JD Cables BSE SME IPO review (Not Rated)

•    The company is engaged in the manufacturing of cables and conductors of various types from aluminium.
•    The company posted growth in its top and bottom lines. 
•    Superb performance for FY25 appears to be a window dressing to fetch fancy valuations for the IPO.
•    Based on its recent financial data, the IPO appears aggressively priced.
•    Only well-informed/cash surplus/risk seekers may park moderate funds for medium term.

ABOUT COMPANY:
JD Cables Ltd. (JCL) is engaged in manufacturing of Cables and Conductors which widely include manufacturing of Power Cables, Control Cables, Aerial Bunched Cables, Single-core service wire and All Aluminium Conductor (A.A.C.), All Aluminium Alloy Conductor (A.A.A.C.), Aluminium conductor steel reinforced (A.C.S.R.) Conductors used for transmission and distribution of electricity. 

Its products adhere to national quality standards and are widely used in the electrical industry. It has obtained ISO 9001:2015, IS 398: PART 2 :1996, IS 694: 2010, IS 1554: PART 1 :1988, IS 7098: PART 1 :1988, IS 14255: 1995, ISO 9001:2015 Certificates for manufacturing of wires, cables & conductors. The Company is an approved vendor for various State Electricity Boards. Its supply network spans across multiple states, including Assam, Odisha, Jharkhand, Bihar, Manipur, Tripura, Arunachal Pradesh, Madhya Pradesh, Chhattisgarh, Meghalaya, Mizoram and West Bengal. JCL’s manufacturing facility in West Bengal is equipped with modern infrastructure, cutting-edge machinery, and a well-equipped test laboratory, ensuring the production of high-quality products. As of the date of filing this offer document, it had 32 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its book building route maiden combo IPO of 6315200 equity shares to mobilize Rs. 95.99 cr. (at the upper cap). The company has announced a price band of Rs. 144 – Rs. 152 per share of Rs. 10 each. The IPO consists of 5553600 fresh equity shares (worth Rs. 84.41 cr. at the upper cap), and an Offer for Sale (OFS) of 761600 equity shares (worth Rs. 11.58 cr. at the upper cap). The IPO opens for subscription on September 18, 2025, and will close on September 22, 2025. The minimum application to be made is for 1600 shares and in multiple of 800 shares thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 28.00% of post-IPO paid-up equity capital of the company. From the net proceeds of the issue, the company will utilize Rs. 45.00 cr. for working capital, Rs. 26.00 cr. for repayment/prepayment of certain borrowings, and the rest for general corporate purposes.

The IPO is solely lead managed by GYR Capital Advisors Pvt. Ltd., while MUFG Intime India Pvt. Ltd. is the registrar to the issue. Giriraj Stock Broking Pvt. Ltd. is the market maker. GYR Capital is a syndicate member, and Intellect Stock Broking Ltd. is a sub-syndicate member.

The company has issued initial equity shares at par, and issued further equity shares in the price range of Rs. 1034 – Rs. 38545 per share between March 2024 and April 2025. It has also issued bonus shares in the ratio of 330 for 1 in June 2025. The average cost of acquisition of shares by the promoters/selling stakeholders is Rs. 1.26 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 17.00 cr. will stand enhanced to Rs. 22.55 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 342.78 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted total revenue/Net Profit of Rs. 40.86 cr. / Rs. 0.32 cr. (FY23), Rs. 100.85 cr. / Rs. 4.58 cr. (FY24), Rs. 250.70 cr. / Rs. 22.15 cr. (FY25). The quantum jumps in top lines from FY24 and boosted performance for FY25 appears to have been cooked up to fetch fancy valuations. It is operating in a highly competitive and fragmented segment. Its debt-equity ratio of 1.53 as of March 31, 2025 raise concern.

For the last three fiscals, the company has reported an average EPS of Rs. 8.28, and an average RoNW of 60.95%. The issue is priced at a P/BV of 8.39 based on its NAV of Rs. 18.12 as of July 31, 2025, but its post-IPO NAV data is missing from the offer documents.

If we attribute its FY26 super annualized earnings on post-IPO expanded equity base, then the asking price is at a P/E of 15.48, and based on its FY25 earnings, the P/E stands at 74.88. Thus, based on its recent financial data, the issue appears aggressively priced.

The company has posted PAT margins of 0.78% (FY23), 4.54% (FY24), 8.84% (FY25), and RoCE Margins of 15.40%, 27.85%, 43.64%, respectively for the referred periods. 

DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy, based on its financial performances and future prospects.

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown Dynamic Cables, as its listed peer. It is currently trading at a P/E of around 29.2 (as of September 12, 2025). However, they are not truly comparable on an apple-to-apple basis. This compare appears to be an eyewash.

MERCHANT BANKER’S TRACK RECORDS:
This is the 48th mandate from GYR Capital in the last five fiscals (including the ongoing one). Out of last 10 listings, 1 opened at par, and the rest with premium ranging from 4.18% to 90.00 % on the date of listing.