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Parmeshwar Metal IPO: Allotment Finalised, Listing Tomorrow; GMP how to check allotment status
Team Finance Saathi
08/Jan/2025
What's covered under the Article:
- Parmeshwar Metal IPO opens at ₹61 per share with a remarkable Grey Market Premium of ₹33, suggesting 54.64% gain.
- Subscription status shows a massive 564.04 times oversubscription, indicating high demand.
- Parmeshwar Metal IPO’s objectives include funding new manufacturing facilities and working capital.
Parmeshwar Metal Limited IPO is scheduled to open on January 02, 2025, with a fixed price issue of ₹24.74 Crores, consisting entirely of a Fresh Issue of 40.56 lakh shares priced at ₹61 per equity share. This results in a market capitalization of ₹93.36 Crores at the IPO price.
The company is engaged in the manufacturing of copper wire and copper wire rods by recycling copper scrap. Their products find application in power cables, building wires, transformers, the automotive industry, household cables, and both bare and enamelled wires. As part of India’s growing metal recycling and manufacturing sector, Parmeshwar Metal is positioned in a market with substantial demand for sustainable copper products.
Grey Market Premium and Subscription Trends:
The Grey Market Premium (GMP) for the Parmeshwar Metal IPO is expected to be ₹33, indicating a potential listing gain of 54.64%. This marks a strong market interest, and while GMP is not a reliable indicator, it suggests the possibility of good initial returns for investors. As of January 6, 2025, the IPO was 564.04 times oversubscribed, showcasing robust demand across retail investors and high-net-worth individuals.
IPO Allotment Process:
The allotment date for the Parmeshwar Metal IPO is set for January 07, 2025. Investors can check the allotment status on the registrar's website by entering their application number, PAN, or DP Client ID. This is a simple process to determine whether you’ve been allotted shares.
Objectives of the IPO:
The proceeds from the Parmeshwar Metal IPO will be utilized for various purposes:
- ₹218.08 lakh will be used to set up a new manufacturing facility at Gandhinagar, Gujarat, for the production of bunched copper wire and 1.6 MM copper wire.
- ₹186.67 lakh will be allocated to renovate the furnaces used in manufacturing processes.
- ₹1,392.17 lakh will be directed towards meeting the company's working capital needs.
- A portion of the funds will also be used for general corporate purposes.
Financial Performance and Valuation Metrics:
The company’s financial performance indicates strong growth. For the period ending October 31, 2024, Parmeshwar Metal reported revenues of ₹75,730.83 lakh, ₹1,335.83 lakh in EBITDA, and ₹570.29 lakh in PAT. The financial figures for the past fiscal years also show steady growth, with revenue and profits increasing year on year.
Key metrics include a pre-issue EPS of ₹6.42 and a post-issue EPS of ₹4.72 for FY24. The pre-issue P/E ratio stands at 9.50x, and the post-issue P/E ratio is 12.93x, both significantly lower than the industry’s average P/E ratio of 19x, suggesting the IPO is fairly priced.
The Return on Capital Employed (ROCE) for FY24 stands at 17.51%, with a Return on Equity (ROE) of 21.49%, indicating that the company is generating strong returns on its investments and equity. The Return on Net Worth (RoNW) is 19.40%, reinforcing the company’s healthy profitability metrics.
IPO Investment Recommendation:
Given the strong financial performance, 54.64% GMP, and high subscription numbers, Parmeshwar Metal IPO is positioned as a promising investment for listing gains. Investors looking for a sustainable investment with exposure to the copper wire and recycling industry may also find long-term value in the company’s growth trajectory.
We recommend applying for the Parmeshwar Metal IPO to capitalize on potential listing gains, keeping in mind the company’s solid market fundamentals and valuation metrics.
The Upcoming IPOs in this week and coming weeks are Sat Kartar Shopping,Barflex Polyfilms.