About Classic Electrodes (India) Ltd - SME IPO
Classic Electrodes (India) Ltd is a well-established manufacturer specializing in welding electrodes and allied products, catering to diverse industries such as engineering, construction, and manufacturing. With over 27 years of industry experience, the company has built a strong reputation for delivering high-quality welding solutions that ensure durability and performance. Operating from two key manufacturing plants located in West Bengal and Haryana, Classic Electrodes leverages advanced technology and stringent quality control measures to meet the exacting standards of its industrial clientele. Their product range includes various types of welding electrodes and MIG wires, essential for critical welding applications across multiple sectors. Positioned as a prominent player in the manufacturing sector.
Read DRHP Here:|CLASSIC ELECTRODES|
| Information | Details |
|---|---|
| IPO Price Band | ₹82 – ₹87 per share |
| Minimum Lot Size | 1,600 shares (about ₹139,200) |
| Issue Size | ₹41.51 crore |
| Face Value | ₹10 per share |
| Stock Exchange | NSE SME Platform |
| Registrar | Link Intime India Private Limited CLICK HERE |
| Book Running Lead Manager | GYR Capital Advisors Pvt Ltd |
| Issue Type | Book Building |
| Offer Structure | Fresh Issue only |
| Retail Investor Quota | Up to 35% |
| QIB Quota | Up to 50% |
| Non-Institutional Investor Quota | Up to 15% |
IPO Timeline
| Event | Date |
|---|---|
| IPO Opens | 22nd August 2025 |
| IPO Closes | 26th August 2025 |
| Allotment Date | 28th August 2025 |
| Refunds/Unsuccessful Bids | 28th August 2025 |
| Shares Credit to Demat | 29th August 2025 |
| Listing Date | 1st September 2025 |
What Will The Money Be Used For?
- Buying new plant and machinery to expand production (₹10 crore approx.)
- Repaying some of the company’s existing loans (₹10 crore approx.)
- Meeting working capital needs like buying raw materials (₹16.6 crore approx.)
- General corporate purposes (₹4.9 crore approx.)
Key Financials (₹ Crore)
| Financial Metric | FY23 | FY24 | 11M FY25 |
|---|---|---|---|
| Revenue | 150.87 | 193.82 | 187.60 |
| Profit After Tax (PAT) | 2.08 | 12.29 | 9.57 |
| EBITDA | 8.54 | 23.03 | 19.24 |
| EBITDA Margin (%) | 5.65 | 11.85 | 10.24 |
| PAT Margin (%) | 1.38 | 6.34 | 5.10 |
| Return on Capital Employed (ROCE) (%) | 9.38 | 25.78 | 17.68 |
| Debt to Equity Ratio | 2.03 | 1.37 | 1.23 |
ANALYSIS:
- Revenue (total sales) has been growing every year from ₹134 Crores to around ₹194 Crores projected in FY24 showing good business growth.
- Profit after tax (money left after all expenses) increased a lot from ₹1.45 Crores in FY22 to ₹12.28 Crores projected for FY24, which means the company is making much more money now.
- EBITDA (earnings before interest, tax, depreciation) also increased sharply, showing the company’s operations are becoming more profitable.
- Profit Margins improved from just over 1% in FY22 to more than 6% projected in FY24. This means the company keeps more of each rupee earned as profit.
- ROCE measures how well the company uses its money to generate profits; it jumped to a strong 25.78%, indicating efficient use of capital.
- Debt to Equity Ratio has come down, showing the company is reducing its borrowings and becoming financially healthier.
Why Some Investors Like This SME IPO
- Established brand with over 27 years in the welding consumables market.
- Good profit growth and improving margins in recent years.
- Product range includes several types of electrodes and wires used by many industries.
- ISO-certified quality standards and modern manufacturing facilities.
- Strong distribution network across India.
Points that need caution:
- Heavy reliance on the domestic market which can affect business in a downturn.
- Some concentration of customers without long-term contracts.
- Labour-intensive operations with associated risks.
- The company has some borrowings with financial covenants to maintain.
- Dependence on third-party logistics for deliveries.
Frequently Asked Questions (FAQs) About SME IPOs
What is an SME IPO?
- An SME IPO is when a small or medium business sells shares to the public for the first time on a special exchange for small companies.
Who can invest in SME IPOs?
- Anyone with a demat account and PAN card can invest. Minimum amount is usually around ₹1 lakh or more per lot.
How is an SME IPO different from a normal IPO?
- SME IPOs are for smaller companies and get listed on SME platforms—mainboard IPOs are for bigger companies. SME IPOs have easier rules, smaller issue sizes, and higher lot sizes.
What are the benefits of investing in an SME IPO?
- You can invest in high-growth companies early.
- Potential for better returns if the company does well.
- Helps support small businesses in India.
What are the risks of SME IPOs?
- Smaller companies, so higher risk.
- Less information and history available.
- Shares may not be easily sold/less liquidity.
What is the minimum investment amount?
- Minimum application is usually ₹1 lakh. Higher than normal IPOs.
Where are SME IPOs listed?
- On dedicated platforms like NSE Emerge or BSE SME, not on regular exchanges.
What is market making in SME IPOs?
- Merchant bankers keep buying/selling shares for 3 years after listing to ensure liquidity.
Do SME IPOs have grading?
- No, IPO grading is not compulsory for SME IPOs.
What is underwriting in SME IPOs?
- 100% underwriting is required, meaning merchant bankers guarantee share sale.
How do I apply for an SME IPO?
- Open a demat account, go to your broker’s IPO section, pick the SME IPO, choose lots, enter UPI, approve payment, and wait for allotment.
How are shares allotted?
- If more people apply than shares available, a lottery decides who gets shares.
- Unsuccessful applicants get their money back.
What are capital gains tax benefits?
- Listed SME shares have lower capital gains tax rates than unlisted shares, if Securities Transaction Tax (STT) is paid.
How often do SME companies publish results?
- SME IPO companies publish half-yearly results, not quarterly.
Can I sell SME IPO shares immediately after listing?
- Yes, you can sell SME IPO shares once trading starts, but check liquidity.
What is the lot size in SME IPOs?
- Lot size is usually much bigger—single application may cost ₹1 lakh or more.
What happens if I only have an odd lot?
- Odd lot shares can only be sold to market makers on exchange, with a special declaration.
What documents are required for an SME IPO listing?
- Annual reports, audited financials, detailed disclosures, company conversion to public limited, compliance officer, independent directors, website, and legal checks.
Are suspended companies allowed on SME Exchange?
- No, only after suspension is revoked and trading is allowed on the main exchange.