Krupalu Metals Makes Weak Debut with 20% Discount, Lists at ₹57.60 Against Poor Subscription Response

Krupalu Metals Limited, the brass and copper products manufacturer, made a disappointing debut on BSE SME on September 16, 2025. After closing its IPO bidding between September 8-11, 2025, the company commenced trading with a 20% discount at ₹57.60, significantly below the issue price of ₹72, reflecting weak investor confidence in the small-scale metals manufacturing sector amid challenging market conditions.

Krupalu Metals Listing Details

Krupalu Metals Limited launched its fixed price IPO at ₹72 per share with a minimum investment of 3,200 shares costing ₹2,30,400. The IPO received a weak response with a subscription of 2.96 times - retail investors at a disappointing 1.85 times and NII at 6.45 times, indicating limited investor interest, with particularly poor retail participation in the brass and copper manufacturing business.

First-Day Trading Performance Outlook

• Listing Price: Krupalu Metals share price opened at ₹57.60 on BSE SME, representing a discount of 20% from the issue price of ₹72, delivering losses for investors, indicating neutral to negative sentiment towards the company.

Growth Drivers and Challenges

Growth Drivers:

• Diversified Product Portfolio: Comprehensive range of brass and copper products, including sheets, strips, rods, components, washers, and custom parts, catering to diverse industrial applications and reducing customer concentration risk.
• Strong Financial Growth: Revenue grew 31% to ₹48.50 crore in FY25 with PAT surging 39% to ₹2.15 crore, demonstrating robust operational efficiency and market demand for brass and copper products.
• Capacity Expansion Plans: IPO proceeds of ₹5.18 crore allocated for additional plant and machinery purchase supporting production capacity enhancement and business scaling opportunities.
• Operational Metrics: Impressive ROCE of 48.45%, solid RoNW of 35.12%, healthy EBITDA margin of 7.65%, and PAT margin of 4.45% indicating efficient capital utilisation and operational performance.

Challenges:

• High Leverage Concerns: Debt-to-equity ratio of 1.37 indicates elevated financial leverage requiring careful debt management and potential strain on cash flows, affecting growth investments and financial flexibility.
• Small Scale Operations: Tiny issue size of ₹13.48 crore and limited manufacturing capacity with only 13 permanent employees, indicating restricted operational scale and competitiveness against larger industry players.
• Weak Market Reception: Poor listing performance with a 20% discount and low subscription of 2.96 times reflecting investor scepticism about valuation, business prospects, and sector fundamentals.
• Commodity Price Volatility: Brass and copper manufacturing business is exposed to raw material price fluctuations, supply chain disruptions, and metal market cycles, affecting margin stability and profitability.

Utilisation of IPO Proceeds

• Capacity Enhancement: ₹5.18 crore for funding capital expenditure towards the purchase of additional plant and machinery, boosting manufacturing capabilities and production efficiency.
• Working Capital: ₹5.70 crore for operational requirements supporting inventory management, order fulfilment, and business expansion in the brass and copper products market.
• Corporate Expenses: ₹1.10 crore for general corporate purposes and ₹1.49 crore for issue-related expenses supporting operational needs and IPO costs.

Financial Performance of Krupalu Metals

• Revenue: ₹48.50 crore for FY25, showing strong growth of 31% from ₹37.12 crore in FY24, reflecting robust demand for brass and copper products in industrial applications.
• Net Profit: ₹2.15 crore in FY25, representing impressive growth of 39% from ₹1.55 crore in FY24, indicating operational leverage and margin expansion benefits.
• Financial Metrics: Strong ROCE of 48.45%, elevated debt-to-equity ratio of 1.37, solid RoNW of 35.12%, modest PAT margin of 4.45%, healthy EBITDA margin of 7.65%, and estimated market capitalisation of ₹42.28 crore.