Jainik Power and Cables is listed on NSE SME at ₹82 price with a 25.45% discount from the issue price

The aluminium wire rods manufacturer, Jainik Power and Cables Limited, made a weak debut on the NSE SME platform. After closing its IPO bidding between June 10 - June 12, 2025, the company made its stock market debut on June 17, 2025, at a 25.45% discount to the issue price, delivering negative returns to investors. This book-building IPO raised ₹51.30 crore with a modest subscription of 1.54 times, reflecting muted investor sentiment for the aluminium wire rods sector as the company aims to expand working capital requirements and establish new manufacturing facilities.

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Jainik Power and Cables IPO Listing Details

Jainik Power and Cables Limited launched its IPO through the book-building process, and the Jainik Power and Cables stock price was set at ₹110 per share. The minimum investment required was 1,200 shares costing ₹1,32,000. The IPO received a modest response with an overall subscription of 1.54 times - retail segment at 2.08 times, QIB at 1.01 times, and NII at 1.13 times by the final day of bidding, indicating lukewarm investor interest across categories. Jainik Power and Cables' share price is listed at ₹82 on NSE SME, offering a 25.45% discount from the issue price. Jainik Power and Cables' stock price debut reflects weak market sentiment and a cautious investor approach towards the company.

Listing Price: The Jainik Power and Cables share price opened at ₹82 on NSE SME on June 17, 2025, representing a discount of 25.45% from the issue price of ₹110, resulting in immediate losses for investors at listing.

First-Day Trading Performance Outlook

Jainik Power and Cables IPO commenced trading on NSE SME on June 17, 2025, witnessing a weak stock market debut. The Jainik Power and Cables share price opened at ₹82, marking a 25.45% discount from its IPO price of ₹110, delivering negative returns to investors at listing. The company entered the market with established operations in aluminium wire rods manufacturing, serving customers across Delhi, Haryana, Rajasthan, Uttar Pradesh, and Uttarakhand, and maintaining ISO certifications for quality, environmental, and safety practices.

Growth Drivers and Challenges

Jainik Power and Cables presents growth potential with its transition from trading to manufacturing, established market presence in North India, and expanding production capacity to meet rising demand. The growing infrastructure development and electrical projects support demand for aluminium wire rods. However, the company faces challenges, including intense competition in the commodity-driven aluminium wire rods market, concerns about aggressive valuation noted by analysts, and dependency on raw material price fluctuations affecting margins.

Growth Drivers:

• Manufacturing Transition: Successful transition from trading to manufacturing aluminium wire rods since 2023, establishing production capabilities and value-added operations
• North India Market Presence: Strong regional presence across Delhi, Haryana, Rajasthan, Uttar Pradesh, and Uttarakhand with established customer relationships
• Quality Certifications: Comprehensive ISO certifications for quality (9001:2015), safety (45001:2018), and environmental management (14001:2015), ensuring operational excellence
• Capacity Expansion Plans: Strategic expansion of manufacturing facilities to meet rising demand in the aluminium wire rods segment
• Financial Performance: Significant PAT growth of 84% in FY25, demonstrating improved operational efficiency and business momentum

Challenges:

• Aggressive Valuation Concerns: Analysts are noting aggressive pricing of the issue based on financial data, suggesting potential overvaluation risks
• Commodity Market Dependency: Operating in a commodity-driven aluminium wire rods market with exposure to raw material price volatility and margin pressures
• Limited Geographic Reach: Regional concentration in North India limits market diversification and growth opportunities
• Competition Intensity: Operating in a competitive aluminium wire rods market with pressure from established players and pricing challenges

Utilisation of IPO Proceeds

Jainik Power and Cables plans to utilise the ₹51.30 crore raised from the fresh issue to strengthen its working capital position and support strategic business expansion.

• Working Capital Requirement: ₹23.50 crore allocated for working capital requirements to support business operations and inventory management for aluminium wire rods manufacturing.
• Manufacturing Facility: ₹10.99 crore designated for funding and setting up a new plant to expand production capacity and enhance manufacturing capabilities.
• Debt Repayment: ₹5.00 crore earmarked for repayment of portion of loans availed by the company to reduce financial burden and improve debt profile.
• General Corporate Purposes: Remaining funds allocated for general business needs and corporate initiatives to support strategic growth plans.

Financial Performance of Jainik Power and Cables IPO

Jainik Power and Cables has shown mixed financial performance with notable profitability improvement:

• Revenue: ₹352.38 crore for FY25, demonstrating steady business momentum with 4% growth from ₹339.23 crore in FY24, reflecting stable demand for aluminium wire rods despite market challenges.
• Net Profit: ₹9.24 crore in FY25, showing a strong growth trajectory with an 84% surge from ₹5.02 crore in FY24, showcasing improved operational efficiency following the transition to manufacturing.
• Financial Metrics: The company shows a high ROE of 56.92% and an impressive ROCE of 55.92%, though with an elevated debt-to-equity ratio of 0.79, indicating a leveraged capital structure and financial risk.
   

Jainik Power and Cables offers a mixed investment opportunity in the aluminium wire rods manufacturing sector with its successful transition from trading to manufacturing and strong regional market presence. While it faces challenges like aggressive valuation concerns, commodity market dependency, and weak listing performance, its manufacturing capabilities and expansion plans position it strategically for capitalising on India's growing demand for aluminium wire rods, driven by infrastructure development and electrical projects. The weak listing performance with a 25.45% discount reflects cautious investor sentiment towards the company's business model and growth prospects in the competitive aluminium wire rods market.