Jain Resource Recycling IPO: Riding the Recycling Supercycle – Should You Subscribe?

Jain Resource Recycling IPO-analysis ">IPO analysis

Jain Resource Recycling IPO: Riding the Recycling Supercycle – Should You Subscribe?

Price band set at Rs 220–232 per share; IPO opens September 24, 2025, closes September 26, 2025, tentative listing October 1, 2025 (NSE & BSE).

At a Glance

Company and its Business Operations

Jain Resource Recycling Limited (JRRL) is India’s largest and fastest-growing non-ferrous metal recycler, with integrated facilities across lead, copper and aluminium and trading of non-ferrous scrap. The group’s roots date to the 1950s; the company converted from a partnership to a private company in February 2022 and to a public company in February 2025. Operations are vertically integrated with sourcing from 120+ countries and exports/imports to 50+ countries. JRRL is among the top ten global recycling players by presence, and holds an MCX-approved refined lead brand; equity shares were split to Rs 2 face value in March 2025.

Industry Outlook

India’s metals recycling outlook is buoyed by policy thrust (Steel Scrap Recycling Policy, vehicle scrappage, EPR) and end-market demand from autos, electronics, construction and renewables. CRISIL notes metal recycling is integral to resource security; per-capita copper demand is set to rise in India. In plastics, India’s recycled output is projected to rise at an 11–12 per cent CAGR to 18–19 million tonnes by 2030, signalling tailwinds for broader recycling ecosystems and allied metals. Globally, recycling saves significant energy (e.g., aluminium ~95 per cent vs. primary). These drivers support TAM expansion and multi-year growth for organised recyclers.

Objects of the Issue

The company proposes to utilise the net proceeds from the fresh issue towards the following:
- Pre-payment/scheduled repayment of certain outstanding borrowings – Rs 375.00 crore.
- General corporate purposes – Rs 125.00 crore.
(Total fresh issue: Rs 500.00 crore within overall issue size Rs 1,250.00 crore.)

SWOT Analysis

Strengths:
- Largest organised non-ferrous recycler in India; diversified across lead/copper/aluminium; strong global sourcing (120+ countries); integrated operations; improving ROCE (24.22 per cent FY25).

Weaknesses:
- Thin EBITDA (≈5.17 per cent FY25) and PAT margins (≈3.13 per cent); working capital intensity; exposure to commodity prices and forex.

Opportunities:
- Policy push for circular economy and EPR; rising domestic consumption of copper/aluminium; expansion into e-waste/plastics; debt reduction from IPO improves ratios.

Threats:
- Price volatility in LME-linked metals; environmental/ESG compliance risks; global trade/tariff changes; competition from Gravita/POCL.

Financial Performance

(a) Profit & Loss

(b) Balance Sheet

(c) Working Capital & Cash Flow

Outlook & Relative Valuation

Jain Resource Recycling Ltd (JRRL), post-IPO, is positioned strongly within the lead recycling and metal recovery sector. With an ROE of 39 per cent and ROCE of 27.2 per cent, it is clearly more efficient in deploying capital compared to peers Gravita India (ROE 21.2 per cent, ROCE 21.5 per cent) and Pondy Oxides (ROE 13.7 per cent, ROCE 16.9 per cent). This suggests robust profitability and superior capital productivity. Its ROA at 13.3 per cent also indicates efficient asset utilisation.

However, the debt-to-equity ratio at 1.15 is significantly higher than peers (Gravita 0.14, Pondy 0.17), implying elevated financial leverage. This could magnify returns but also adds risk in periods of earnings volatility. Sustainability of margins and prudent debt management will be key watchpoints.

The industry tailwinds from increasing recycling demand, regulatory push for sustainable practices, and growing consumption of lead-based products support JRRL’s medium-term growth.

Recommendation

Subscribe. JRRL offers category leadership, improving capital efficiency and policy tailwinds. Valuations (~35.86x post-issue P/E) are not cheap versus metals recyclers, but debt reduction and scale provide a cushion. Suitable for investors with a 2–3 year horizon who can tolerate commodity-cycle and working-capital volatility.