Parmeshwar Metal Limited is a prominent SME in India’s manufacturing sector, specializing in the production of copper wires and rods through the recycling of copper scrap. Established under the provisions of the Companies Act, 2013, the organization has carved a niche for itself by offering products tailored to a variety of applications such as power cables, building wires, transformers, and household cables. With sustainability and innovation as its cornerstones, Parmeshwar Metal Limited is poised for significant growth in the coming years.
The company’s upcoming IPO has captured the attention of investors and market analysts alike. The strong Grey Market Premium (GMP) and the company’s ambitious plans for expansion make this IPO a critical event in its financial journey.
Grey Market Premium (GMP) Performance
The GMP for Parmeshwar Metal Limited IPO is a staggering 32.72% over the cap price of Rs 61. This translates to an expected listing price of Rs 81, indicating strong demand and optimism in the unlisted market. GMP serves as a barometer for investor sentiment, and such a premium underscores the confidence in Parmeshwar Metal Limited’s growth prospects. The strong GMP signals a potential upside for early investors, aligning with the broader market interest in the IPO.
IPO Details
The IPO, which opened for bidding on 2nd January 2025, is set to close on 6th January 2025. It comprises a fresh issue of 40.56 lakh shares, amounting to a total size of Rs 24.74 crore. The price band for the offer is set at Rs 57 to Rs 61, and the face value of each share is Rs 10.
Key Dates:
- Opening Date: 2nd January 2025
- Closing Date: 6th January 2025
- Basis of Allotment: On or before 7th January 2025
- Refund Initiation and Credit of Shares: On or before 8th January 2025
- Listing Date: 9th January 2025
Investment Details:
- Retail Segment: Minimum lot size is 2000 shares, requiring an investment of Rs 1,22,000.
- HNI Segment: Minimum lot size is 4000 shares, requiring an investment of Rs 2,44,000.
Objectives of the IPO
Parmeshwar Metal Limited plans to utilize the IPO proceeds for:
- Setting up a manufacturing facility in Gandhinagar, Gujarat, to produce bunched copper wire and 1.6 MM copper wire.
- Capital expenditure for furnace renovation.
- Addressing working capital requirements to sustain and expand operations.
- General corporate purposes aimed at enhancing operational capabilities and market presence.
About Parmeshwar Metal Limited
Founded under the Companies Act, 2013, Parmeshwar Metal Limited is engaged in the production of copper wires and rods. The company employs a sustainable approach by using copper scrap as its primary raw material. This aligns with global trends toward recycling and sustainability, making Parmeshwar Metal Limited a relevant player in today’s environmentally conscious market.
Product Portfolio:
- 1.6 MM Copper Wires
- 8 MM Copper Rods
- 12.5 MM Copper Rods
These products are customized to meet the specific needs of clients across sectors, including power cables, transformers, and household wiring. The company’s plans to expand its manufacturing capabilities through the IPO proceeds reflect its commitment to innovation and customer satisfaction.
Financial Overview
Parmeshwar Metal Limited has demonstrated consistent growth, as evidenced by its financial performance over the years. Below is a detailed analysis of its financial trajectory:
| Year Ended | Sept. 2024 (in cr.) | March 2024 (in cr.) | March 2023 (in cr.) | March 2022 (in cr.) | March 2021 (in cr.) |
|---|---|---|---|---|---|
| Assets | 1,130 | 979 | 801 | 482 | 244 |
| Borrowings | 469 | 1,036 | 676 | 446 | 240 |
| Revenue | – | 1,024 | 644 | 230 | 102 |
| Net Profit | – | 162 | 110 | 43 | 22 |
| Cash Flow | – | 118 | 27 | 4 | 11 |
Key Highlights:
- Assets: The company’s total assets have grown substantially, reaching Rs 1,130 crore as of September 2024, up from Rs 244 crore in March 2021.
- Revenue Growth: Revenue for the year ended March 2024 was Rs 1,024 crore, reflecting a strong upward trajectory.
- Net Profit: The net profit for March 2024 stood at Rs 162 crore, showcasing consistent profitability over the years.
- Cash Flow: Improved cash flow of Rs 118 crore in March 2024 demonstrates efficient financial management.
Recent Developments and Growth Indicators
- Expansion Plans: The establishment of a new manufacturing facility in Gandhinagar, Gujarat, will significantly enhance the company’s production capacity.
- Sustainability Focus: Recycling copper scrap as a raw material aligns the company with global sustainability goals, reducing environmental impact.
- Strong Demand: The growing demand for copper products in power, construction, and electrical sectors positions Parmeshwar Metal Limited for long-term growth.
Sectoral Analysis
The copper industry plays a crucial role in various sectors, including:
- Power Generation: Copper’s excellent conductivity makes it essential for power cables and transformers.
- Construction: Rising infrastructure projects drive the demand for building wires and cables.
- Renewable Energy: The transition to renewable energy sources increases the need for efficient wiring solutions.
Technical Analysis
Technical analysis of Parmeshwar Metal Limited’s stock performance offers insights into its market dynamics:
- Support Levels: Rs 525 and Rs 500 are strong support levels, providing stability.
- Resistance Levels: Rs 600 and Rs 630 are key resistance points, indicating potential upside.
- Moving Averages: The stock’s 50-day and 200-day moving averages suggest a neutral to bullish trend.
- Relative Strength Index (RSI): RSI readings indicate that the stock is neither overbought nor oversold, making it a stable investment.
Risk Factors
While the IPO appears promising, investors should consider potential risks:
- Market Volatility: Fluctuations in stock prices could affect returns.
- Execution Challenges: Delays in setting up the new facility or furnace renovation may impact growth plans.
- Regulatory Changes: Adhering to evolving regulations in the copper industry requires continuous investment.
Long-Term Prospects
The company’s strategic initiatives and sectoral tailwinds position it well for sustained growth. Analysts predict that the stock could reach Rs 120 in the medium term, driven by strong fundamentals and market demand.
Conclusion
Parmeshwar Metal Limited’s IPO is a significant event in the company’s growth story. The strong GMP, robust financials, and strategic use of IPO proceeds indicate promising returns for investors. With its focus on sustainability, innovation, and expansion, Parmeshwar Metal Limited is poised to play a crucial role in India’s industrial growth.
Investors looking for opportunities in the SME space may find this IPO appealing, provided they conduct thorough due diligence and assess market conditions. As India continues to prioritize infrastructure and renewable energy, Parmeshwar Metal Limited is well-positioned to capitalize on these trends and deliver substantial value to its stakeholders.
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