Jainik Power Cables Ltd. IPO: Key Details

Jainik Power Cables

• Jainik Power Cables is coming out with an initial public offering (IPO) of 46,63,200 equity shares in a price band Rs 100-110 per equity share.
• The issue will open on June 10, 2025 and will close on June 12, 2025.
• The shares will be listed on SME Platform of NSE.
• The face value of the share is Rs 10 and is priced 10.00 times of its face value on the lower side and 11.00 times on the higher side.
• Book running lead manager to the issue is Fast Track Finsec.
• Compliance Officer for the issue is Kumari Sonal.

Profile of the company

Jainik Power Cables is engaged in manufacturing of aluminum wire rods from the year 2023, and it’s been more than a decade since the company has worked in the metal industry, before the manufacturing the company deals in the trading of aluminum rods. The company is a manufacturer and supplier of aluminum wire rods with quality practices and compliant with the Environmental, Health, and Safety (EHS) in the manufacturing industry as certified with the ISO Certificates held by the company. The company has a Quality Assurance Department which ensures testing through spectrometers for purity checks and detects even hidden impurities.

The company started manufacturing on April 1, 2023. It purchased land in the financial year 2021-22 and immediately began construction of a building for its manufacturing facilities. The company also purchased additional land in the financial year 2022-23 and incurred capital expenditure related to the existing manufacturing facility.

Its manufacturing facility located in Sonipat, Haryana, has been certified with ISO 9001:2015 from Innovative Systemcert Pvt. Ltd., ISO 45001:2018 from Innovative Systemcert Pvt. Ltd. (Accredited by EGAC, A Member of International Accreditation Forum) and ISO 14001:2015 from United Accreditation Foundation, a member of International Accreditation forum to maintain quality, environmental and safety practices. The company has obtained certificate of authorization from Haryana State Pollution Control Board for generation, collection, storage, disposal of certain Hazardous Substance. The authorization allows the company to use mineral/synthetic oil as lubricant in hydraulic systems or other applications.

Proceed is being used for:

• Meeting the working capital requirements of the company
• Funding and set up a plant
• Repayment of portion of loan availed by the company
• Meeting the general corporate purposes
• Meeting the issue expenses

Industry Overview

Aluminium is the second most used metal in the world after steel with an annual consumption of 88 Million Tonnes (including scrap). Aluminium consumption in India at 2.5 kg per capita is much below the global average of 11kg per capita. Rise in infrastructure development and automotive production are encouraging development in the metals and mining sector in India. India has nearly 10% of the world’s bauxite reserves and a growing aluminium sector that leverages this. Demand in the domestic market is expected to rise by 8-10%. India is considered to be the fifth largest producer of aluminium in the world with a tremendous bauxite reserve of about 3 billion tonnes. While the major consumption of aluminium in India is done by the electrical (31%) and B&C sectors (13%), the future growth is envisaged to happen in the solar power and industrial sector. One is witnessing the rapid development of this industry with a phenomenal growth noticed since 2002 and the industry is posed to play a significant role in the future growth of the Indian economy.

Meanwhile, the aluminium extrusion industry in India has witnessed a growth of 150% over the last eight years from 300,000 tonnes in 2010 to 800,000 tonnes in 2018. While construction constitutes 60%, consumption from industrial and transportation, Building & Construction comprise 28% and 12% of overall extrusion consumption respectively. The aluminium extrusion process involves creating parts of homogeneous cross-sections which is achieved by forcing the metal through an outlet (that is designed in the required configuration/shape of the extruded profile) under high pressure.

China continued to be the world's largest producer and consumer of aluminium with a production level of 36.7 million tonnes in 2020, constituting about 56.7% of total global output. In 2021, world primary Aluminium demand has reached new all-time highs in recent months and is projected to increase to 67.4 million tonne for the year. The main drivers behind this steep recovery have been monetary and fiscal stimulus around the world, tight scrap market, a metal intensive economic recovery as spending in capital goods trumpeted over experiences given the pandemic and the ongoing green revolution that favors aluminum as the material of choice. The consumption is projected to go higher in coming years with increased demands from Western and Asian markets. 

Pros and strengths

Digital presence: It involves establishing and maintaining a brand’s visibility, credibility, and engagement across online platforms. It's about creating a strong online footprint that resonates with the target audience. 

Quality assurance: At Jainik, the emphasis on quality standards is stated transparently and met for every cycle of the manufacturing process.

B2B partnership: Identifying potential partners, such as construction companies, electrical equipment manufacturers, etc. that are using aluminium wire rods.

Risks and concerns

Limited experience in manufacturing of aluminium goods: Although the company has experienced significant growth over the past five years, and has significantly expanded its operations and product portfolio, the company only has one-year experience in the area for manufacturing. As per its Restated Standalone Financial Statements, its revenues from operations increased at a CAGR of 128.45%% from FY 2023 to FY 2025, while its EBITDA increased at a CAGR of 221% for the same period. It cannot assure that its growth strategy will continue to be successful or that it will be able to continue to expand further, or at the same rate. The success of its business will depend greatly on its ability to effectively implement its business and growth strategy. The company’s growth strategy involves focusing on production of wide range of aluminum products.

Maximum revenue comes from limited customers: The company’s top ten customers contribute 52.28%, 75.26% and 73.85% of its total sales for the year ended March 31, 2025, 2024 and 2023 respectively. The company’s business operations are highly dependent on its customers and the loss of any of its customers may adversely affect its sales and consequently on its business and results of operations. The loss of one or more of these significant or key customers or a reduction in the amount of business it obtains from them could have an adverse effect on its business, results of operations, financial condition and cash flows.

Geographical constrain: The company’s business operations are based and concentrated in one area i.e., Sonipat, Haryana. As a result, any localized social unrest, natural calamities, distress or breakdown of services and utilities in and around this region, could have material adverse effect on its business, financial position and results of operations. Further, any continuous addition of similar industries/competitors in and around these areas, without commensurate growth of its infrastructural facilities may put pressure on the existing infrastructure and also increase competition in the area, which may affect its business and results of operation. The prices it can obtain for the products that it trades depend largely on prevailing market prices.

Outlook

Jainik Power Cables has been manufacturing aluminum wire rods since 2023 and has over a decade of experience in the metal industry, previously trading in aluminum rods. The company manufactures and supplies aluminum wire rods, adhering to Environmental, Health, and Safety (EHS) standards, as certified by ISO certifications. Its Quality Assurance Department conducts purity tests using spectrometers to detect hidden impurities. On the concern side, the company is dependent on few numbers of customers for sales. The loss of any of this large customer may affect its revenues and profitability. The company, only has one year of prior experience in manufacturing of aluminium goods which could adversely affect the results of operations and financial condition of the company.

The company is coming out with a maiden IPO of 46,63,200 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 100-110 per equity share. The aggregate size of the offer is around Rs 46.63 crore to Rs 51.30 crore based on lower and upper price band respectively. On performance front, the company’s net revenue from operations for the Financial Year 2024-25 stood at Rs 35,168.95 lakh. Whereas for the Financial Year 2023-24, it stood at Rs 33,862.12 lakh representing an increase of 3.86%. The restated profit before tax for the Financial Year 2024-25 stood at Rs 923.60 lakh. Whereas for the Financial Year 2023-24, it stood at Rs 501.86 lakh.

The company will increase the capacity of current finished goods. This will be done in order to achieve perfect utilization of its batch- making process, also ensure efficient use of power. Economies of scale will also be achieved to the fullest. Further, the company plans to keep utilizing its current network of sales and marketing contacts, its wide range of products, and its reputation in the market to build new local, regional, and global clientele and broaden its customer base in order to efficiently increase its market share.