Classic Electrodes IPO: ₹156 Cr Market Cap & Welding Profits Hotter Than the Arc
1. At a Glance
Classic Electrodes wants you to pay nearly ₹2.62 lakh minimum to join their IPO buffet of welding rods and MIG wires. It’s a ₹41.5 crore issue, 100% fresh capital – so no promoters running away with cash, just asking you to fund their next machine purchase and loan repayments. Promoters drop from 97.7% to 71.7%, but don’t worry – they’ll still control the switch on your financial current.
2. Introduction
Imagine being born in 1997, not as a boyband, but as a welding consumables company in Kolkata. For nearly three decades, Classic Electrodes has supplied India with the unglamorous but absolutely necessary stuff – electrodes, MIG wires, and R&D-backed consumables that keep bridges standing, factories running, and your neighbor’s auto-rickshaw still welded together.
This IPO lands in SME land, where lot sizes are so big they look like HNI entry tickets. Minimum 3,200 shares = ₹2.78 lakh. So unless you can casually cough up a BMW down payment for the joy of holding “welding stock,” this one is already elitist.
But the anchor investors seem convinced – they’ve pumped in ₹11.7 crore on Day -1. With that, Classic is promising capex, debt repayment, and working capital stability. Translation: “We need new toys, fewer EMIs, and more cash buffer.”
3. Business Model (WTF Do They Even Do?)
Classic Electrodes’ gig is simple: they make welding consumables – electrodes for mild steel, stainless steel, cast iron, deep penetration jobs, plus MIG wires. Customers? Industrial plants, engineering firms, infrastructure projects.
They have two operational units – Dhulagarh (WB) and Jhajjar (Haryana). Bahadurgarh (Unit III) shut shop in FY24 – proving even welding can’t fix a bad plant.
Products aren’t FMCG glamorous; no potato chips here. But they’re sticky: once industries trust your quality, they rarely switch, unless you botch supply. They ride on certifications, dealer networks, and R&D tinkering that makes their rods stronger, longer-lasting, and less prone to spark tantrums.
So the model is: manufacture → distribute through dealers → steady repeat orders → maintain margins → beg bankers and IPO investors for capital when needed.
4. Financials Overview
Here’s how their earnings arc looks:
Metric
Feb 2025 (₹ Cr)
FY24 (₹ Cr)
YoY %
Revenue
187.9
194.4
-3.4%
EBITDA
19.2
23.0
-16.5%
PAT
9.6
12.3
-22.3%
EPS (₹)
9.3
12.0
-22.5%
Annualised post-issue EPS = ₹5.81 → Post IPO P/E = 15x. Auditor’s joke: “Profits dipped in FY25, but hey, as long as sparks are flying, optimism burns bright.”
5. Valuation (Fair Value Range Only)
Three styles, like three welding rods:
P/E Method Post-issue EPS = ₹5.81. Peer range = 12–18x. FV range = ₹70 – ₹105.
EV/EBITDA EV ≈ MCap (₹156 Cr) + Debt (₹54 Cr) – negligible cash = ₹210 Cr. EV/EBITDA ≈ 10.9x vs industry 8–12x. FV range = ₹80 – ₹100.
