Nilachal Carbo Metalics IPO: Is this the right opportunity for investment?
Another IPO is going to explode on Dalal Street, which has become a topic of much discussion for investors. Nilachal Carbo Metalicks IPO, a company that manufactures ferro alloy grade coke, is going to open on 8 September. This can be a fresh opportunity for investors, but before that it is important to understand the company’s business model, expansion plans and financials. In this article, we will give you complete details in simple and emotional words so that you can know how beneficial this IPO can be for you.
Nilachal Carbo Metallics IPO details you should know
The Nilachal Carbo Metalicks IPO will be a fixed price issue with a size of ₹56.1 crore. A total of 66 lakh shares are being offered, of which 26 lakh shares will come as a fresh issue worth ₹22.1 crore. There will also be an offer-for-sale (OFS) of 40 lakh shares worth ₹34 crore offered by Kajal Fashionwear Agency. The offer price of the IPO has been fixed at ₹85 per share.
The subscription window will be open for only three days – from 8 September to 10 September. IPO allotment will be finalized on 11 September and listing of shares will be done on BSE SME on 15 September.
Company’s business and expansion plan
Nilachal Carbo Metalicks, belonging to Odisha, was started in 2003. The company manufactures low ash metallurgical (LAM) coke for the ferro alloys industry. Its production units are situated in Jajpur (Odisha) and Visakhapatnam (Andhra Pradesh), from where the company manufactures around 78,000 metric tonnes of LAM coke every year.
Apart from this, the company has also done a tie-up with Om Avi Carbon Resources, which provides additional manufacturing capacity of 24,000 MTPA. Now the company is planning to install another battery to take its growth to the next level in which 36 ovens will be installed. After this, the total capacity of Jajpur plant will increase from 34,400 MTPA to 1,12,400 MTPA.
The money raised from the fresh issue will be mainly spent on the installation of a new cook oven plant and modernization of existing plants.
Financial performance and challenges
Here comes an important point which every investor should keep an eye on – financial performance. In the last few years, the company’s results have been a bit inconsistent. The company’s net profit fell 11.4% to ₹14 crore within FY25 from ₹15.8 crore last year. During this period, the company’s revenue also fell by 24% to ₹ 201.5 crore, while it was ₹ 265.1 crore in FY24.
Such a decline can be a matter of concern for investors, because the real purpose of IPO is not just to raise money, but to show long-term growth and sustainable profitability of the company. But the company’s expansion plans and modernization steps can help reverse this negative trend.
Risk and opportunity in Nilachal Carbo Metalicks IPO
Every IPO is a chance but it also comes with risk. Nilachal Carbo Metalicks IPO provides investors exposure to a growing sector which is crucial for the ferro alloys and steel industry. Coke demand is directly connected to India’s infrastructure and industrial growth.
On the other hand, inconsistent financial numbers pose a slight risk. If expansion is successfully implemented and modernization improves efficiency, the company can grow its revenue and profit margin again.
Merchant banker and IPO handling
The merchant banker for this IPO is Sun Capital Advisory Services which is handling its issues. After listing on the SME platform, both liquidity and volatility are likely to remain high. Therefore, investors should take a decision keeping in mind their risk appetite.
Final thoughts on Nilachal Carbo Metalicks IPO
In today’s competitive environment, every IPO comes with a different story. Nilachal Carbo Metalicks has embarked on its expansion journey where it is modernizing its plants and planning to double the production capacity. But the recent financial slowdown is a signal that investors should carefully evaluate this IPO.
If you have a long-term vision and you feel that the demand for the coke manufacturing sector is going to increase continuously, then Nilachal Carbo Metalicks IPO can be a good opportunity. But if you are thinking of short-term listing gains, then market sentiments and demand-supply dynamics will have to be closely monitored.
Disclaimer:
This article has been written for informational purpose only. The views and analysis given here are not investment advice of any kind. It is important to consult your financial advisor before investing in an IPO. Stock market investments come with risk, so take decisions according to your risk profile.
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