Classic Electrodes (India) Limited, a leading manufacturer of welding electrodes and engineering solutions, has launched its Initial Public Offering (IPO) today, August 22, 2025. The company is raising ₹41.51 crore through a 100% fresh issue of 47.71 lakh shares. The IPO will remain open until August 26, 2025, with the allotment date set for August 28 and the tentative listing on NSE SME scheduled for September 1, 2025.

The price band of the Classic Electrodes IPO is ₹82 to ₹87 per share, with a lot size of 1,600 shares. Retail investors are required to invest in a minimum of 2 lots (3,200 shares), amounting to ₹2,78,400. The company’s post-issue market capitalisation at the upper price band is expected to be around ₹156.30 crore.

About the Company

Classic Electrodes (India), established 27 years ago, has built a strong position in the domestic and international welding solutions industry. The company offers a wide range of welding electrodes such as:

• General Purpose Electrodes

• Low Alloy Electrodes

• Low Hydrogen Electrodes

• Stainless Steel Electrodes

• Hard Facing Electrodes

• Cast Iron Electrodes

• Non-Ferrous Electrodes

• Low Heat Input Electrodes

• Cutting and Gauging Electrodes

• Mig Wires

These products cater to multiple industries including infrastructure, manufacturing, engineering, heavy industries, and fabrication.

The company is spearheaded by its promoters — Hanuman Prasad Agarwal, with over 26 years of experience, Sushil Kumar Agarwal, with similar professional expertise, Nitesh Agarwal who oversees Kolkata operations and marketing, Sunil Kumar Mittal, Ayush Agarwal managing Haryana operations, and Naresh Kumar Agarwal. Their combined leadership experience has been instrumental in Classic Electrodes’ sustained growth.

Financial Performance

The financials of Classic Electrodes indicate steady progress. The revenues from operations stood at:

• ₹18,789.56 lakh (Feb 28, 2025, period ended)

• ₹19,440.73 lakh (FY24)

• ₹15,112.69 lakh (FY23)

• ₹13,436.80 lakh (FY22)

The EBITDA figures reflect strong operating performance:

• ₹1,962.81 lakh (FY25 till Feb)

• ₹2,321.76 lakh (FY24)

• ₹872.73 lakh (FY23)

• ₹633.49 lakh (FY22)

The Profit After Tax (PAT) has also grown significantly:

• ₹957.31 lakh (FY25 till Feb)

• ₹1,229.79 lakh (FY24)

• ₹208.48 lakh (FY23)

• ₹149.31 lakh (FY22)

This shows a consistent uptrend in profitability over the last three years.

Key ratios include:

• Pre-issue EPS (FY24): ₹7.92

• Post-issue EPS (FY24): ₹5.81

• Pre-issue P/E ratio: 10.98x

• Post-issue P/E ratio: 14.97x

• Industry P/E ratio: 35x

• ROCE (FY24): 25.78%

• ROE (FY24): 44.11%

• RoNW (FY24): 36.14%

These strong metrics indicate that the IPO is reasonably priced compared to peers.

IPO Subscription Status

On Day 1 (as of 12:00 PM, August 22, 2025), the Classic Electrodes IPO has been subscribed 0.56 times. Retail investors, High Net-worth Individuals (HNIs), and Qualified Institutional Buyers (QIBs) are expected to contribute more strongly over the next few days of the subscription window.

Anchor Investors

Before the IPO launch, Classic Electrodes raised ₹11.70 crore from anchor investors at the upper price band of ₹87 per share. A total of 13,45,600 equity shares were allocated to anchor investors. This reflects market confidence in the company’s fundamentals and growth potential.

Grey Market Premium (GMP)

The Classic Electrodes IPO is trading at a Grey Market Premium (GMP) of ₹18. This suggests an expected listing gain of around 20.68% over the IPO price. However, experts caution that GMP is not an official indicator of listing performance, as it depends purely on demand and supply in the unregulated market.

Strengths of the IPO

• Diverse product portfolio catering to multiple industries.

• Strong domestic and international presence.

• Consistent financial growth with improving profit margins.

• Experienced promoters and management team.

• Reasonable valuation compared to industry P/E.

Risks and Considerations

• High dependency on the welding electrode industry cycle.

• Significant minimum investment requirement (₹2.78 lakh) may limit retail participation.

• Competitive market with presence of established players.

Expert Recommendation

Based on financials, valuations, and GMP, analysts suggest that risk-taking investors may consider applying for listing gains. However, conservative investors should evaluate carefully as SME IPOs carry higher risk and volatility compared to mainboard issues.

Conclusion

The Classic Electrodes (India) IPO represents an opportunity for investors looking to gain exposure to a niche manufacturing sector with growth potential. With strong fundamentals, improving profitability, and a decent GMP, the IPO looks promising for short-term listing gains as well as long-term investors with high-risk appetite.

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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