IPO closes on 26 Sep'25
Jain Resource Recycling Ltd
Minimum Investment
₹ 14,848 / 64 shares
Our Verdict:
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- Jain Resource Recycling Ltd (JRRL) has shown strong revenue and earnings growth over the past three years, underpinned by industry-leading return metrics. The company is set to enhance its growth by commissioning new facilities for copper cathodes and allied products, which are expected to deliver higher value-addition and better operating margins compared to its existing business.
- In terms of valuation, the IPO appears reasonably priced with a P/E multiple of 32x based on FY25 earnings. This compares favorably with competitors such as Gravita India and Pondy Oxides & Chemicals, which operate in similar sectors.
- JRRL has established a diversified, export-oriented business model with lead and copper as its primary revenue drivers. Its large scale, global recognition, forward integration and prudent financial management enhance its growth potential. In an environment where India is increasingly focusing on recycling, sustainability and import substitution, JRRL is well-positioned to capitalize on rising demand.
- Considering these factors, investors may consider subscribing to the IPO with a long-term perspective.
About the company
Founded in
25 Feb'22
Managing director
Kamlesh Jain
- Founded in 1953 as a partnership firm, JRRL specializes in the recycling and manufacturing of non-ferrous metals, including lead, copper and aluminium. The company serves a wide range of industries, such as batteries, electronics, pigments and automotives.
- JRRL operates 3 strategically located recycling plants near the Chennai port, with a combined capacity of over 3,08,000 MTPA as of July 2025. This strategic positioning provides logistical advantages for both imports and exports. Additionally, the company’s lead products are recognized by the London Metal Exchange (LME), granting it global recognition and access to registered warehouses worldwide.
STRENGTHS
- Solid Performance: JRRL has demonstrated exceptional growth from FY23 to FY25, with operating revenue growing at a 53% CAGR, EBITDA rising by 72%, and net profit surging by 56%.
- Strong Return Metrics: JRRL boasts impressive return ratios, with a Return on Equity (ROE) of 40.77% and Return on Capital Employed (ROCE) of 24.22% in FY25—the highest in the sector. These figures reflect strong capital efficiency, despite the relatively thin operating margins typically seen in commodity-linked businesses.
- Customer Base with Global Reach: As of March 2025, JRRL serves 371 customers across more than 20 countries, demonstrating its strong global presence. Export revenues contributed to 60% of total revenue in FY25, with export revenues growing at a CAGR of 65% between FY23 and FY25.
- Client Loyalty: JRRL enjoys a 55% repeat order rate, which accounted for 84% of the total revenue in FY25. This highlights strong customer trust and long-term relationships.
- Deleveraging Strategy: JRRL has successfully reduced its debt/equity ratio from 2.95 in FY23 to 0.92 in FY25, with further reductions expected as the company plans to use proceeds from the IPO to further reduce debt. This deleveraging demonstrates management's commitment to reducing financial risk and strengthening its balance sheet.
- Diversification & Forward Integration: JRRL is set to enter its next growth phase by diversifying into higher-value copper products, including copper cathodes, wire rods and busbars. This move toward forward integration allows the company to transition from recycling basic non-ferrous scrap to producing finished products with higher value-addition. Sourcing feedstock from its existing recycling units ensures stability, while this forward integration helps JRRL capture a greater share of the value chain, enhancing its long-term competitiveness and improving margins.
RISK FACTORS
- Client Concentration: A significant portion of JRRL’s operating revenue comes from a small group of clients. In FY25, the top 5 clients contributed 43.64% of the total revenue, while the top 10 clients accounted for 58.40%. A loss or reduction in business from any of these key clients could substantially impact the company’s financial performance.
- Quality Compliance Risks: JRRL is subject to stringent quality standards and has faced cancellations of customer orders due to non-compliance in the past, with 11 orders in FY25, 29 in FY24 and 30 in FY23. Failure to meet these quality requirements could lead to further cancellations, harming the company’s reputation, cash flows and operational results.
- Supply Chain Dependence: JRRL relies on third-party suppliers for the scraps necessary for its operations, with ~75%–80% of scrap sourced from imports over the last three years. Disruptions in supply or price fluctuations could adversely impact operations, cash flows and financial performance.
- Cash Flow Concerns: JRRL has experienced negative cash flow from investing activities over the past three fiscal years. Prolonged negative cash flows could negatively affect its overall financial stability.
- Foreign Exchange Exposure: A significant portion of JRRL’s sales comes from exports, which made up 60.39% of total revenue in FY25. Additionally, the company imports a large portion of its raw materials. These transactions, denominated in foreign currencies, expose the firm to exchange rate risks related to receivables, payables, and international trade activities.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 1,250 crore
Fresh Issue
₹ 500 crore
OFS
₹ 750 crore
Price range
₹ 220 - 232
Lot size
64 shares
Issue Objective
The net proceeds from the fresh issue will be utilized for the following purposes:
- Repaying or pre-paying certain borrowings availed by the company; and
- General corporate purposes.
Dates
Bidding open
24 Sep'25
Bidding close
26 Sep'25
Allotment date
29 Sep'25
Refund date
30 Sep'25
Listing
1 Oct'25
IPO Reservations
Qualified institutional buyers
>75%
Non-institutional investors
<15%
Retail individual investors
<10%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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