Jain Resource Recycling Limited was incorporated on February 25, 2022, and pioneer in the recycling and production of non-ferrous metals in India. The company products portfolio includes lead and lead alloy ingots, copper and copper ingots, and aluminum and aluminum alloys. Jain Resource Ltd. serves to customers in various industries including electrical and electronics, lead acid batteries, automotive, and pigments. The company has domestic and international clients such as Vedanta Limited-Sterlite Copper, Luminous Power Technologies Private Limited, and Mitsubishi Corporation Rtm (Japan). Jain Resource Ltd. operates three recycling facilities located in Chennai which include various types of metal scrap, including copper, lead, and aluminum. The company has a rich global presence across major geographies including China, Japan, and South Korea which accounted for 50% of revenue of the company from export in 2024 for September ending.
Objective of Jain Resource Recycling IPO
As per the draft red hearing prospects, the IPO issue consists fresh issue and offer for sale. The fresh issue consists of XXXX shares at the face value of ₨ 2.00 each aggregating up to ₹5,000 .00 millions and OFS consists XXXX shares at face value of ₨ 2.00 each aggregating up to ₨ 15,000.00 millions. There are fresh shares issues and OFS by company and main objective of company is repayment of outstanding borrowing and general corporate expenses.
Jain Resource Recycling IPO Details
| IPO Open Date | N.A. |
| IPO Close Date | N.A. |
| Basis of Allotment | N.A. |
| Listing Date | N.A. |
| Face Value | ₹2.00 per share |
| Price | N.A. |
| Lot Size | N.A. |
| Total Issue Size | Up to XXXX Equity Shares |
| Aggregating up to ₨ 20,000.00 million | |
| Fresh Issue | Up to XXXX Equity Shares |
| Aggregating up to ₹5,000 .00 million | |
| Offer For Sale | Up to XXXX Equity Shares |
| Aggregating up to ₨15,000.00 million | |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE & NSE |
| QIB Shares Offered | Not more than 75% of the Net Issue |
| Retail Shares Offered | Not more than 10% of the Net Issue |
| NII (HNI) Shares Offered | Not less than 15% of the Net Issue |
Jain Resource Recycling IPO: Issue Price & Size
The issue price of JAIN RESOURCE RECYCLING LIMITED hasn’t been released yet. Upon releasing the dates, the investors can bid between those price ranges. The company has fresh issue and OFS aggregating up to ₹ 20,000.00 million at the price of ₨XXXX.
Jain Resource Recycling IPO Launch Date
The IPO opening date of JAIN RESOURCE RECYCLING LIMITED hasn’t been officially announced yet, upon the declaration of dates investor can bid for IPO.
Financial Statements of Jain Resource Recycling Limited
| S.No | Particulars (₨ million) | Ended September 30 , 2024 |
March 31 , 2024 |
March 31 , 2023 |
March 31 , 2022 |
| I | Revenue from Operations | 28,886.22 | 44,284.18 | 30,640.71 | 28,495.99 |
| II | Other Income | 204.85 | 564.23 | 434.55 | 307.41 |
| III | Total Income ( I + II ) | 29,091.07 | 44,848.41 | 31,075.26 | 28,803.40 |
| IV | Expenses : | ||||
| Cost of materials consumed | 24,239.83 | 40,437.44 | 27,696.96 | 26,184.75 | |
| Purchases of Stock - in - trade | 807.69 | 1,198.50 | 1,311.02 | 354.21 | |
| Changes in Inventories of finished goods | 1,008.07 | -1,540.96 | -1,128.72 | -650.68 | |
| Employee benefits expense | 129.69 | 324.10 | 144.31 | 103.00 | |
| Finance costs | 405.49 | 533.48 | 304.79 | 159.81 | |
| Depreciation and amortisation expense | 67.34 | 156.92 | 135.30 | 87.23 | |
| Other expenses | 907.84 | 1,592.91 | 1,375.38 | 1,340.35 | |
| Total Expenses | 27,565.95 | 42,702.39 | 29,839.04 | 27,578.67 | |
| V | Restated Profit before tax ( III - IV ) | 1,525.12 | 2,146.02 | 1,236.22 | 1,224.73 |
| VI | Share of profit / ( loss ) from associate | -0.09 | - | - | - |
| VII | Restated Profit before tax ( V + VI ) | 1,525.03 | 2,146.02 | 1,236.22 | 1,224.73 |
| VIII | Tax Expense : | ||||
| ( 1 ) Current Tax | 352.90 | 530.46 | 350.63 | 283.78 | |
| ( 2 ) Tax relating to earlier years | 4.78 | - | - | - | |
| ( 3 ) Deferred Tax Charge / ( Benefit ) | 45.84 | -22.71 | -32.51 | 72.95 | |
| 403.52 | 507.75 | 318.12 | 356.73 | ||
| IX | Restated Profit / ( loss ) for the period / year ( VII - VIII ) | 1,121.51 | 1,638.27 | 918.1 | 868.00 |
Key financial ratios of Jain Resource Recycling Ltd
| S.No. | Particulars | Ended Sept 30 ,2024 | FY Mar 31, 2024 | FY Mar 31, 2023 | FY Mar 31, 2022 |
| 1 | Revenue | 28,886.22 | 44,284.18 | 30,640.71 | 28,495.99 |
| 2 | Revenue Growth % | NA | 44.53 % | 7.53 % | NA |
| 3 | EBITDA | 1,793.01 | 2,272.18 | 1,241.76 | 1,164.36 |
| 4 | EBITDA Margin % | 6.21 % | 5.13 % | 4.05 % | 4.09 % |
| 5 | EBITDA Growth % | NA | 82.98 % | 6.65 % | NA |
| 6 | PAT | 1,121.51 | 1,638.27 | 918.10 | 868.00 |
| 7 | PAT Margin % | 3.88 % | 3.70 % | 3.00 % | 3.05 % |
| 8 | PAT Growth % | NA | 78.44 % | 5.77 % | NA |
| 9 | ROE % | 26.31 % | 57.66 % | 59.94 % | 80.91 % |
| 10 | ROCE % | 12.62 % | 19.13 % | 12.31 % | 12.47 % |
| 11 | Net worth | 4,818.34 | 3,671.81 | 1,969.73 | 1,059.10 |
| 12 | RONW % | 26.42 % | 58.08 % | 60.62 % | 81.96 % |
| 13 | NAV | 14.89 | 11.35 | 6.09 | 3.27 |
| 14 | Net Debt | 8,273.66 | 6,091.79 | 5,870.42 | 5,352.71 |
| 15 | Net Debt / Equity | 1.71 | 1.65 | 2.95 | 4.99 |
| 16 | Fixed Asset Turnover | 34.62 | 57.75 | 47.85 | 51.97 |
Promoters & Shareholding of Jain Resource Recycling IPO
As of date, according to the DRHP filed with SEBI promoters and promoter group have 98.24% shareholding in company.
| S. No. | Name of Shareholder | No. of Equity shares | Percentage of Equity shares |
| Promoter | |||
| 1. | Kamlesh Jain | 25,81,15,160 | 79.78 % |
| Promoter Group | |||
| 2. | Jain Family Trust | 24,896,020 | 7.70 % |
| 3. | Mayank Pareek | 6,268,030 | 1.94 % |
| 4. | Suryavanshi Commotrade Private Limited | 3,916.875 | 1.21 % |
| 5. | Bengal Finance & Investments Private Limited | 3,916,875 | 1.21 % |
| 6. | Star Trust | 15,667,510 | 4.84 % |
| 7. | Motilal Oswal Finvest Limited | 5,055,220 | 1.56 % |
| Total | 317,835,690 | 98.24 % |
Should You Subscribe To Jain Resource Recycling IPO
While investing or subscribing to any IPO, consider the investment rationales related to the company. Hence, here you can find out the strength of the company that will be its growth factors. And also check the risk factors that can affect the growth and operational efficiency of the company.
Competitive Strengths of Jain Resource Recycle IPO
Consistent profitability record
Jain Resource Ltd. has shown a consistent track record of growth and profitability. The operations efficiency and strategic business decisions ability support the company to record better revenue among its competitors. The revenue from operations of the company has 7.53% YoY growth from FY 2022-2023 and growth of 44.53% YoY from FY 2023-2024. The gross profit margins of the company have increased to 6.44% from 5.05% in fiscal 2024 and 78.44% from 5.77% growth in profit after tax in fiscal 2023-2024. In FY 2024company recorded a 44.53% YoY increase in EBITDA growth of 82.98% with 39.69% of CAGR.
Capabilities to handle different products with strategic location
The recycling facilities of the company have diversified capabilities to recycle lead acid battery scrap, lead copper relay scrap, and various types of lead scraps. Along with this company has one of the largest battery-shredding machines, which enables the company to cater broad range of customers across product categories. The additional advantage for a company is its location in key industrial hubs SIPCOT, Tamil Nadu near Chennai port which offers connectivity with Ennore port and Katupalli port. This port serves in import and export from China and South East Asian countries.
Strong customer base with global footprint and deep sourcing capabilities
Jain Resource Ltd. established a presence in the international market which strongly contributes to domestic business growth. The capabilities of the company enable it to serve various customers in the international market and enduring customer relationships. The customer relationship has helped the company to expand its product offerings and geographic reach in addition to allowing them to plan their capital expenditure. It enhances the company's ability to benefit from increasing economies of scale and profitability. Jain Metal Group has imported material from 120 countries over the last three years, sourcing materials from retail scrap yards from those countries.
Hedging Mechanism for Business
The business operations of the company are directly impacted by fluctuations in the prices of base metals. The change in price in these metals can significantly affect company profitability. To safeguard the financial position of the company against this price volatility, Jain Recycle Ltd. utilizes hedging exclusively within the metals market by entering into futures derivatives contracts on the London Metal Exchange. This targeted strategy of the company effectively manages commodity price pick which helps to maintain a stable & secure financial position.
Risk Factors of Jain Resource Recycle IPO
Dependency on Key products
The company derives a significant portion of its revenue from sales of key products. There is dependency of company from sale of certain products including lead and lead alloy ingots, copper and copper ingots. In addition, company may not be able to diversify into new product lines which may adversely affect business of company, revenue from operations, cash flows and financial condition.
| Particular | Six months Sept 2024 | Fiscal 2024 | Fiscal 2023 | |||
| Segment | Revenue from operations |
( % ) of revenue | Revenue from operations |
( % ) of revenue | Revenue from operations |
( % ) of revenue |
| Lead & Lead Alloy Ingots | 11,851.25 | 41.03 % | 20,762.29 | 46.88 % | 10,702.49 | 34.93 % |
| Copper & Copper Ingots |
14,910.52 | 51.62 % | 19,281.92 | 43.54 % | 18,154.19 | 59.25 % |
| Aluminium & Aluminium Alloys |
718.73 | 2.49 % | 2,718.33 | 6.14 % | 353.07 | 1.15 % |
| Others | 1,405.72 | 4.87 % | 1,521.64 | 3.44 % | 1,430.96 | 4.67 % |
| Total | 28,886.22 | 100.00 % | 44,284.18 | 100.00 % | 30,640.71 | 100.00 % |
Raw material outsourcing
The company depends on third-party suppliers for the supply of scrap required for business operations. The majority of exporters of raw materials such as lead scrap and copper come from the United States of America, Malaysia, Kuwait, United Kingdom, and UAE contributing to 42.05% as of FY 2024. The ability of the company to remain competitive and profitable depends on its ability to source and maintain a stable and sufficient supply of raw materials. Any disruptions in the supply or availability of the scrap or fluctuation in prices may adverse impact on business operations, cash flows, and financial performance.
Risk from outstanding borrowing
The company has incurred indebtedness and as of 30 September, 2024 Company had aggregate outstanding borrowing of ₨9,697.47 million (including current maturities of long-term borrowings). In the event company fails to service debt obligations then lenders have the right to enforce the security in respect of company secured borrowings and dispose assets of company to recover the amounts. An inability to comply with repayment and other covenants in our financing agreements could negatively affect financial conditions.
Foreign exchange rate risk
Jain Resource Recycle generates a significant portion of its sales internationally through export and sales outside of India. For the six months ended September 30, 2024, and in the past three fiscal years Company constituted more than 50% of revenue from outside India. The company also import raw material for their operation from outside the country. These imports and exports are occurred in foreign currencies, mainly in dollar and Euro. This exposes foreign exchange rate risks for company for receivables, payables, export, and import of goods. If the rate moves oppositely then it would affect the revenue and profit margin of the company.
Grey Market Premium of Jain Resource Recycle IPO
Grey market premium is the premium quoted over the IPO issue price. GMP shows that investors are ready to pay above the upper band of the IPO issue price. GMP is determined in the grey market as per the demand and supply of the shares in the primary market. A grey market is that unofficial ecosystem of unlisted companies' stocks that start trading even before the launch of the IPO to the date of its listing.
Also Read: What is Grey Market Premium in IPO: How is GMP Calculated & Reliable
However, GMP is not a reliable factor, as it keeps fluctuating as per the demand and supply of shares in the primary market. There are numerous factors that affect the stock market in India and individual stock prices of different companies that are already listed and trading in the secondary market. However, for an IPO-bounded company, you can consider the GMP as the speculative listing price of the share
According to various online sources, the Grey Market Premium or GMP of the Jain Resource Recycling Limited is trading around Rs XX in the grey market. It means shares are trading at the upper band issue price of Rs XX with a premium in the grey market and may list around the same price.
