Arete 22 IPO

Arete 22 Ltd. is an aluminium alloy wheel manufacturer based in Auto Nagar, Visakhapatnam, Andhra Pradesh. The company makes wheels for two-wheelers and caters to both original equipment manufacturers (OEMs) and the replacement market.

Arete 22 handles the complete manufacturing process in-house, from designing and casting to machining, finishing, and testing. It focuses on producing lightweight and durable wheels that can help improve a two-wheeler’s performance, ride quality, and efficiency.

The company manufactures wheels for both motorcycles and scooters using modern die-casting technology and in-house finishing facilities. It holds IATF 16949:2016 and ISO 9001:2015 certifications, reflecting its focus on quality and manufacturing standards.

Arete 22 supplies its products to major two-wheeler manufacturers in India, including TVS Motor Company, Hero MotoCorp, and Bajaj Auto. Its wheels form an important part of two-wheelers and contribute to their overall performance and braking systems.

Arete 22 IPO Objectives

• ₹150 crore will be used to meet working capital needs, mainly for purchasing aluminium, aluminium alloys, other raw materials, and bought-out components. Aluminium accounts for a major share of the company’s purchases and requires advance payment to suppliers.
• ₹120 crore will be used to repay or prepay part of the company’s secured borrowings. This is expected to reduce debt and finance costs.
• ₹34.82 crore will be used to purchase plant and machinery for the company’s existing manufacturing facilities.
• A portion of the IPO proceeds will be used for general corporate purposes, with the final amount to be decided later.

Industry Outlook

• India’s auto components industry reached a turnover of ₹6.73 lakh crore in FY25, growing at a 14% CAGR between FY20 and FY25. Continued growth in OEM supplies, exports, and the aftermarket is expected to support demand for auto component manufacturers.
• Two-wheelers account for around three-fourths of India’s annual vehicle production, making them a key demand driver for auto component manufacturers, including alloy wheel makers.
• Consumers are increasingly shifting towards premium motorcycles, supported by rising incomes and higher discretionary spending. Premium motorcycles are expected to account for 29–31% of the market by FY31, creating demand for higher-value components such as alloy wheels.
• India’s two-wheeler exports grew 23.8% to 5.2 million units in FY26. Since alloy wheels are commonly fitted as standard equipment on export-oriented models, higher exports could increase the addressable market for alloy wheel manufacturers.
• EV penetration in the combined two-wheeler and three-wheeler segment increased from 1.1% in FY21 to 9.6% in FY25. Electric scooters commonly use alloy wheels, creating an additional growth opportunity for manufacturers supplying EV-focused OEMs.
• Schemes such as FAME II and PM E-DRIVE have supported EV adoption through purchase incentives and infrastructure development. The extension of PM E-DRIVE support for electric two-wheelers until March 2028 could further support demand.
• OEMs are increasingly adopting lightweight and higher-strength components. Technologies such as low-pressure die casting and flow forming are helping manufacturers produce lighter and stronger alloy wheels, creating opportunities for companies with modern manufacturing capabilities.
• As a supplier of aluminium alloy wheels to major two-wheeler OEMs such as TVS Motor Company, Hero MotoCorp, and Bajaj Auto, Arete 22 is positioned to benefit from growth in two-wheeler production, premiumisation, exports, and EV adoption.

Financial Performance of Arete 22 Limited

Arete 22 Peer Comparison

Strengths and Opportunities for Arete 22

• The company operates two facilities in Kolar, Karnataka, and Bilaspur, Haryana, with a combined installed capacity of 6 million aluminium alloy wheels annually. Their proximity to OEM plants supports faster deliveries and helps reduce logistics costs.
• The company manages the complete wheel manufacturing process, giving it greater control over quality, production timelines, material usage, and costs.
• Arete 22 supplies leading two-wheeler manufacturers across both ICE and EV platforms. Its ability to meet stringent OEM qualification requirements supports repeat business and customer retention.
• The company recycles manufacturing scrap and uses in-process quality controls to reduce material wastage, rejection rates, and melting losses. This helps optimise per-unit production costs.
• Long-standing relationships with approved domestic suppliers provide access to raw materials that meet OEM specifications and support production continuity and shorter procurement lead times.
• The company has dedicated quality teams and follows quality checks at multiple stages, from raw material inspection to final product testing. Its sales return rate fell to just 0.02% of revenue in FY26, indicating consistent product quality.
• Both manufacturing facilities hold IATF 16949:2016 and ISO 9001:2015 certifications, supporting the company’s ability to meet automotive quality and process standards.
• The promoters have over seven decades of collective experience across manufacturing and allied industries. The broader management team also brings significant experience across production, business development, project management, and finance.
• The company recorded a 118.7% revenue CAGR between FY24 and FY26, reflecting its rapid expansion in manufacturing capacity and OEM business.

Risks and Threats for Arete 22

• The top 5 customers contributed 98.77% of revenue in FY26, creating significant dependence on a small number of customers.
• The company does not have firm, long-term volume commitments with its OEM customers. Any reduction, modification, or termination of orders could affect revenue.
• Around 98.77% of revenue in FY26 came from the two-wheeler automotive sector. A slowdown in two-wheeler demand could therefore directly impact the company’s business.
• The company depends heavily on a limited group of suppliers for key raw materials and, except for one supplier, does not have long-term supply agreements. Supply disruptions could affect production.
• Aluminium alloy ingots, cast iron rings, and paints are key inputs. Fluctuations in their prices or availability could increase production costs and pressure profitability.
• The business requires substantial funds for maintaining inventories and providing credit to OEM customers. Working capital requirements rose sharply from ₹18.50 crore in FY24 to ₹175.85 crore in FY26.
• Although established in 2021, the company began manufacturing aluminium alloy wheels only in 2023. Its relatively short operating history may make it harder for investors to assess its long-term performance and scalability.
• Given its growing working capital requirements, the company may need additional financing in the future. Limited access to funding or higher borrowing costs could affect its expansion plans and financial position.

Arete 22 IPO Reservation

Arete 22 IPO  Promoter Holding 

Arete 22 IPO Registrar and Lead Managers

Arete 22 IPO Lead Managers

• Unistone Capital Pvt. Ltd.

Registrar for Arete 22 IPO

Name: Bigshare Services Pvt. Ltd.

Phone: 8657578989

Email ID: ipo@bigshareonline.com

How To Check the Allotment Status of the Arete 22 IPO?

1. Login to Your Angel One Account: Open the Angel One app or website and log in with your credentials.
2. Locate the IPO Section: Navigate to the 'IPO' section on the platform.
3. Select IPO: Find and select the Milky Mist Ltd. IPO from the list of open IPOs.
4. Enter the Lot Size: Specify the number of lots you want to bid for.
5. Submit Your UPI ID: Enter your UPI ID to link your payment method and submit your application.
6. Approve Funds: Once you receive the bid request on your UPI app, approve it by entering your UPI PIN.

How To Apply for Arete 22 IPO Online?

Steps to check IPO allotment status on Angel One’s app:

1. Log in to the Angel One app.
2. Go to the IPO Section and then to IPO Orders.
3. Select the individual IPO that you had applied for and check the allotment status.
4. Angel One will notify you of your IPO allotment status via push notification and email.

Contact Details of Arete 22 IPO

Address: D1, D2 B Block, Autonagar, Visakhapatnam, Andhra Pradesh, 530012

Phone: +91-8142288666

Email: cs@arete22.com