Prime Cable NSE SME IPO review (Not Rated)

•    The company is engaged in the manufacturing and marketing of cables and wires under its own brand names i.e., “PRIMECAB” and “RENUFO”.
•    The company marked growth in its top and bottom lines, but quantum jump in its bottom line in a pre-IPO year appears to be a window dressing to fetch fancy valuations.
•    It is operating in a highly competitive and fragmented segment.
•    Small paid-up capital post-IPO indicates longer gestation period.
•    Only well-informed/cash surplus/risk seekers may park moderate funds for medium term.

ABOUT COMPANY:
Prime Cable Industries Ltd. (PCIL) is engaged in the manufacturing and sale of cables and wires for the past 17 years. It manufactures low voltage (up to 1.1 KV) control cables, power cables, aerial bunch cables, instrumentation cables, housing/building wires and conductors catering to several institutions which includes EPC players, electricity boards, public sector undertakings responsible for generation, transmission and distribution of power (transmission, distribution and generation), oil & gas, mining, steel, real estate, electric panel builders, etc. 

The company generally procure orders directly from non-government clients, government entities directly through the vendor approval process and also on open or limited tender basis. It is an ISO and BIS certified company which manufacture and sell cables primarily under own brand i.e., “PRIMECAB” and “RENUFO”.

The Company manufactures control cables, power cables, aerial bunch cables, instrumentation cable,
housing/building wires and conductors at its manufacturing units located at Narela, Delhi and Alwar, Rajasthan. It has an internal approved vendor list of suppliers which quality team approves. As of August 31, 2025, it had 152 employees on its payroll. As of the said date, it had an order book worth Rs. 84.27 cr.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its book building route maiden combo IPO worth Rs. 40.01 cr. (approx. 4820800 equity shares at the upper cap). The IPO consists of fresh equity shares worth Rs. 35.02 cr. (approx. 4219200 equity shares at the upper cap), and an Offer for Sale (OFS) worth Rs. 4.99 cr. (approx. 601600 equity shares at the upper cap). The company has announced a price band of Rs. 78 – Rs. 83 per share of Rs. 5 each. The IPO opens for subscription on September 22, 2025, and will close on September 24, 2025. The minimum application to be made is for 3200 shares and in multiple of 1600 shares thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. The issue constitutes 26.31% of post-IPO paid-up equity capital of the company. From the net proceeds of the fresh issue, the company will utilize Rs. 14.46 cr. for capex on construction, plant and machinery, Rs. 4.48 cr. for repayment/prepayment of certain borrowings, Rs. 7.06 cr. for working capital, and the rest for general corporate purposes.

The IPO is solely lead managed by Indorient Financial Services Ltd., while Skyline Financial Services Pvt. Ltd., is the registrar to the issue. Alacrity Securities Ltd., is the market maker. 

The company has issued/converted initial equity shares at par, and issued further equity shares in the price range of Rs. 60.00 – Rs. 200.00 between March 2010, and April 2025. It has also issued bonus shares in the ratio of 1 for 1 in March 2025.The average cost of acquisition of shares by the promoters/selling stakeholders is Rs. 0.45, Rs. 1.33, Rs. 1.59, and Rs. 1.85 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 7.05 cr. will stand enhanced to Rs. 9.16 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 152.06 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted total Income/Net Profit of Rs. 73.73 cr. / Rs. 0.12 cr. (FY23), Rs. 82.74 cr. / Rs. 1.79 cr. (FY24), and Rs. 141.11 cr. / Rs. 7.50 cr. (FY25). Mega fold surge in its bottom line for FY25 raise eyebrows and concern over its sustainability as it is operating in a highly competitive and fragmented segment. Its debt-equity ratio at 2.63 raise alarm.

For the last three fiscals, the company has reported an average EPS of Rs. 2.98, and an average RoNW of 44.59%. The issue is priced at a P/BV of 7.81 based on its NAV of Rs. 10.63 as of March 31, 2025, and at a P/BV of 2.93 based on its post-IPO NAV of Rs. 28.34 per share (at the upper cap).

If we attribute its FY25 earnings on post-IPO expanded equity base, then the asking price is at a P/E of 20.24, and based on its FY24 earnings, the P/E stands at 84.69. Thus, based on its recent financial data, the issue appears aggressively priced.

The company has posted PAT margins of 0.17% (FY23), 2.16% (FY24), 5.32% (FY25), and RoCE Margins of 8.43%, 10.61%, 25.96%, respectively for the referred periods. 

DIVIDEND POLICY:
The company has not declared any dividends since incorporation.  However, it has already adopted a prudent dividend policy in April 2025, based on its financial performances and future prospects.

COMPARISON WITH LISTED PEERS:
As per offer document, the company has shown V-Marc, Dynamic Cables, and Ultracab (India), as its listed peers. They are currently trading at a P/E of around 29.6, 29.0, and 13.2 (as of September 18, 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 13th mandate from Indorient Financial in the last six fiscals (including the ongoing one). Out of last 12 listings, 3 opened at discount, and the rest with premium ranging from 0.12% to 90% on the date of listing.