B.S. Sponge Files For ₹1,000 Crore IPO, Plans ₹650 Crore Debt Repayment From Fresh Issue Proceeds

Mumbai: Steel manufacturer B.S. Sponge Ltd has filed draft papers with the Securities and Exchange Board of India to raise ₹1,000 crore through an initial public offering.

According to the Draft Red Herring Prospectus filed on Wednesday, the proposed B.S. Sponge IPO combines a fresh equity issue with an offer for sale by promoters.

The company manufactures products across several stages of the steel value chain, from sponge iron and semi-finished steel to finished products.

₹800 Crore Fresh Issue, ₹200 Crore OFS

The IPO structure includes a fresh issue of equity shares worth up to ₹800 crore and a promoter offer for sale worth up to ₹200 crore.

The fresh issue will raise funds for the company, while the OFS involves the sale of existing shares by promoters.

Together, these components account for the proposed ₹1,000 crore public offering outlined in the draft prospectus.

₹650 Crore Earmarked For Debt Repayment

B.S. Sponge plans to use ₹650 crore from the net proceeds of the fresh issue to repay or prepay certain outstanding borrowings and the interest accrued on them.

The repayment may cover these obligations either fully or partly, according to the filing.

The remaining fresh issue proceeds will be directed towards general corporate purposes. Debt repayment is therefore the largest specified allocation within the company’s proposed use of funds.

Steel Products Across Multiple Categories

The company’s semi-finished steel portfolio includes sponge iron, billets and slabs.

Its finished products include thermo-mechanically treated bars, hot rolled coils, wire rods, electric resistance welded pipes and tubes, and ferro alloys.

Its integrated manufacturing operations cover the conversion of iron ore into sponge iron and the production of value-added finished steel products.

Captive Power And IPO Advisers

The manufacturing facility is supported by a 67-MW captive power plant, as disclosed in the DRHP.

ICICI Securities and Motilal Oswal Investment Advisors are the merchant bankers managing the proposed initial public offering.