Classic Electrodes (India) Limited, a well-established company in the welding electrodes manufacturing industry, has launched its Initial Public Offering (IPO) worth ₹41.51 crore. The company, headquartered in India, has been in existence for 27 years, providing welding electrodes and engineering solutions to both domestic and international clients. Its wide range of products includes 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, and Mig Wires. This comprehensive product portfolio allows Classic Electrodes to serve multiple industries across construction, manufacturing, and infrastructure sectors.

The IPO is a book built issue, consisting entirely of a fresh issue of 47.71 lakh shares, aggregating to ₹41.51 crore. The subscription window opened on 22nd August 2025 and will close on 26th August 2025. The allotment of shares is expected to be finalised on or around 28th August 2025, with a tentative listing date on the NSE SME platform scheduled for 1st September 2025.

The price band for the issue has been set at ₹82 to ₹87 per equity share. At the upper end of the price band, the market capitalisation of Classic Electrodes is expected to be ₹156.30 crore. The lot size is 1,600 shares, and retail investors are required to apply for at least two lots (3,200 shares), which requires a minimum investment of ₹2,78,400.

GYR Capital Advisors Private Limited is acting as the book running lead manager for the issue, MUFG Intime India Private Limited (formerly Link Intime India Private Limited) is the registrar, while Winance Financial Services Private Limited and Giriraj Stock Broking Private Limited are the market makers.

Classic Electrodes India IPO Anchor Investors

Ahead of the IPO opening, Classic Electrodes successfully raised ₹11.70 crore from anchor investors at a price of ₹87 per share. The company allocated 13,45,600 equity shares to anchor investors, demonstrating early confidence in the company’s fundamentals. Anchor participation typically indicates strong institutional interest, which in turn boosts retail and non-institutional investor confidence.

Classic Electrodes India IPO Subscription Status

As of 12:00 PM on 25th August 2025, the IPO subscription status shows that the issue has been subscribed 5.54 times on its second day of the subscription period. Such strong subscription momentum indicates healthy demand from various investor categories including Qualified Institutional Buyers (QIBs), Non-Institutional Investors (NIIs), and Retail Individual Investors (RIIs).

Classic Electrodes India IPO Grey Market Premium (GMP)

The Grey Market Premium (GMP) of Classic Electrodes stands at ₹18, suggesting an expected listing price of ₹105 per share, which translates to a 20.68% premium over the issue price. While GMP is unofficial and operates outside regulated markets, it provides a broad sentiment of investor expectations regarding listing gains. However, investors should note that GMP trends can fluctuate rapidly depending on demand and supply in the grey market.

Objectives of the Classic Electrodes IPO

The company has outlined the utilisation of the net proceeds from the issue for the following objectives:

1. ₹147.49 lakh towards capital expenditure for the purchase of plant and machinery.

2. ₹1,000 lakh for repayment of a portion of outstanding borrowings.

3. ₹1,660 lakh for funding working capital requirements.

4. Remaining proceeds for general corporate purposes.

These objectives are aligned with the company’s expansion plans and financial strengthening strategies, ensuring better operational capacity and reduced debt burden.

Financial Performance of Classic Electrodes India

Classic Electrodes has demonstrated consistent financial growth in recent years.

• Revenue from operations: ₹18,789.56 lakh (Feb 2025), ₹19,440.73 lakh (FY24), ₹15,112.69 lakh (FY23), and ₹13,436.80 lakh (FY22).

• EBITDA: ₹1,962.81 lakh (FY25), ₹2,321.76 lakh (FY24), ₹872.73 lakh (FY23), and ₹633.49 lakh (FY22).

• Profit After Tax (PAT): ₹957.31 lakh (FY25), ₹1,229.79 lakh (FY24), ₹208.48 lakh (FY23), and ₹149.31 lakh (FY22).

These numbers highlight not only growth in revenue but also a sharp rise in profitability and efficiency, reflecting the company’s ability to optimise costs and expand operations effectively.

The pre-issue EPS stands at ₹7.92, while the post-issue EPS is projected at ₹5.81 for FY24. The pre-issue P/E ratio is 10.98x, and the post-issue P/E ratio is 14.97x, against the industry P/E ratio of around 35x, indicating that the IPO is fairly priced. Additionally, with a ROCE of 25.78%, ROE of 44.11%, and RoNW of 36.14%, the company’s return ratios remain robust and attractive for investors.

Management and Promoters

The company is backed by a strong leadership team with decades of industry experience. Key promoters include:

• Hanuman Prasad Agarwal with over 26 years of industry experience.

• Sushil Kumar Agarwal, also with more than 26 years of experience, playing a pivotal role in strategic growth.

• Nitesh Agarwal, with 6+ years of experience, managing Kolkata factory operations and marketing.

• Sunil Kumar Mittal, bringing over 26 years of professional expertise.

• Ayush Agarwal, with over 5 years of experience, overseeing Haryana factory operations.

• Naresh Kumar Agarwal, contributing significantly to the company’s expansion.

Their collective leadership and operational efficiency have enabled Classic Electrodes to maintain a reputation of trust, innovation, and reliability in the welding industry.

IPO Review and Recommendation

The Classic Electrodes India IPO combines strong financials, robust promoter experience, and promising growth prospects in both domestic and global markets. With a Grey Market Premium of ₹18 indicating 20.68% potential listing gains, the IPO is drawing strong interest from investors. The subscription status reinforces this optimism, as the issue has already been subscribed multiple times within two days.

Given the fair pricing of the IPO, the healthy financial growth, and the attractive GMP, we recommend that risk-taking investors apply for this IPO for potential listing gains. Long-term investors can also consider it as a viable addition to their portfolios, as the company operates in a niche industrial segment with consistent demand and a diversified customer base.

In conclusion, Classic Electrodes India IPO offers a compelling investment opportunity with the potential of short-term listing gains as well as long-term growth prospects. The strong fundamentals, combined with investor demand and positive grey market sentiment, make this IPO a noteworthy option in the NSE SME segment.

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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