New Delhi, September 1(HS):

Classic Electrodes, a manufacturer of welding consumables, made a premium debut on the stock market today, initially delighting its IPO investors. The company’s shares, issued at ₹87 each in the IPO, listed on NSE’s SME platform at a strong premium of 14.94%, opening at ₹100. However, this enthusiasm was short-lived as selling pressure soon set in, dragging the stock down to its lower circuit level of ₹95 within moments of trading. Despite this drop, IPO investors still stand to gain approximately 9.91% on day one.

The ₹41.51 crore IPO, open for subscription from August 22 to 26, received an overwhelming response, being oversubscribed 179.97 times overall. The qualified institutional buyers (QIB) segment was subscribed 84.88 times, non-institutional investors (NII) 356.75 times, and retail investors 158.44 times. Under the IPO, 47,71,200 new shares with a face value of ₹10 each were issued. The funds raised will be used for acquiring new machinery and plants, reducing old debts, strengthening working capital, and general corporate purposes.

Financially, the company has shown robust growth, with net profits rising from ₹1.49 crore in FY 2022-23 to ₹2.08 crore in FY 2023-24, and surging to ₹12.30 crore in FY 2024-25. Revenue grew at a strong compound annual growth rate (CAGR) of over 19%, reaching ₹194.41 crore. However, the company’s debt has escalated steadily, from ₹40.21 crore in FY 2021-22 to ₹53.50 crore by February 2025.

This initial volatility reflects a common pattern of profit booking after a strong listing, but the company’s strong financial trajectory and strategic plans present a promising outlook for investors.

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Hindusthan Samachar / Jun Sarkar