Sunlite Recycling Industries Ltd. (SRIL) specializes in manufacturing a variety of copper products, including copper rods, wires, earthing strips, and conductors. The company stands out by using recycled copper scrap, making its production process both environmentally friendly and energy-efficient. SRIL’s offerings cater to diverse sectors such as power generation, transmission, distribution, and electronics. The company also provides job work services, converting customer-supplied copper scrap into customized copper products.
SRIL operates with a strong commitment to sustainability, utilizing solar energy and clean natural gas in its recycling process, which significantly reduces pollution compared to conventional methods. This eco-friendly approach aligns with the global trend of increasing copper recycling, which not only conserves natural resources but also demands far less energy than extracting copper from primary sources.
As of March 31, 2024, SRIL employed 38 full-time staff, supplemented by contract labor as needed. The company’s infrastructure includes 20 machines dedicated to producing a wide range of copper products, meeting the exact specifications of its clients.
SRIL is launching its initial public offering (IPO) through a book-building process, offering 2.88 million equity shares priced between INR 100 and INR 105 per share. The IPO is set to raise approximately INR 30.24 crore at the upper price band, with subscriptions open from August 12 to August 14, 2024. The minimum application is for 1,200 shares, and the shares will be listed on the NSE SME Emerge platform.
The proceeds from the IPO will primarily be used to repay certain borrowings (INR 15.80 crore), invest in new plant and machinery (INR 4.05 crore), and cover general corporate expenses. Post-IPO, SRIL’s paid-up equity capital will increase from INR 8 crore to INR 10.88 crore, giving the company a market capitalization of INR 114.24 crore at the upper price band.
SRIL has demonstrated steady growth over the last three fiscal years. In FY24, the company reported a total income of INR 1,166.55 crore and a net profit of INR 8.90 crore, reflecting a PAT margin of 0.76%. The company’s Return on Capital Employed (RoCE) improved to 29.49% in FY24. With an average EPS of INR 16.12 and an average RoNW of 79.92% over the past three years, SRIL’s IPO is priced at a P/E ratio of 12.84, which appears fully valued given its performance.
Operating in a competitive and fragmented market, SRIL has shown consistent growth in revenue and profits. However, the IPO is priced on the higher side, reflecting the company’s strong FY24 performance. Investors with a long-term perspective might find this a worthwhile addition to their portfolios, especially given SRIL’s commitment to sustainable practices and its growing scale of operations.
Read More: Facade Specialist Aesthetic Engineers Opens Doors with Promising IPO
X (formerly, Twitter) - Aayush Khanna