Nupur Recyclers coming with an IPO to raise upto Rs 34 crore

Nupur Recyclers

• Nupur Recyclers has come out with an initial public offering (IPO) of 57,00,000 Equity Shares of face value of Rs 10 each for cash at a fixed price of Rs 60 per equity share. 
  
• The issue has opened on December 13, 2021 and will close on December 15, 2021.
  
• The shares will be listed on NSE Emerge Platform.
  
• The share is priced 6 times higher to its face value of Rs 10.
  
• Book running lead manager to the issue is Corporate Capital Ventures.
  
• Compliance Officer for the issue is Payal Vig.
  

Profile of the company

Nupur Recyclers is growing in the field of import of non-ferrous metal scrap such as shredded Zinc Scrap, Zinc die cast scrap, Zurik SS scrap and Aluminium zorba grades. It is also involved in trading of these metal. It processes materials from recyclables’ such as metal or scrap to make the earth healthy. It develops efficient recycled products and work with the customers to give them quality products. It processes a different range of materials with the pieces of equipment and work with the customers to give them quality products. Its product range covers base / primary metals, secondary metals & alloys, minor metals, non- ferrous-alloys, non-ferrous scraps, shredded nonferrous metals, recyclable scraps, aluminium scrap, finished & semi-finished metals and steel products.

The company work as a crucial business interface, networking between manufacturers / processors / yards and consumers/ traders across the country. It pursue business based on quality contacts, information and service. It operate as an important intermediary in the Metals scrap Supply Chain whereby it import scrap metals such as zinc, zurik (shredded nonferrous metals predominantly comprising stainless steel, plus insulated copper wire (ICW), aluminium, copper, lead, magnesium and other metals) from various suppliers and supply the same to customers in the Metal Business. The company’s business model is based on B2B model wherein the company sells the scrap to the business enterprises who further transform the scrap into finished product as per their requirements. It also process and segregate the scrap metals and sell them as per the customers’ requirements as per their quality by assigning specific grades.

The company has also added two new verticals of Installation of Charging stations in Delhi NCR Region in collaboration with EVi Tech. Additionally Extraction of Lithium Ion, Cobalt and Black Mass from the used Mobile Phone batteries and processing to enable it for Refurbishment. The company’s Product Portfolio offers a diversified product range which includes variety of grades, thickness, widths and standards of all types of Non-ferrous Metals according to customer specifications. It has have been conscious in addressing environmental and safety concerns and its stocking facilities.

Proceed is being used for:

• Meeting out the working capital requirements of the company.
  
• Meeting out the general corporate purposes.
  
• Meeting out the issue expenses.
  

Industry overview

The metal recycling market is projected to grow from $52.1 billion in 2019 to $76.1 billion by 2025, at a CAGR of 7.8% from 2020 to 2025. The growth of this market is attributed to the increasing demand for steel and the urbanization & industrialization in developing countries. Also, growing concerns towards the depletion of natural resources at a fast rate have led governments of several countries to make favorable regulations regarding the metal recycling industry, which is further propelling the metal recycling market.

Metal ores and minerals are non-renewable natural resources, which have an ever growing demand at global level and across sectors, making it imperative to reuse and recycle these metals. The National Mineral Policy 2019 of Ministry of Mines envisages making efforts towards augmenting supply of metals by developing processes for recovery of metal through recycling. The stated policy is in line with SDG Goal No 12, which states that current material needs do not lead to over extraction of resources or to degradation of environment. This calls for policy initiative focusing on improved resource efficiency and reduced wastage. Resource efficiency in the minerals and metals sector is realized through the implementation of sustainable development principles throughout the life cycle of minerals and metals. Therefore, this National Non-ferrous Metal Scrap Recycling Framework, 2020 seeks to use life cycle management approach for better efficiency in mineral value chain process. It envisages bringing both product and processing stewardship to enhance Non-Ferrous Metal recycling. 

Pros and strengths

Diversified product range: The company’s product portfolio offers a diversified product range which includes variety of grades, thickness, widths and standards of all types of non-ferrous metals according to customer specifications. It has been conscious in addressing environmental and safety concerns and its stocking facilities.

Excellent network management & logistics: The company has excellent network management as it works as a crucial business interface, networking between manufacturers / processors / yards and consumers / traders across the country. It pursues business based on quality contacts, information and service. It operates as an important intermediary in the Metals scrap Supply Chain whereby it imports scrap metals such as zinc, zurik (shredded nonferrous metals predominantly comprising stainless steel, plus insulated copper wire (ICW), aluminium, copper, lead, magnesium and other metals) from various suppliers and supply the same to customers in the Metal Business. The company’s business model is based on B2B model wherein the Company sells the scrap to the business enterprises who further transform the scrap into finished product as per their requirements.

Experience Promoters: With its promoter’s experience of over 30 years in the sphere of trading of Scrap of non-ferrous metal, Copper, Zinc, Zuric, Aluminium, lead, magnesium Brass, zinc ingot and various other metals. Dedicated employees forming the part of the company, it has grown from strength to strength under the dynamic leadership of its promoters and directors. The combined experience has propelled the company to source and cater to the specific needs of various customers.

Risks and concerns

Global sales expose to numerous conflicting legal and regulatory requirement: Since the company import its products from various countries (such as Germany, USA, UK, Italy etc.), so they are subject to numerous, and sometimes conflicting, legal requirements on matters as diverse as import/export controls, trade restrictions, the environmental laws (including metal scrap waste, aluminum scrap waste), tariffs, taxation, sanctions, government affairs, anti-corruption etc. Non-compliance with these regulations in the conduct of its business could result in fines, penalties, criminal sanctions against the company or its officers, disgorgement of profits, prohibitions on doing business and have an adverse impact on its reputation. However, the company has been following laws of land and meets mandatory levels of product standards and safety.

Operations are subject to high working capital requirements: The company’s business is working capital intensive and hence, trade receivables form a substantial part of its current assets and net worth. Its trade receivables as on June 30, 2021 were Rs 8.05 crore. Thus, major portion of its working capital is utilized towards debtors and inventory. To effectively manage its trade receivables, the company must be able to accurately evaluate the credit worthiness of its customers and dealers and ensure that suitable terms and conditions are given to them in order to ensure its continued relationship with them. However, if the management fails to accurately evaluate the credit worthiness of its customers, it may lead to bad debts, delays in recoveries and / or write-offs which could lead to a liquidity crunch, thereby adversely affecting the business and results of operations.

Do not own premises in which registered office is located: The registered office is not owned by company, it is owned by Sandhya Gupta. The premises have been taken on lease basis for a period of 11 months commencing from March 01, 2021 to January 28, 2022. Upon termination of the lease, the company is required to return registered office premises to the Lessor/Licensor, unless it is renewed. There can be no assurance that the term of the agreements will be renewed on commercially acceptable terms and in the event the Lessor/Licensor terminates or does not renew the agreements, the company is required to vacate its registered office business where administrative activities are carried out. The company may be required to identify alternative premises and enter into fresh lease or leave and license agreement at less favorable terms and conditions. Such a situation could result in loss of business, time overruns and may adversely affect its operations and profitability.

Outlook

Nupur Recyclers is a growing company in the field of import of non-ferrous metal scrap. It is engaged in the business of pure trading of non-ferrous metal scrap, without any further processing. The non-ferrous metal scrap includes stainless steel, aluminium, brass, copper, zinc etc. With a well-defined global footprint, it has access and exposure to a plethora of markets, commodities and geographies. Its easy access to scrap materials and intermediates used in various manufacturing processes makes it one of the most preferred suppliers. It is driven by the philosophy of Creating Values for its stakeholders at both the ends of the supply chain by partnering with them, with a continuous focus on building mutually beneficial long-term supplier and client relationships. The company is not only engaged in pure trading, but also supplies as per customer’s needs. The company, at its places segregate the variety of non-ferrous metals according to their type and grading for specific customer’s needs. It is customer oriented and eco-friendly business house, creating a sustainable scarp recycling ecosystem.

The company is coming out with an IPO of 57,00,000 equity shares of Rs 10 each at a fixed price of Rs 60 per equity share to mobilize Rs 34.20 crore. On the performance front, total revenue has increased by Rs 1230.77 lakh and 1357.14% from Rs 90.69 lakh in the fiscal year ended March 31, 2019 to Rs 1321.46 lakh in the fiscal year ended March 31, 2020. Net Profit has increased by Rs 2.15 lakh and 191.34% from profit of Rs 1.12 lakh in the fiscal year ended March 31, 2019 to profit of Rs 3.28 lakh in the fiscal year ended March 31, 2020. The company intends to cater to the increasing demand of its existing customers and also to increase its existing customer base by enhancing the distribution reach of its products. Enhancing its presence in additional regions will enable it to reach out to a larger market. The company plans to increase its customers by increasing the product & geographical base, maintaining its client relationship and renewing its relationship with existing buyers. Besides, the company intends to focus on adhering to the quality of its offerings. This is necessary so as to make sure that it maintain the high-quality standards for its offerings and get repeat orders from its customers. This will also aid it in enhancing its brand value and further increase the business.