Jain Resource Recycling's Rs 1,250 crore IPO opens for subscription; GMP at 11%. Should you apply?

Jain Resource Recycling opened its Rs 1,250 crore IPO for subscription on Wednesday. The issue, which comprises a fresh issue of Rs 500 crore and an offer-for-sale worth Rs 750 crore, will close on September 26. The price band has been fixed at Rs 220-232 per share, with a minimum lot size of 64 shares.

At the upper end of the band, the company will command a post-issue market capitalization of about Rs 8,006 crore. The grey market premium (GMP) for the issue stood at around 11%, indicating modest listing expectations.

About the company

Jain Resource Recycling, part of the Chennai-based Jain Metal Group, is a leading player in India’s non-ferrous recycling industry. The company processes copper, lead, and aluminium scrap through three facilities at Sipcot Industrial Estate, Gummidipoondi, Chennai, and exports over 60% of its products to more than 20 countries including China, Singapore, South Korea, UAE, Taiwan, and Japan.

Its products include lead ingots registered with the London Metal Exchange (LME), copper ingots, and aluminium alloys. The firm caters to industries such as automotive, electronics, and batteries, and counts Vedanta Sterlite Copper, Luminous Power Technologies, Mitsubishi Corporation Japan, and Nissan Trading among its clients.

In FY25, the company reported revenue of Rs 7,126 crore, a 61% jump from the previous year. Profit after tax rose to Rs 223 crore compared to Rs 164 crore in FY24, while EBITDA increased to Rs 369 crore.

Valuations and outlook

At the upper price band, the IPO is valued at 35.9x FY25 earnings, which analysts note is fully priced. The company’s forward integration into copper cathode and wire rod manufacturing, as well as expansion into niche recycling segments like solar panels and automotive tires, are seen as key growth drivers.

Brokerage view

Anand Rathi has recommended investors to "Subscribe-Long Term", citing the company’s strong global presence, consistent financial performance, and leadership in the domestic recycling sector.

"Leveraging its expertise in recycling, Jain Resource Recycling is well positioned to capture opportunities in green metals and new-age recycling domains. While valuations appear stretched, we believe the long-term prospects remain strong," the brokerage said in its note.

The IPO is managed by ICICI Securities, Motilal Oswal Investment Advisors, and PL Capital Markets, with KFin Technologies as registrar. Shares are expected to list on both BSE and NSE on October 1.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)