Parmeshwar Metal Limited, a leader in the manufacturing of copper wire and copper wire rods by recycling copper scrap, is set to launch an IPO raising ₹24.74 crores through a fresh issue of 40.56 lakh shares. The IPO opens on January 2, 2025, and closes on January 6, 2025. The shares are priced at ₹61 per equity share, giving the company a market capitalization of ₹93.36 crores. The Grey Market Premium (GMP) for the IPO is ₹18, indicating an expected listing gain of 29.51%. The shares are expected to be listed on the BSE SME on January 9, 2025.

IPO Price, Subscription, and Allotment

The price band for the Parmeshwar Metal IPO is set at ₹61 per share, with a lot size of 2,000 shares. Retail investors must invest a minimum of ₹1,22,000, while High-Net-Worth Individuals (HNIs) need to invest in two lots, amounting to ₹2,44,000. As of January 3, 2025, the IPO has been subscribed 21.82 times, showcasing significant investor interest. The allotment date for the IPO is January 7, 2025, and investors can check the allotment status on the registrar's website.

Business Overview

Parmeshwar Metal is engaged in the recycling of copper scrap to manufacture copper wire and copper wire rods. These products have extensive applications in industries such as power cables, building wires, transformers, the automotive industry, and household cables. The company’s business model benefits from a growing demand for copper-based products due to the expansion of electrical and automotive sectors.

Financial Performance and Valuation

The revenue from operations for Parmeshwar Metal has been steadily increasing, positioning the company for sustainable growth in the copper manufacturing industry. The pre-issue EPS stands at ₹6.10, with a post-issue EPS of ₹4.79. The pre-issue P/E ratio is 10x, which indicates an attractive valuation when compared to its industry peers. The company's ROCE for the last fiscal year is 36.54%, with a ROE of 30.89%, demonstrating strong returns on capital invested.

Grey Market Premium (GMP)

The Grey Market Premium (GMP) for Parmeshwar Metal is ₹18, reflecting a potential listing gain of 29.51%. This suggests that the IPO is in strong demand in the grey market, and there is positive sentiment surrounding the stock's future performance. However, investors should be cautious as GMP is an unofficial market indicator and does not guarantee actual listing gains.

Objectives of Parmeshwar Metal Limited IPO

Parmeshwar Metal intends to utilize the net proceeds from the IPO for the following purposes:

1. ₹218.08 Lakh to set up a new manufacturing facility in Gandhinagar, Dehgam, Gujarat for producing bunched copper wire and 1.6 MM copper wire.
2. ₹186.67 Lakh for capital expenditure related to furnace renovation.
3. ₹1,392.17 Lakh to meet working capital requirements.
4. For general corporate purposes.

Should You Invest in Parmeshwar Metal IPO?

The Parmeshwar Metal IPO appears to be an attractive investment opportunity, especially for those looking to invest in the copper manufacturing and recycling sectors. The company’s strong financial performance, coupled with its focus on expanding its manufacturing capacity, makes it a potentially profitable investment in the long term.

Given the GMP of ₹18 and the attractive valuation, the IPO is poised to offer substantial listing gains. If you are looking for short-term gains, the IPO seems to present a good opportunity. However, long-term investors can also benefit from the company’s solid financial metrics and growth strategy.

The Upcoming IPOs in this week and coming weeks are Indobell Insulation, Standard Glass Lining, Quadrant Future, Capital Infra Trust, Delta Autocorp, B R Goyal.

The Current active IPO is   Fabtech Technologies, Leo Dry Fruits, Davin Sons, and Parmeshwar Metal.

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