NARMADESH BRASS INDUSTRIES LIMITED IPO Explain

Narmadesh Brass Industries IPO Overview

Jamnagar (Gujarat)-based brass products manufacturer raising ₹44.86-45 cr (₹36 cr fresh issue + ₹8.78 cr OFS). Price: ₹515 (Fixed Price). Lot: 480 shares (₹2,47,200 min investment). GMP: Not yet started in grey market (as of Jan 2026).

Funds for debt repayment, machinery/equipment purchase, working capital, general corporate purposes (specific amounts not disclosed).

Lead: Aryaman Financial Services.

Registrar: Kfin Technologies.

Established August 2019 as partnership firm; converted to public limited October 2023 (only 7 years operations, 3 years as company!). ISO 9001:2015 certified facility in Jamnagar – India’s “Brass City”. 6,293 sq meter production area at 12,299 sq meter facility.

Products: Brass billets (78.09% capacity utilization FY25), brass rods (10.97% utilization), brass components (61.67% utilization) – collectively 96.55% of FY25 revenue. Applications: Ball valves, NRVs (non-return valves), plumbing/sanitary fittings, agricultural sprayer parts, electrical fittings, garden fittings, turning components. B2B model serving domestic industrial and graded customers + international exports.

Capacity: 4,320 MTPA brass billets, 4,320 MTPA brass rods, 1,600 MTPA brass components (installed capacity). Severe under-utilization: Rods only 10.97% utilized!

IPO DETAILED INFORMATION

Issue Details

Parameter	Details
IPO Type	SME (BSE SME)
IPO Open Date	12 January 2026 (Sunday)
IPO Close Date	15 January 2026 (Wednesday)
Anchor Investor Bidding	Data not specified
Allotment Date	16 January 2026 (Thursday) – Expected
Credit to Demat	17 January 2026 (Friday) – Expected
Refund Initiation	Data not specified
Listing Date	20 January 2026 (Monday) – Tentative
Price Band	₹515 per share (Fixed Price)
Face Value	₹10 per share
Lot Size	480 shares (minimum lot – some sources say 240, data variance)
Min Investment (Retail)	₹2,47,200 (480 shares at ₹515)
sNII Investment	Data not specified
bNII Investment	Data not specified
Issue Size	₹44.86-45 crore total (data variance: ₹42.52-45 cr across sources)
Fresh Issue	₹36 crore (80.2%) – 7,00,000 shares
Offer for Sale (OFS)	₹8.78 crore (19.6%) – 1,70,400 shares by promoters
Total Shares Offered	8,71,200 equity shares (some sources: 8,70,400 – minor variance)
Listing	BSE SME
Post-Issue Market Cap	Data not fully disclosed

Note: Issue size shows variance (₹42.52-45 cr) and lot size conflict (240 vs. 480 shares) across sources – data inconsistency requiring RHP verification.

Issue Break-up

Category	Allocation
QIB (Qualified Institutional Buyers)	0% – No QIB allocation
NII (Non-Institutional Investors)	47.38-50% (4,12,800 shares)
Retail Individual Investors	47.38-50% (4,12,800 shares)
Market Maker	5.23% (45,600 shares)

Note: No QIB allocation – unusual structure. NII and Retail almost equal at ~47-50% each.

Selling Shareholders (OFS ₹8.78 crore)

Promoters Selling 1,70,400 shares (19.6% of issue):

• M/s. Sprayking Limited – Corporate Promoter (partial exit)
• Mr. Hitesh Dudhagara – Promoter & Managing Director (partial exit)
• Mrs. Ronak Dudhagara – Promoter (partial exit)
• Mr. Krish Dudhagara – Promoter (partial exit data not confirmed)

Note: OFS represents 19.6% of total issue. Majority (80.2%) fresh capital for company. Promoters partially exiting after just 7 years operations (since 2019 partnership), 3 years as company (since 2023).

Objects of the Issue (Fund Utilization)

Fresh Issue Proceeds (₹36 crore) will be used for:

Specific amounts not disclosed in available public documents. General utilization:

1. Repayment/Prepayment of Outstanding Borrowings
   • Full or partial repayment of existing debt
   • Reduction of interest burden
   • Improving financial flexibility
2. Purchase of Machinery and Equipment
   • Advanced machinery for brass manufacturing
   • Technology upgrades for operational efficiency
   • Capacity expansion (though current capacity severely under-utilized!)
3. Funding Working Capital Requirements
   • Day-to-day operational expenses
   • Inventory management (brass, copper, zinc raw materials)
   • Managing receivables from B2B customers
4. General Corporate Purposes
   • Strategic initiatives
   • Business development
   • Offer-related expenses

Strategic Focus:

• MD Hitesh Dudhagara: “IPO proceeds will purchase advanced machinery, fund working capital, enhance manufacturing efficiency, expand production capacity, introduce new product lines”
• Lead Manager Shripal Shah (Aryaman): “Company well-positioned in growing brass industry with demand across plumbing, sanitary, industrial segments”
• CRITICAL CONCERN: Raising funds for machinery/capacity expansion when existing capacity severely under-utilized (brass rods only 10.97% utilized, components 61.67%)
• ISO-certified facility, quality/precision focus per management commentary

OFS Proceeds:

• ₹8.78 cr goes to promoters (Sprayking Ltd, Hitesh/Ronak/Krish Dudhagara) for partial liquidity

Note: 80% fresh issue vs. 20% OFS. Specific allocation breakdown for debt/capex/working capital not disclosed – major transparency gap.

Lead Managers & Registrar

Book Running Lead Manager (BRLM):

1. Aryaman Financial Services Limited
   • Address: 60, Khatau Building, Ground Floor, Alkesh Dinesh Modi Marg, Fort, Mumbai – 400001
   • Phone: +91 22 6216 6999
   • Website: www.afsl.co.in
   • Director: Shripal Shah

Registrar:

• Kfin Technologies Limited
  • Address: Selenium Tower-B, Plot 31 & 32, Gachibowli, Financial District, Nanakramguda, Hyderabad – 500032
  • Phone: +91 40 6716 2222 / 1800 309 4001
  • Website: www.kfintech.com

Promoters & Management

Key Promoters (4 Promoters – Dudhagara Family + Corporate):

Corporate Promoter:

1. M/s. Sprayking Limited – Corporate Promoter (Partial OFS participant)
   • Corporate entity associated with promoter group

Individual Promoters:

2. Mr. Hitesh Dudhagara – Promoter & Managing Director (Partial OFS participant)
   • Key operational leader and spokesperson for IPO
   • Oversees manufacturing, strategy, business development
3. Mrs. Ronak Dudhagara – Promoter (Partial OFS participant)
   • Co-promoter, family member
4. Mr. Krish Dudhagara – Promoter (mentioned in some sources)
   • Co-promoter, family member

Promoter Holding:

• Pre-IPO: Data not fully disclosed
• Post-IPO: Data not fully disclosed (dilution with 8.71 lakh shares issued)

Company History:

• Partnership Firm Established: August 2019 (7 years ago)
• Converted to Public Limited: October 2023 (only 3 years as company!)
• Operations: 7 years total (2019-2026); 3 years as Narmadesh Brass Industries Limited
• Evolution:
  • August 2019: Established as partnership firm in Jamnagar – India’s “Brass City”
  • Built 12,299 sq meter facility with 6,293 sq meter production area at Shree Ganesh Industrial Hub
  • Achieved ISO 9001:2015 certification for quality management
  • Installed capacity: 4,320 MTPA brass billets + 4,320 MTPA brass rods + 1,600 MTPA brass components
  • October 2023: Converted to public limited company
  • Developed product portfolio: billets, rods, valves, plumbing/sanitary fittings, agricultural parts, electrical fittings
  • Built B2B customer base: domestic industrial, graded customers, international exports
  • FY25: Revenue ₹88.05 cr (11% growth from ₹79.06 cr FY24), PAT declined 19% to ₹5.72 cr from ₹7.10 cr (FY24)
  • Capacity utilization challenges: Brass rods only 10.97% utilized (FY25), components 61.67%, billets 78.09%
• Workforce: Data not disclosed in available sources
• Milestone:
  • Revenue ₹88.05 cr (FY25), PAT ₹5.72 cr (FY25)
  • ISO 9001:2015 certified
  • Located in Jamnagar – India’s “Brass City”

Company Contact:

• Registered Office: Plot No. 5, 8 & 9, Survey No. 433, Shree Ganesh Industrial Hub, Changa Village, Jamnagar – 361012, Gujarat, India
• Phone: +91 028 95299401
• Website: www.narmadeshbrass.com

COMPANY DETAILS

Narmadesh Brass Industries Limited is a Jamnagar-based brass products manufacturer established as a partnership firm in August 2019 and converted to a public limited company in October 2023, making it only 7 years old with just 3 years of corporate entity track record. Operating from an ISO 9001:2015 certified 6,293 sq meter production facility in India’s “Brass City,” the company manufactures brass billets, brass rods, and brass components with installed capacities of 4,320 MTPA each for billets and rods, and 1,600 MTPA for components, serving domestic industrial customers and international markets through a B2B model.

Key Highlights:

• Very Young: Partnership since 2019 (7 years), company since Oct 2023 (3 years only!)
• Location: Jamnagar, Gujarat – India’s “Brass City” with large brass manufacturing cluster
• Product Concentration: 96.55% revenue from brass billets, rods, components (FY25) – extreme concentration
• Capacity: 4,320 MTPA billets, 4,320 MTPA rods, 1,600 MTPA components (installed)
• SEVERE Under-Utilization: Brass rods 10.97%, components 61.67%, billets 78.09% (FY25) – major red flag
• Declining Profitability: Revenue +11% (₹79.06 cr to ₹88.05 cr FY24-25) but PAT -19% (₹7.10 cr to ₹5.72 cr) – margin compression
• ISO 9001:2015: Quality management certification

Operations

Geographic Presence:

• Manufacturing: Jamnagar, Gujarat (Shree Ganesh Industrial Hub, Changa Village)
• Markets: Domestic B2B (industrial, graded customers) + International exports

Growth Trajectory:

• Revenue Growth (FY24-25): 11.37% YoY (₹79.06 cr to ₹88.05 cr) – modest single-digit growth
• PAT Decline (FY24-25): -19.44% YoY (₹7.10 cr to ₹5.72 cr) – profitability DECLINING despite revenue growth!
• Margin Compression: PAT margin fell from 8.98% (FY24) to 6.50% (FY25) – 248 bps erosion
• CRITICAL: Revenue growing but profit declining indicates severe margin pressure, rising costs, operational inefficiency

Company Strengths

1. Strategic Location – Jamnagar “Brass City” with Cluster Ecosystem:
   • Located in Jamnagar, Gujarat – recognized as India’s “Brass City”
   • Large cluster of brass manufacturing units providing supplier/vendor ecosystem
   • Access to skilled labor, raw material suppliers, logistics infrastructure
2. ISO 9001:2015 Certified – Quality Management System:
   • ISO 9001:2015 certification demonstrating commitment to quality standards
   • Process discipline and quality assurance for B2B industrial customers
   • Meeting customer requirements for certified suppliers
3. Diversified Product Portfolio – Billets, Rods, Components, Valves:
   • Brass billets, brass rods, brass components covering multiple applications
   • Valves (ball valves, NRVs), plumbing/sanitary fittings, agricultural sprayer parts, electrical/garden fittings
   • Reduces single-product dependency within brass segment
4. India’s Construction & Plumbing Boom – Demand Drivers:
   • Lead Manager: “Growing demand across plumbing, sanitary, and industrial segments”
   • Government’s housing initiatives (PM Awas Yojana), urbanization driving brass fittings demand
   • Infrastructure boom requiring valves, fittings, industrial brass components
5. Integrated Manufacturing – In-House Production Capabilities:
   • Manufacturing-led, volume-driven business model per company description
   • In-house production from billets to finished components reducing external dependencies
   • Established supplier relationships for raw materials (copper, zinc)
6. Export Presence – International Market Exposure:
   • Serves international markets alongside domestic customers
   • Export revenue providing geographic diversification and forex earnings
   • Global competitiveness in commodity brass products

Key Risks & Challenges

1. ONLY 7 YEARS OLD – Partnership 2019, Company Oct 2023 (3 Years!):
   • Established August 2019 as partnership – just 7 years total operations
   • Converted to public limited October 2023 – only 3 years as corporate entity!
   • Extremely limited track record, unproven long-term sustainability
   • Start-up risk very high despite ISO certification
2. PAT DECLINING 19% – ₹7.10 Cr to ₹5.72 Cr Despite 11% Revenue Growth:
   • Revenue grew 11% (₹79.06 cr to ₹88.05 cr FY24-25) but PAT fell 19% (₹7.10 cr to ₹5.72 cr)
   • PAT margin compressed from 8.98% to 6.50% – 248 bps erosion
   • Revenue growth not translating to profit – operational inefficiency, rising costs
3. SEVERE Capacity Under-Utilization – Brass Rods Only 10.97% Utilized!:
   • Brass rods: 10.97% capacity utilization (FY25) – 89% capacity IDLE!
   • Brass components: 61.67% utilization – 38% idle
   • Brass billets: 78.09% utilization – relatively better but still 22% idle
   • Raising IPO funds for “new machinery” when existing assets massively under-utilized is illogical
4. Commodity Price Volatility – Copper, Zinc, Brass Exposure:
   • Brass products highly sensitive to copper and zinc (base metal) price fluctuations
   • LME copper/zinc prices volatile based on global demand/supply
   • Limited pricing power in commodity market to pass on cost increases
   • Margin compression (FY25) likely reflects raw material cost pressures
5. Intense Competition – Hindalco, Rajesh Exports, Unorganized Players:
   • Competes with large integrated players: Hindalco Industries (copper/brass), Rajesh Exports (brass exports)
   • Thousands of small brass manufacturers in Jamnagar and other brass hubs
   • Commodity market with price-based competition limiting margins
6. No QIB Allocation, No GMP – Weak Institutional Interest:
   • 0% QIB allocation in IPO structure – no institutional investor participation
   • Grey Market Premium (GMP) not yet started – indicates lukewarm investor appetite
   • 19.6% promoter OFS after just 7 years raises exit timing questions

Disclaimer

Narmadesh Brass Industries Limited (partnership 2019, company Oct 2023 – only 7 years operations, 3 years corporate entity) manufactures brass billets/rods/components (96.55% revenue concentration) from Jamnagar “Brass City” ISO-certified facility with FY25 revenue ₹88.05 cr (+11%) but PAT declined 19% to ₹5.72 cr (margin compression 8.98% to 6.50%), severe capacity under-utilization (brass rods 10.97%, components 61.67%, billets 78.09%), yet raising funds for new machinery creating logic gap, faces risks: extremely short 7-year track record, declining profitability despite revenue growth, idle capacity while seeking capex, commodity price volatility (copper/zinc), intense competition, no QIB allocation + no GMP indicating weak demand, 19.6% promoter OFS after just 7 years. BSE SME listing.