Parmeshwar Metal Lists at 38% Premium, Shows Strong Momentum on BSE SME

Parmeshwar Metal Limited, a specialized manufacturer of copper wire and rods operating since 2016, marked a strong entry into the public markets on Thursday, 9th January 2025. The company, which has established itself with ISO 9001:2015 certified manufacturing capabilities in Dehgam, Gujarat, commenced trading on the BSE SME platform amid exceptional investor enthusiasm.

Parmeshwar Metal Listing Details

The company's market debut reflected strong investor confidence in its business model and growth prospects:
 

• Listing Time & Price: When trading commenced at market open, Parmeshwar Metal shares debuted at ₹84.50 on BSE SME, delivering an impressive 38.52% premium to IPO investors. This strong opening validates the market's recognition of the company's established manufacturing capabilities and customer relationships, though it fell short of grey market expectations of a 62.3% premium.
• Issue Price Context: The considerable premium emerged after the company had strategically priced its IPO between ₹57 and ₹61 per share, ultimately fixing the final issue price at ₹61. This pricing approach successfully balanced institutional investor accessibility with fair value for the company's growth potential.
• Price Evolution: By 10:50 AM IST, investor enthusiasm continued to build, pushing the stock to hit the upper circuit at ₹88.72, representing an outstanding gain of 45.44% over the issue price, after touching an intraday high of ₹88.72, demonstrating sustained buying interest throughout the early trading session.

Parmeshwar Metal First-Day Trading Performance 

The trading activity showed robust participation and strong investor conviction:

• Volume and Value: Within the first few hours, 16.42 lakh shares changed hands, generating a substantial turnover of ₹13.95 crore. Notably, 100% of traded shares were marked for delivery, indicating genuine investment interest rather than speculative trading.
• Demand Dynamics: The stock's appeal was evident in the order book, which showed tremendous buying pressure with orders for 5 lakh shares while sellers remained absent at the upper circuit. This imbalance highlighted strong investor belief in the company's long-term prospects.

Parmeshwar Metal Market Sentiment and Analysis

• Market Reaction: Strong opening followed by further upward momentum
• Subscription Rate: The Parmeshwar Metal IPO was massively oversubscribed by 607.07 times, with NIIs leading at 1,202.83 times subscription, followed by retail investors at 597.09 times, and QIBs at 177.32 times
• Pre-listing Interest: Anchor investors demonstrated strong confidence by investing ₹7.04 crore before the public issue

Parmeshwar Metal Growth Drivers and Challenges

Expected drivers of future performance:

• Experienced management team
• Strong customer relationships
• Customized product offerings
• Diversified supplier base
• High-volume operations

Potential challenges:

• Copper price volatility
• Low margin business
• Working capital intensity
• Competitive market dynamics
   

Utilisation of IPO Proceeds 

The ₹24.74 crore raised will be used for:

• New manufacturing facility for bunched copper wire
• Furnace renovation
• Working capital requirements
• General corporate purposes

Parmeshwar Metal Financial Performance 

The company has shown mixed results:

• Revenue increased by 13% to ₹1,102.46 crore in FY2024 from ₹972.71 crore in FY2023
• 7M FY2025 (ended October 2024) showed revenue of ₹757.31 crore with PAT of ₹5.70 crore
• Solid financial metrics with ROE of 21.49% and ROCE of 17.51%

As Parmeshwar Metal begins its journey as a listed entity, market participants will closely monitor its ability to manage copper price volatility and maintain margins while expanding operations. The strong listing and immediate upper circuit suggest robust investor confidence in the company's prospects in the copper manufacturing sector, particularly given its focus on quality certification and plans to expand manufacturing capabilities through its new facility in Dehgam.