Parmeshwar Metal IPO Listing: Stock lists at 38% premium on BSE SME

Parmeshwar Metal IPO Listing

Parmeshwar Metal IPO Listing: ₹61 Share Delivers 38% Listing Gain—What You Need to Know Before Booking Profit

The Parmeshwar Metal IPO made a spectacular debut today, delivering a solid listing gain for investors who subscribed to the offer at an issue price of ₹61 per share.

The shares listed on the BSE SME platform at ₹84.50, marking an immediate 38.52% gain over the issue price.

Despite some initial fluctuations, including a dip to ₹81.05, the stock quickly recovered and hit the upper circuit limit of ₹88.72, closing at this price at the end of the first trading session.

This resulted in a 45.44% profit for investors on the listing day, sparking discussions on whether to book profits or hold for potential long-term gains.

If you’re an investor in Parmeshwar Metal, this might be the ideal time to evaluate whether to lock in your gains or stay invested for potential growth.

To make an informed decision, let’s explore the key details of the IPO, the company’s financial health, its business prospects, and the implications of this strong listing performance.

Parmeshwar Metal IPO Details: A Strong Start

Parmeshwar Metal launched its Initial Public Offering (IPO) to raise ₹24.74 crore by issuing 40.56 lakh new equity shares with a face value of ₹10 each.

The offer was open for subscription from January 2 to January 6, 2025, and received an overwhelming response from investors.

The IPO was oversubscribed by 607.07 times, with particular enthusiasm from non-institutional investors and retail investors. Here’s a breakdown of the subscriptions:

• Qualified Institutional Buyers (QIBs): Subscribed 177.32 times
• Non-Institutional Investors (NIIs): Subscribed 1,202.83 times
• Retail Investors: Subscribed 597.09 times

This high level of demand speaks volumes about investor confidence in Parmeshwar Metal’s business model and growth prospects.

The funds raised through the IPO will primarily be used for expanding manufacturing capacity, renovating the copper melting furnace, meeting working capital requirements, and covering general corporate purposes.

How Did Parmeshwar Metal Perform on Listing Day?

The stock of Parmeshwar Metal made a strong entry on the BSE SME platform, listing at ₹84.50, which was 38.52% higher than the issue price of ₹61.

While the price saw some intraday volatility and briefly dipped to ₹81.05, the stock quickly regained its momentum, reaching the upper circuit level of ₹88.72 by the market’s close.

This marked a 45.44% listing gain for IPO investors. The upper circuit level represents a limit on the maximum price increase that can occur in a single trading session, indicating robust market demand and investor confidence.

Business Profile: Who is Parmeshwar Metal?

Parmeshwar Metal, established in August 2016, specializes in the manufacturing of copper wires and rods.

The company primarily sources copper scrap and processes it into copper products that are used across several industries. Some of the key applications of its products include:

• Power cables
• Building wires
• Transformers
• Automotive industry
• Household cables

The company’s manufacturing facility is located in Dehgam, Gujarat, a strategic location for sourcing raw materials and distributing finished products to various industries.

Parmeshwar Metal has steadily built a reputation for delivering high-quality copper products and has built a loyal customer base across multiple sectors.

Financial Health and Growth

Parmeshwar Metal’s financial performance over the years reflects a stable and growing business. Here’s a look at its key financials:

• FY 2022: Net profit of ₹6.85 crore
• FY 2023: Net profit of ₹8.90 crore
• FY 2024: Net profit of ₹7.22 crore

In addition to this, the company’s revenue has grown at a CAGR of over 22%, reaching ₹1,102.46 crore in FY 2024.

This demonstrates the company’s ability to scale operations and expand its market reach. For the first half of FY 2024-25, Parmeshwar Metal reported strong numbers, with:

• Net profit of ₹5.70 crore
• Revenue of ₹757.31 crore

This performance highlights the company’s ability to generate steady profits and grow revenue in a competitive and often volatile industry.

It is also indicative of its strong business fundamentals and operational efficiency.

Key Factors Driving Parmeshwar Metal’s Growth

Parmeshwar Metal operates in the copper manufacturing sector, which is heavily tied to global industrial growth, infrastructure development, and the ongoing trend of electrification. Some of the key factors contributing to the company’s growth are:

1. Expanding Market for Copper Products: Copper is a critical component in several high-demand sectors, including power cables, electronics, and automobiles. The global push toward renewable energy and electric vehicles is expected to increase demand for copper-based products, positioning Parmeshwar Metal to benefit from these trends.
2. Manufacturing Expansion: The company is utilizing the proceeds from its IPO to establish a new manufacturing facility in Dehgam, which will increase its production capacity and enable it to cater to a growing market.
3. Efficient Operations: Parmeshwar Metal’s ability to source copper scrap efficiently and convert it into high-quality products gives it a competitive edge in terms of cost control and operational efficiency.

What to Consider Before Booking Profits

While the 45.44% gain on listing is certainly tempting, investors should carefully evaluate the prospects of holding Parmeshwar Metal stock for the long term. Here are a few factors to consider:

1. Strong Business Fundamentals: Parmeshwar Metal has demonstrated consistent growth in both revenue and profits, underpinned by a solid business model and a growing demand for copper-based products. The expansion plans and improvements in manufacturing capacity further enhance its long-term growth potential.
2. Sectoral Growth Outlook: As copper demand grows across key sectors like renewable energy, power transmission, and automotive manufacturing, Parmeshwar Metal is well-positioned to capture a larger share of the market. This growth trajectory, combined with the company’s ongoing operational improvements, could result in continued financial gains.
3. Volatility and Market Sentiment: The stock’s price showed some volatility on its listing day, dipping and then recovering. While this could be typical for an SME-listed company, it’s crucial to monitor market sentiment and broader macroeconomic conditions, which can influence short-term stock price movements.
4. Valuation: While Parmeshwar Metal’s listing performance is strong, it is essential to assess the stock’s valuation. For long-term investors, the stock price should ideally reflect the company’s growth prospects, profitability, and industry position. Conducting a thorough valuation analysis (e.g., price-to-earnings ratio) will help determine whether the stock is still attractive at current levels.

Final Remarks: To Book Profit or Not?

Parmeshwar Metal’s 38% listing gain and subsequent 45.44% profit on the first day of trading are certainly impressive.

However, deciding whether to book profits or stay invested depends on your individual investment strategy and risk tolerance.

If you believe in the company’s long-term potential and want to capitalize on its growth trajectory, holding the stock might be a good decision.

However, if you are risk-averse or looking to lock in profits quickly, booking profits could be a sensible move.

Ultimately, investors should assess Parmeshwar Metal’s performance, growth potential, and market conditions before making any decision.

Whether you decide to stay invested or exit the stock, it is always advisable to consult a financial advisor and do your due diligence to make the best decision based on your financial goals.