ARC Insulation and Insulators Ltd., a leading manufacturer of glass fiber reinforced polymer (GFRP) composite products, has announced its Initial Public Offering (IPO) that will open for subscription on August 21, 2025, and close on August 25, 2025. The IPO is a Book Built Issue with a total size of ₹41.19 crore, comprising a Fresh Issue of 30.45 lakh shares worth ₹38.06 crore and an Offer for Sale (OFS) of 2.50 lakh shares worth ₹3.12 crore.

The company has fixed a price band of ₹119–₹125 per equity share, with a lot size of 1,000 shares. Individual retail investors must apply for at least 2 lots (2,000 shares), which requires a minimum investment of ₹2,50,000. The tentative allotment date is set for August 26, 2025, while the shares are expected to be listed on the NSE SME platform on August 29, 2025.

Company Background

Founded in 2003 as a proprietorship concern and later incorporated in 2008, ARC Insulation and Insulators Ltd. has grown into a prominent name in the construction, infrastructure, and industrial solutions sector. The company specializes in high-performance GFRP composite products, which are widely used across construction, chemical processing, infrastructure, and other industries.

At the helm of the company are Mr. Manish Bajoria (Promoter and Managing Director), who has more than 16 years of experience, and Ms. Neelam Bajoria (Promoter and Executive Director), who brings over 15 years of leadership expertise in the composites sector. Their leadership has played a crucial role in driving the company towards sustainable business growth and expansion into new markets.

Financial Performance

ARC Insulation & Insulators Ltd. has shown consistent growth in revenues and profitability over the last three financial years.

• For FY23, the company reported revenues of ₹2,448.01 lakh, EBITDA of ₹478.69 lakh, and PAT of ₹263.81 lakh.

• For FY24, revenues grew to ₹2,883.37 lakh, EBITDA to ₹943.13 lakh, and PAT to ₹610.40 lakh.

• For FY25, revenues surged further to ₹3,315.32 lakh, EBITDA to ₹1,293.98 lakh, and PAT to ₹856.58 lakh.

These results highlight a steady upward trajectory in both revenue growth and profitability.

Valuation Metrics

The pre-issue EPS of the company stands at ₹12.15, while the post-issue EPS is projected to be ₹8.32. At the upper price band of ₹125, the pre-issue P/E ratio is 10.28x, while the post-issue P/E ratio is 15.03x. The company’s ROCE for FY24 is an impressive 49.84%, while its ROE and RoNW are both at 45.47%, suggesting strong returns.

Grey Market Premium (GMP)

The IPO has attracted attention in the grey market, where it is trading at a premium of ₹20 per share. This suggests possible listing gains of around 16% over the issue price. However, it is important to note that GMP is unofficial, unregulated, and purely speculative, hence should not be considered as the sole basis for investment.

Lead Managers and Registrar

The issue is being managed by GRETEX CORPORATE SERVICES LIMITED as the Book Running Lead Manager, while MAASHITLA SECURITIES PRIVATE LIMITED acts as the registrar. Gretex Share Broking Limited will serve as the market maker for this IPO.

Risk Factors

Like any IPO, ARC Insulation & Insulators also comes with certain risks:

• The SME listing carries higher volatility compared to mainboard IPOs.

• The minimum investment of ₹2,50,000 makes it less accessible for small retail investors.

• The demand in the GFRP sector is dependent on construction and infrastructure spending, which may fluctuate with market cycles.

Investment Outlook

Given the company’s strong financial growth, consistent profitability, and attractive valuation metrics, the IPO looks reasonably priced. The Grey Market Premium indicates decent listing gains, but investors must keep in mind the high-risk, high-return nature of SME IPOs.

Experts suggest that this IPO is most suitable for risk-taking investors who are looking for short-term listing gains. Conservative investors may choose to wait and track the company’s post-listing performance before making further decisions.

Conclusion

The ARC Insulation & Insulators IPO represents an opportunity to invest in a growing SME with strong fundamentals and steady profitability. The price band, combined with the GMP signals, may attract investors eyeing listing gains. However, as always, investors should do thorough research and evaluate their own risk appetite before subscribing.

The Upcoming IPOs in this week and coming weeks are Abril Paper Tech, Sneha Organics, Sugs Lloyd, Anlon Healthcare, NIS Management, Sattva Engineering Construction, Globtier Infotech, Current Infraprojects, Vikran Engineering.

The Current active IPO are Shivashrit Foods, Anondita Medicare, Classic Electrodes (India), ARC Insulation & Insulators, Mangal Electrical Industries, .

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