Kolkata steel major Shyam Metalics and Energy Ltd received approval from market regulator SEBI to go ahead with their initial public offering (IPO). Through this funding raising, the company is looking at raising Rs 1,107 crore.
The company had filed its Draft Red Herring Prospectus (DRHP) on February 27, 2021 with SEBI.
About Shyam Metalics and Energy
- It is a leading integrated metal producing company and also amongst the largest producers of ferro alloys in India in terms of installed capacity as on February 2021. It was fourth largest player in the sponge iron industry when compared with Indian peers on the basis of capacity.
- The aggregate IPO comprises a fresh issuance of equity shares aggregating up to Rs 657 crore and an offer for sale by selling shareholders i.e promoter and promoter group - Subham Capital, Subham Buildwell, Kalpataru Housefin & Trading, Dorite Tracon, Narantak Dealcomm and Toplight Mercantiles aggregating up to Rs 450 crore. The offer includes a reservation of up to 3,00,000 equity shares for eligible employees.
-The portion reserved for qualified institutional buyers will be upto 50 per cent of the offer, non-institutional investors to have upto 15 per cent of the portion reserved while upto 35 per cent will be reserved for the retail investors.
- The net proceeds from the fresh issue will be used for repayment or prepayment of Rs 470 crore of its debt and that of its subsidiary, Shyam SEL and Power Ltd; and for other general corporate purposes.
- The company claims to be EBITA positive since its operations in 2005.
- The company supplies to its customers through 42 distributors, brokers across 13 states and 1 union territory.
- The company currently operates three manufacturing plants that are located at Sambalpur in Odisha, and Jamuria and Mangalpur in West Bengal.
- The company sells thermo mechanically treated bars and structural products under the SEL brand name and as of December 31, 2020 had an aggregate metal capacity of its 3 manufacturing plants at 5.71 million tonnes per annum which stands to increase to 11.60 mn MTPA as per the ongoing capacity expansion plans by FY2025.
- The company is mulling about entering segments like pig iron, ductile iron pipes and aluminium foil.
- It is in the process of commissioning an aluminum foil rolling mill at Pakuria in West Bengal with a proposed installed capacity of 0.04 MTPA , expected to become operational by FY2022.