Jainik Power Cables Limited, an aluminium wire rod manufacturer based in India, has launched its Initial Public Offering (IPO), which opened for subscription on June 10, 2025, and will close on June 12, 2025.

The IPO is a Book Built Issue of ₹51.30 crores, consisting solely of a fresh issue of 46.63 lakh equity shares. The price band for the offer has been fixed at ₹100 to ₹110 per share. The lot size is 1,200 shares.

Retail investors must invest a minimum of ₹1,32,000, while High-Net-Worth Individuals (HNIs) must apply for a minimum of 2 lots, which is ₹2,64,000.

The market capitalisation of Jainik Power Cables Limited at the upper price band of ₹110 per share will stand at ₹157.82 crores. The allotment is expected on June 13, 2025, with the tentative listing date on the NSE SME platform scheduled for June 17, 2025.

The IPO is managed by Fast Track Finsec Private Limited, with Skyline Financial Services Private Limited as the registrar, and Rikhav Securities Limited acting as the market maker.

About the Company

Jainik Power Cables Limited began manufacturing aluminium wire rods in 2023, though it has been in the metal industry for over a decade via aluminium rod trading.

The company focuses on quality manufacturing practices and is certified in Environmental, Health, and Safety (EHS) protocols, as evidenced by its ISO certifications.

Jainik is led by its Managing Director Mr. Shashank Jain and Director Mr. Prateek Jain, who collectively bring 32 years of experience in the metal industry. They oversee vital aspects such as business expansion, finance, plant operations, and marketing.

Financial Performance

The company has shown strong revenue growth over the last four financial years:

• Revenue from Operations:

  • FY22: ₹6,421.32 lakh

  • FY23: ₹6,748.72 lakh

  • FY24: ₹33,923.17 lakh

  • FY25 (provisional): ₹35,237.96 lakh

• EBITDA:

  • FY22: ₹131.64 lakh

  • FY23: ₹145.97 lakh

  • FY24: ₹872.46 lakh

  • FY25 (provisional): ₹1,468.95 lakh

• Profit After Tax (PAT):

  • FY22: ₹6.40 lakh

  • FY23: ₹14.66 lakh

  • FY24: ₹501.86 lakh

  • FY25 (provisional): ₹923.60 lakh

These figures indicate aggressive growth, especially between FY23 and FY24, possibly due to the commencement of in-house manufacturing.

Valuation and Ratios

Key performance metrics for the IPO include:

• Pre-Issue EPS (FY24): ₹9.99

• Post-Issue EPS (FY24): ₹6.44

• Pre-Issue P/E Ratio: 11.01x

• Post-Issue P/E Ratio: 17.09x

• Industry P/E Ratio: 8.00x

• ROCE (FY24): 55.92%

• ROE / RoNW (FY24): 56.92%

Although the return ratios appear impressive, the post-issue P/E ratio of 17.09x is significantly higher than the industry average, suggesting that the IPO is fully priced or even overvalued.

Grey Market Premium (GMP)

Currently, the Grey Market Premium (GMP) for Jainik Power Cables IPO is reported to be ₹0. There is no active trading in the grey market, indicating lack of speculative interest or uncertainty among informal market participants.

The GMP being zero suggests no expected listing gain as per current demand-supply sentiment in the unregulated market.

Risk Factors

Some of the risks that potential investors should consider:

• High valuation against peers: With a post-issue P/E ratio significantly above the industry benchmark, the issue seems overvalued

• Recent entry into manufacturing: The company only started manufacturing aluminium rods in 2023, limiting historical performance data in that segment

• No confirmed GMP support: A zero GMP suggests that the IPO might not attract strong listing-day momentum

• Highly capital-intensive sector: The metals and cables industry is sensitive to raw material price fluctuations and power costs

Analyst Recommendation

Despite Jainik Power Cables showcasing strong revenue growth and high profitability, the valuation metrics raise concerns. The post-issue P/E of 17.09x compared to an industry average of 8.00x implies that the stock is fully priced with little room for upside on listing day.

Additionally, the absence of a positive GMP and new entry into manufacturing creates further uncertainty.

Hence, analysts recommend investors to AVOID subscribing to the IPO for listing gains. Those interested in the long-term story should wait for stability in listed performance and further clarity on scalability and order books.

Conclusion

Jainik Power Cables Limited, while showing financial expansion and operational transition, appears to be overvalued at current IPO pricing. The zero GMP and high post-issue valuation do not justify investment solely for listing benefit.

Investors with low-risk tolerance should stay away, and those looking for long-term investment should wait for post-listing clarity

Disclaimer

This article is for educational and informational purposes only and does not constitute financial advice. Investment decisions should be based on individual risk tolerance and consultation with SEBI-registered advisors. Market conditions are volatile and subject to change. Neither the author nor the platform is responsible for losses arising from use of this information.

The Upcoming IPOs in this week and coming weeks are Safe Enterprises Retail Fixtures, Globe Civil Projects, Sambhav Steel Tubes, Ellenbarrie Indutrial Gases, Kalpataru, HDB Financials, AJC Jewel, ArisInfra Solutions, Influx Healthtech, Mayasheel Ventures, Eppeltone Engineers.

The Current active IPO are Oswal Pumps, Patil Automation, Samay Projects Services, Aten Papers, Monolithisch India.

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