Jain Resource Recycling IPO: Should you apply?

Summary: Jain Resource Recycling, a company engaged in the recycling and manufacturing of non-ferrous metals, is going public. Despite its strong financials, the company is prone to both micro and macroeconomic risks. Let’s check whether you should subscribe to its IPO.

The Jain Resource Recycling IPO (initial public offering) will open for subscription on September 24, 2025 and close on September 26, 2025. The non-ferrous recycling and manufacturing player aims to raise Rs 500 crore through a fresh issue and Rs 750 crore via an offer for sale (OFS).

We break down the company’s business, financials, strengths, risks and valuation to help you make an informed investing decision.

What the company does

Jain Resource Recycling, part of the Jain Metal Group, is engaged in recycling and manufacturing non-ferrous metals such as lead, copper and aluminium. Its lead ingots carry London Metal Exchange registration, giving it global market access with benchmark pricing and quality credibility. The company also undertakes limited trading in non-ferrous metals and commodities. 

As of July 31, 2025, the company’s recycling facilities had a combined production of 64,619 MTPA (metric tonnes per annum), while the Hosur facility contributed 88 MTPA.

Track record and valuation

A quick look at its financials shows that Jain Resource Recycling has posted strong numbers in recent years. Between FY23 and FY25, its revenue zoomed nearly 53 per cent annually, while profit after tax (PAT) jumped 56 per cent. Though its debt also rose, the growth was much slower at just 12 per cent. Such high numbers can primarily be attributed to the company’s rising export volumes and strong domestic and global footprint.

At the upper end of the price band (Rs 232), the stock is expected to be valued at nearly 36 times its FY25 earnings and 6.5 times the book value. In comparison, Jain Resource Recycling’s peers trade at a median P/E of around 46 times and an average P/B of 5.8 times, indicating that the company is undervalued.

The good

Below are some of the strengths of Jain Resource Recycling.

#1 Consistent track record

Jain Metal Group is engaged in recycling and producing non-ferrous metals, with its lead ingots registered on both the London Metal Exchange and MCX under the ‘JAIN 9998’ brand.

The company has delivered strong growth, with revenue from operations rising to Rs 7,126 crore in FY25, representing a 61 per cent year-on-year increase. Gross profit margins improved from 5.3 per cent in FY23 to 6.3 per cent in FY25, while PAT climbed to Rs 223 crore in FY25, reflecting consistent profitability and scale.

#2 Strong global presence

The company has built a strong export-driven franchise, serving customers across more than 20 countries, including China, Singapore, South Korea and Japan. Exports contributed over 60 per cent of revenue in FY25, rising sharply to Rs 4,300 crore from Rs 1,582 crore in FY23, reflecting a robust 65 per cent annual growth rate.

The bad

Despite its impressive financials and global footprint, Jain Resource Recycling faces certain challenges.

#1 Heavy reliance on lead and copper sales

A large part of Jain Resource Recycling’s revenue depends on lead and copper products, which together contributed over 84 per cent of sales in FY25. Thus, any drop in demand, customer shift to competitors or substitutes, could materially impact its business, margins and cash flows. 

#2 High dependence on a few customers without long-term contracts

Jain Resource Recycling derives a significant share of its revenue from a limited number of customers, without long-term contracts. For instance, in FY25, its top five and 10 customers contributed nearly 44 and 58 per cent to its core revenue. Losing any of these key relationships could hurt its revenue and profitability.

#3 Supply and price volatility risks

The company relies heavily on third-party scrap suppliers, with 75-80 per cent of its requirement imported over the past three years. Any disruption in supply or price swings could hurt operations, cash flows and competitiveness. Its key raw materials include lead, copper and aluminium scrap in various forms.

Where will the IPO proceeds go?

Of the fresh issue size of Rs 500 crore, Jain Resource Recycling will use Rs 375 crore to repay its debts, while the remaining funds will be allocated for general corporate purposes.

So, should you apply for the Jain Resource Recycling IPO?

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