Jain Resource Recycling
- Jain Resource Recycling is coming out with a 100% book building; initial public offering (IPO) of 5,68,18,181 shares of 2 each in a price band Rs 220-232 per equity share.
- Not more than 75% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 10% for the retail investors.
- The issue will open for subscription on September 24, 2025 and will close on September 26, 2025.
- The shares will be listed on BSE as well as NSE.
- The face value of the share is Rs 2 and is priced 110.00 times of its face value on the lower side and 116.00 times on the higher side.
- Book running lead managers to the issue are DAM Capital Advisors, ICICI Securities, Motilal Oswal Investment Advisor and PL Capital Markets.
- Compliance Officer for the issue is Bibhu Kalyan Rauta.
Profile of the company
Jain Resource Recycling is primarily focused on manufacturing of non-ferrous metal products by way of recycling of non-ferrous metal scrap. Its product portfolio comprises of (i) lead and lead alloy ingots; (ii) copper and copper ingots; and (iii) aluminium and aluminium alloys. The company’s lead ingot is registered as a brand by the London Metal Exchange which provides the company a distinct advantage of access to a broader customer base by offering products compliant with international quality standards along with the benefit of LME reference pricing with respect to supply of its products in global markets. It also partnered with M/s Ikon Square Limited UAE (SL), by way of acquiring 70% in Jain Ikon Global Ventures (FZC) a free zone company registered in Sharjah, UAE (JIGV), resulting JIGV in becoming its subsidiary. The acquisition was undertaken for the purposes of setting up its gold refining facility at Sharjah UAE that commenced refining of gold and its byproduct silver (Precious Metals) in the month of August 2024.
The company’s key raw materials include: (i) lead scrap rains, lead scrap rinks, lead scrap relay and lead scrap radio for lead products; (ii) copper scrap druid, copper scrap berry and copper scrap birch for copper products; (iii) aluminium scrap tread, aluminium scarp talon and aluminium scrap tense for aluminium products. Further, the company operates through its three recycling facilities located at SIPCOT Industrial Estate, Gummidipoondi, Chennai engaged in recycling: (i) copper scrap birch and copper scrap druid (Facility 1); (ii) lead scrap including lead scrap radio, lead scrap relay, lead scrap rains, lead scrap rinks and copper scrap including copper scrap birch, copper scrap druid, (Facility 2); and (iii) aluminium scrap including aluminium scrap tread, aluminium scarp talon and aluminium scrap tense (Facility 3 and collectively with Facility 1 and Facility 2 referred to as Recycling Facilities).
The company caters to customers in various industries including lead acid battery, electrical and electronics, pigments, and automotive. The company clientele includes Vedanta Limited-Sterlite Copper, Luminous Power Technologies Private Limited and Yash Resources Recycling Limited and global customers such as Mitsubishi Corporation RtM Japan and Nissan Trading Co. It caters to both international and domestic markets.
Proceed is being used for:
- Pre-payment or scheduled re-payment of a portion of certain outstanding borrowings availed by the company
- General corporate purposes
Industry Overview
Currently estimated at 45 million tonne, the global non-ferrous metals recycling market is a vital arm of the metal recycling industry. It mainly encompasses metals such as aluminium, copper, lead and zinc. The promising growth shown by the industry in recent years is driven by sustainable practices, environmental regulations and a strong demand from multiple sectors, particularly automotive, construction and electronics. Meanwhile, metal recycling in India is poised to undergo a significant transformation, driven by the government's commitment to reducing industrial waste and promoting sustainable practices. India's metals recycling rates may appear high, but a closer look reveals a concerning reality. Most of the remelted copper is used to produce rods and billets, primarily for the electrical and electronics segment. However, the country's recycling process is largely focused on direct melting of scrap, resulting in variable copper purity due to the use of diverse scrap types. This approach raises quality concerns, particularly regarding tramp elements in conductor applications.
The three non-ferrous metals - copper, zinc, and aluminium - are highly valued for their unique properties, making them essential for various applications. As the demand for energy-transition metals surges, significant investments in recycling will be necessary to alleviate the primary metal supply constraint, a major barrier in energy transition. The need for metal recycling is pressing, as the industry is a significant contributor to greenhouse gas emissions. Steel and aluminium, in particular, together account for nearly 10% of global emissions. However, recycling offers a promising solution, with secondary aluminium production resulting in a carbon footprint 5-25 times lower than primary production, and scrap-based steel production reducing emissions by about 50%.
The Indian government's latest directive, the Hazardous and Other Wastes (Management and Transboundary Movement) Second Amendment Rules, 2024, is a significant step towards promoting metal recycling in the country. Effective from April 1, 2025, these regulations not only require non-ferrous metal producers to incorporate a specified percentage of recycled content in their products, but also introduce an extended producer responsibility (EPR) framework to ensure the environmentally sound management of scrap metals, with EPR certificates allowing producers to trade and meet their recycling targets. The EPR framework has the potential to inspire new business models, enabling companies to reap both economic and environmental benefits. Proper implementation of these regulations should reduce the country's dependence on primary resources, mitigate the environmental impacts of mining and create new opportunities within the recycling industry, generating employment and advancing India's fight against climate change.
Pros and strengths
Track record of profitability and consistent financial performance: The Jain Metal Group is engaged in the recycling and production of non-ferrous metals in India. The company’s lead ingot is registered as a brand by the London Metal Exchange and its brand name “JAIN 9998” is accepted as a registered brand of refined lead by the Multi Commodity Exchange (MCX) in India, towards the settlement of lead contracts traded on MCX. In Fiscal 2025, JMG achieved a 60.91% year-on-year increase in revenue from operations in addition to the highest EBITDA growth of 62.22% which demonstrated a robust CAGR of 72.29%, expanding to Rs 3,685.82 million in Fiscal 2025 from Rs 1,241.76 million in Fiscal 2023. Further, in Fiscal 2025, JMG recorded the highest PAT growth at 36.29% year-on-year wherein JMG’s PAT rose sharply to Rs 2,232.87 million from Rs 1,638.27 million.
Strategically located Recycling Facilities with capabilities to handle multiple products lines: The company conducts its recycling operations at three Recycling Facilities in India located at SIPCOT Industrial Estate, Gummidipoondi, Chennai spread across 26.94 acres of leased land providing it the benefit of integrated and centralized operations. The strategic location of Recycling Facilities offers it the benefit of utilizing various by-product of one facility as raw materials for another facility in addition to the ability to utilize common capabilities including laboratory infrastructure, technical know-how etc. The value of captive consumption of the by-products was Rs 439.27 million, Rs 321.80 million and Rs 646.95 million for Fiscal 2025, Fiscal 2024 and Fiscal 2023 respectively constituting 0.62%, 0.73% and 2.11% of the total revenue from operations for such periods.
Strong customer base with global footprint and deep sourcing capabilities: The company has an established presence in international markets. Its capabilities enable it to serve various customers in international markets with significant portion of its revenue being generated from export of its products to more than 20 countries as on March 31, 2025 including China, Singapore, South Korea, UAE, Taiwan, Japan, etc. Its revenues from exports grew at a CAGR of 64.93% between Fiscals 2023 and Fiscal 2025 to Rs 43,033.25 million in Fiscal 2025 as compared to Rs 15,820.73 million in Fiscal 2023. The company generated revenue of Rs 43,033.25 million, Rs 23,960.22 million and Rs 15,820.73 million from its export sales as on for Fiscals 2025, 2024 and 2023 respectively, which represented 60.39%, 54.11% and 51.63% of its revenue from operations for the respective periods.
Application of hedging mechanism for commodity price risk protection for products: The company’s business operations are directly impacted by fluctuations in the prices of base metals traded on the London Metal Exchange (LME). Price increase or decrease in these metals can significantly affect its profitability. For the purposes of safeguarding its financial position against this price volatility, it utilizes hedging exclusively within the metals market by entering into futures derivative contracts on the LME. Hedging is a risk management strategy that allows businesses to protect themselves from the financial impact of price fluctuations in the markets. Specifically, in the metals industry, hedging involves using financial instruments like futures contracts to mitigate the risk posed by volatile commodity prices. This enables companies to stabilize their financial performance by offsetting potential losses from price movements in base metals.
Risks and concerns
Maximum revenue comes from limited customers: The company has historically derived a significant portion of its revenue from top customers. The company has garnered 58.40%, 57.26% and 51.59% of its revenue from top 10 customers in FY25, FY24 and FY23 respectively. Although the company does not have long form contracts with majority of its top customers and does not have experience customer concentration risk for its revenue from operations. It cannot assure that it will be able to maintain its historic levels of business from its top customers that it will be able to significantly reduce client concentration in the future.
Dependent on third party suppliers for the supply of scraps: The company is dependent on third party suppliers for the supply of scraps required for its business operations. Approximately 75%-80% of its total scrap requirement is imported, based on the average of its procurement data for the last three financial years. Any disruptions in the supply or availability of the scraps or fluctuations in their prices may have an adverse impact on its business operations, cash flows and financial performance.
Geographical concentration of its Recycling Facilities: In India, the company presently operate through its three Recycling Facilities and one Segregating Facility. Its Recycling Facilities and Segregating Facility are present in a key cluster in south India. These facilities of the company are in Tamil Nadu at SIPCOT Industrial Estate, Gummidipoondi, Chennai and. Annekollu Village, Krishnagiri District, respectively Due to the geographic concentration of its recycling and manufacturing operations primarily in Tamil Nadu, India, its operations are susceptible to local and regional factors, such as accidents, system failures, economic and weather conditions, natural disasters, and demographic and population changes, and other unforeseen events and circumstances.
Exposed to risks associated with foreign exchange rate fluctuations: The company’s financial information is presented in Indian Rupees. However, it generates a significant portion of its sales internationally through export and sales outside of India. For Fiscals 2025, 2024 and 2023, its revenue from operations from outside India constituted 60.39%, 54.11% and 51.63% of its total revenue from operations Fiscals 2025, 2024, and 2023, respectively. It also imports raw materials for its operations and its cost of raw materials consumed as a percentage of the total revenue from operations for Fiscals 2025, 2024, and 2023 was 90.41%, 91.31%, and 90.39% respectively. These imports and exports are denominated in foreign currencies, primarily in U.S. dollars and EUROs. Its global operations expose it to foreign exchange rate risks, arising primarily from its receivables, payables, export and import of goods. There can be no guarantee that such fluctuations will not affect its financial performance in the future as it continues to expand its operations globally.
Outlook
Jain Resource Recycling is engaged in the recycling and manufacturing of non-ferrous metal products. Its product portfolio includes lead and lead alloy ingots, copper and copper ingots, and aluminium and aluminium alloys. The company has track record of profitability and consistent financial performance in an industry with significant entry barriers. On the concern side, the company has historically derived a significant portion of its revenue from its top customer. The loss of any of these customers may adversely affect its revenues and profitability. Moreover, a substantial portion of the company’s revenue is derived from the sale of its key products, namely Lead and Lead Alloy Ingots and Copper and Copper Ingots. Any loss of sales due to reduction in demand for these products could adversely affect its business, financial condition, results of operations and cash flows.
The issue has been offering 5,68,18,181 shares in a price band of Rs 220-232 per equity share. The aggregate size of the offer is around Rs 1250.00 crore to Rs 1318.18 crore based on lower and upper price band respectively. Minimum application is to be made for 64 shares and in multiples thereon, thereafter. On performance front, the company’s revenue from operations rose by 60.91%, from Rs 44,284.18 million in Fiscal 2024 to Rs 71,257.68 million in Fiscal 2025. The growth was mainly driven by a 65.64% increase in sales of copper and copper ingots and a 35.43% increase in sales of lead and lead alloy ingots due to higher customer demand. Moreover, the company’s profit after tax for the year increased by 36.29% from Rs 1,638.27 million in Fiscal 2024 to Rs 2,232.87 million in Fiscal 2025.
The company aims to expand its product offerings by expanding into copper cathode, the purest form of copper, wire rod and copper busbar manufacturing business (New Project) thereby increasing its ability to cater to a more diversified consumer base and enlarging the value chain in the business. Under the New Project, copper cathode shall be produced from recycled copper materials by removal of fringe metallic impurities by way of electrolytic refining and subsequently converting the copper cathode into high-quality copper wire rod. The New Project is proposed to be implemented in phased manner with the capital expenditure to be met out of internal accruals. Such forward integration strategy shall not only strengthen its position in the copper recycling value chain but also caters to the growing demand within the wire industry.
