ARC Insulation and Insulators Limited IPO has entered the market with an issue size of ₹41.19 crore, reflecting the company’s expansion plans and strong market confidence. The issue consists of a Fresh Issue of 30.45 lakh equity shares worth ₹38.06 crore and an Offer for Sale of 2.50 lakh shares worth ₹3.12 crore. The subscription period opened on 21 August 2025 and will close on 25 August 2025. The allotment date is scheduled for 26 August 2025, while the listing on NSE SME is expected on 29 August 2025.

The price band of the IPO has been fixed at ₹119 to ₹125 per equity share with a lot size of 1,000 shares. Retail investors are required to invest in a minimum of 2 lots (2,000 shares) amounting to ₹2,50,000, which makes this IPO suitable for high net-worth individuals and experienced investors rather than small retail participants. At the upper end of the price band, the market capitalisation of the company is projected to be ₹128.71 crore.

The company appointed Gretex Corporate Services Limited as the Book Running Lead Manager, Maashitla Securities Private Limited as the Registrar, and Gretex Share Broking Limited as the Market Maker for this issue.

Grey Market Premium and Listing Outlook

The Grey Market Premium (GMP) of ARC Insulation and Insulators IPO is currently around ₹20, suggesting a potential listing gain of approximately 16 percent over the issue price of ₹125. However, it is important to note that the GMP is an unregulated indicator and merely reflects market sentiment before official listing. It is highly speculative and not a reliable measure of final listing performance.

Subscription Status

By 12:00 PM on 22 August 2025, the IPO had been subscribed 2.37 times on its second day of bidding. This indicates strong investor demand, which could push the overall subscription figures higher before the issue closes on 25 August.

Anchor Investor Participation

ARC Insulation and Insulators successfully raised ₹11.71 crore from Anchor Investors ahead of the IPO. The company allotted 9,37,000 equity shares at ₹125 per share to anchor investors in consultation with the Book Running Lead Manager. Anchor investors subscribing at the upper price band reflects confidence in the company’s valuation and growth potential.

Company Background and Business Model

Founded in 2003 as a proprietorship concern and incorporated in 2008 as a company, ARC Insulation and Insulators Limited is engaged in manufacturing high-performance Glass Fiber Reinforced Polymer (GFRP) composite products. These products are widely used in construction, infrastructure, chemical processing, and other industrial applications.

Over the years, the company has built a strong reputation for innovation and durability in its product offerings. With GFRP composites gaining traction as an alternative to traditional materials, ARC is well-positioned to capitalize on the growing demand in industrial and infrastructure projects.

The company is led by Mr. Manish Bajoria (Promoter and Managing Director) with over 16 years of experience, and Ms. Neelam Bajoria (Promoter and Executive Director) with more than 15 years of experience. Their leadership and management expertise have been pivotal in expanding the company’s operations and strengthening its strategic direction.

Financial Performance

ARC Insulation has demonstrated consistent financial growth:

• Revenue from operations stood at ₹3,315.32 lakh in FY2025, compared to ₹2,883.37 lakh in FY2024 and ₹2,448.01 lakh in FY2023.

• EBITDA rose to ₹1,293.98 lakh in FY2025, from ₹943.13 lakh in FY2024 and ₹478.69 lakh in FY2023.

• Profit After Tax (PAT) jumped to ₹856.58 lakh in FY2025, up from ₹610.40 lakh in FY2024 and ₹263.81 lakh in FY2023.

The company’s pre-issue EPS for FY2024 is ₹12.15, while the post-issue EPS is ₹8.32. The pre-issue P/E ratio stands at 10.28x, while the post-issue P/E ratio is 15.03x. Additionally, the company’s ROCE is 49.84%, ROE is 45.47%, and RoNW is 45.47%, all of which indicate strong profitability and efficient capital utilisation.

IPO Objectives

The proceeds from the IPO will be used for:

1. ₹815.67 lakh for Capital Expenditure towards setting up a new manufacturing unit.

2. ₹305.64 lakh for Purchase of New Office Space.

3. ₹118.30 lakh for Repayment or Prepayment of Certain Debt Facilities.

4. ₹1,634.61 lakh for Working Capital Requirements.

5. General Corporate Purposes to strengthen the company’s long-term business operations.

Allotment and How to Check Status

The allotment date is scheduled for 26 August 2025. Investors can check their allotment status online on the registrar’s website by entering their application number, PAN, or DP Client ID. Once the allotment is finalised, refunds (if any) will be initiated, and shares will be credited to demat accounts before the tentative listing date on 29 August 2025.

Investment Outlook and Review

Given the steady financial performance, strong profitability metrics, and expansion plans, the IPO appears fairly priced. The participation of anchor investors at the upper band and positive subscription demand further enhance investor confidence.

However, the high minimum investment size of ₹2,50,000 may restrict participation from small retail investors. Additionally, since the IPO is listed on the NSE SME platform, liquidity may be comparatively lower than mainboard IPOs.

Considering the GMP trend at ₹20 and the company’s robust fundamentals, the IPO is likely to offer moderate listing gains of around 16 percent. Analysts suggest that risk-tolerant investors may apply for short-term listing gains, while long-term investors may benefit from the company’s expansion into new manufacturing and office facilities.

In conclusion, ARC Insulation and Insulators Limited IPO presents a mix of growth opportunities, fair valuations, and potential listing gains. Investors should carefully assess their risk appetite and investment horizon before applying.

The Upcoming IPOs in this week and coming weeks are Anlon Healthcare, NIS Management, Sattva Engineering Construction, Globtier Infotech, Current Infraprojects, Anondita Medicare, Classic Electrodes (India), Vikran Engineering, Shivashrit Foods.

The Current active IPO are ARC Insulation & Insulators, Mangal Electrical Industries, LGT Business Connextions, Vikram Solar, Gem Aromatics, Shreeji Shipping Global, Patel Retail.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.