• No associate companies

• No joint ventures

• No competing group businesses

• No significant business diversion concerns disclosed

Monitoring Going Forward

After listing, investors should continue monitoring:

• Promoter remuneration

• Lease transactions

• Related-party purchases and sales

• Loans and advances

• Corporate guarantees

as part of annual governance reviews.

The company has disclosed that there are no extraordinary agreements that could materially alter investment decisions beyond those disclosed in the offer document.

Important Agreements

Issue Agreement

Executed with the Book Running Lead Manager for IPO management.

Registrar Agreement

Executed with KFin Technologies for share allotment and investor servicing.

Escrow and Sponsor Bank Agreement

Established for handling application money and settlement procedures.

Market Making Agreement

Executed with Giriraj Stock Broking Private Limited for SME market making obligations.

Other Disclosures

The company has specifically stated:

• No material shareholder agreements

• No profit-sharing arrangements involving promoters

• No unusual compensation arrangements linked to securities dealings

IPO Structure

Allocation Structure

Upon allotment and listing, shareholders will enjoy rights available under Indian corporate law and company articles.

Key Rights

Voting Rights

Shareholders can vote on:

• Director appointments

• Corporate actions

• Capital restructuring

• Major resolutions

Dividend Rights

Eligible to receive dividends if declared.

Rights Issue Participation

Existing shareholders may participate in future rights offerings.

Bonus Shares

Eligible for future bonus issues if declared.

Information Rights

Access to:

• Annual reports

• Financial statements

• Shareholder notices

• Corporate announcements

Exit Rights

In specific circumstances involving changes to issue objects, dissenting shareholders may receive exit opportunities under applicable regulations.

Several disclosures strengthen investor confidence.

Regulatory Standing

The company has disclosed:

• Not a wilful defaulter

• Not a fraudulent borrower

• No fugitive economic offender among promoters

• No capital market restrictions imposed on promoters or directors

• Compliance with SME listing eligibility norms

• Compliance with beneficial ownership requirements

Corporate Structure

Strategic Partners

The company has disclosed that it currently has no strategic or financial partners.

Horizon Reclaim (India) Limited operates in an attractive niche within India's recycling and sustainable manufacturing ecosystem. The company has delivered strong revenue growth, substantial profit expansion, improving return ratios, and increasing net worth over the last three years. The IPO proceeds are largely directed toward debt reduction, working capital support, and capacity enhancement, which are constructive uses of capital.

For investors, the key variables to watch after listing will be:

• Sustaining margins at current levels

• Successful commercialization of expansion projects

• Diversification of customer base

• Reduction in leverage

• Continued growth in reclaimed rubber demand

Overall, Horizon presents itself as a growth-focused SME manufacturing and recycling company positioned to benefit from long-term sustainability and circular economy trends, while carrying the typical execution and liquidity risks associated with SME IPOs.