West Bengal-based Shyam Metalics and Energy has filed a draft red herring prospectus (DRHP) with capital market regulator, Securities Exchange Board of India (SEBI). The metal-producing company through an initial public offering (IPO) is looking at raising around Rs 1,107 crore, it stated in its DRHP.
The net proceeds of the IPO is proposed to be used for repayment/prepayment, in full or part, of debt of the Company and SSPL, one of its subsidiaries; and general corporate activities.The company’s debt is basically availed term loans and working capital facilities in the ordinary course of business, for the purpose of capital expenditure, purchase raw materials, packing material, stores, spares and services required for day-to-day operations.
The offer consists of a fresh issue of Rs 657 crore and an offer for sale (OFS) of up to Rs 450 crore. It may opt for Rs 250-crore-pre-IPO placement, subject to consultation with merchant bankers.
The promoters of the company are Mahabir Prasad Agarwal, Brij Bhushan Agarwal, Sanjay Kumar Agarwal, Subham Capital Private Limited, Subham Buildwell Private Limited, Narantak Dealcomm Limited, Kalpataru Housefin & Trading Private Limited, Dorite Tracon Private Limited and Toplight Mercantiles Private Limited.
Subham Capital Private Limited, Subham Buildwell Private Limited, Kalpataru Housefin & Trading Private Limited, Dorite Tracon Private Limited, Narantak Dealcomm Limited and Toplight Mercantiles Private Limited will offer equity shares aggregating to Rs 66 crore, Rs 114 crore, Rs 45 crore, Rs 49 crore, Rs 174 crore and Rs 2 crore respectively.
As per the company DRHP, in fiscals 2018, 2019 and 2020, the revenue from operations stood at Rs 3,920 crore, Rs 4,684.5 crore and Rs 4,395 crore respectively. The company’s revenue from operations increased at a CAGR of 6.56 per cent from 2018 to 2020. As of March 31, 2018, 2019 and 2020 and as of December 31, 2020, the Gross Debt to Equity ratio was 0.30, 0.29, 0.47 and 0.27, respectively.
The revenue from exports amounted to Rs 421 crore and Rs 440 core in Fiscal 2020 and the nine months ended December 31, 2020, respectively. The company intends to increase exports by leveraging the close proximity of the manufacturing plants to various ports and export products, such as ferro alloys and specialised billets to international markets. Currently, it exports to Nepal, China, Bangladesh, Bhutan, United Kingdom, South Korea, Thailand, Indonesia, Taiwan and Japan, and are currently exploring newer geographies in North America, South America, Europe and Africa in order to increase exports.
It is an AA- rated company with an employee strength of 11,457 people. The company’s combined production capacity stands at 5.71 MTPA.