Parmeshwar Metal IPO Overview: A Copper Wire Manufacturer on the Rise

Parmeshwar Metal Limited is set to raise ₹24.74 crores through its Book Built Issue of 40.56 lakh equity shares, entirely as a Fresh Issue. The subscription window for this IPO opens on January 2, 2025, and closes on January 6, 2025. The allotment is expected to be finalized on January 7, 2025, and the shares will list on the BSE SME platform on January 9, 2025.

The IPO has been priced at ₹61 per equity share, with a market capitalization of ₹93.36 crores at the issue price. The lot size is set at 2,000 shares, requiring a minimum investment of ₹1,22,000 for retail investors and ₹2,44,000 for High Net-Worth Individuals (HNIs). Parmeshwar Metal manufactures copper wire and copper wire rods by recycling copper scrap, serving industries such as power cables, building wires, automotive, transformers, and more.

IPO Subscription and Grey Market Premium

As of January 6, 2025, the Parmeshwar Metal IPO has been subscribed 564.04 times, a clear indication of high investor demand. The Grey Market Premium (GMP) for the IPO is reported at ₹33, suggesting a listing gain of 54.64% based on the company’s financial performance. While GMP signals a strong potential for quick gains, it’s important to remember that the Grey Market Premium is speculative and not officially recognized by exchanges.

Financial Performance and Key Metrics

Parmeshwar Metal has shown solid financial growth, with revenues for the fiscal year 2024 amounting to ₹1,10,246.35 lakh, an increase from ₹97,270.62 lakh in 2023. The EBITDA for 2024 stands at ₹1,335.83 lakh, with a Profit After Tax (PAT) of ₹721.93 lakh. The company’s pre-issue EPS is ₹6.42, while the post-issue EPS is ₹4.72, indicating moderate dilution after the IPO.

The P/E ratio for Parmeshwar Metal is 9.50x pre-issue and 12.93x post-issue, compared to an industry average of 19x, which suggests the IPO is fairly priced. The company boasts a Return on Capital Employed (ROCE) of 17.51% and a Return on Equity (ROE) of 21.49%, underscoring its profitability and efficient use of capital.

Objectives of the IPO

The funds raised through the Parmeshwar Metal IPO will be utilized for the following purposes:

1. ₹218.08 lakh for setting up a new manufacturing facility in Gandhinagar, Gujarat for producing bunched copper wire.
2. ₹186.67 lakh for renovating the company’s furnaces as part of its capital expenditure.
3. ₹1,392.17 lakh for meeting working capital requirements, ensuring the smooth functioning of operations.
4. Remaining funds will be used for general corporate purposes.

Conclusion and Recommendations

The Parmeshwar Metal IPO is a promising opportunity, especially for those interested in the metal industry and the copper wire manufacturing sector. With a strong subscription rate and a high GMP, the IPO shows potential for short-term listing gains and long-term growth. The company's solid financials, including consistent revenue growth, healthy margins, and efficiency ratios, suggest it is well-positioned for sustained success.

Given the 54.64% listing gain potential indicated by the GMP, this IPO is recommended for investors looking for listing gains, as well as those seeking a stake in a growing and profitable business. For more IPO news and investment insights, explore our IPO List 2024 for the latest offerings and Top News Headlines.

The Upcoming IPOs in this week and coming weeks are Sat Kartar Shopping,Barflex Polyfilms.

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