March 01, 2021: Shyam Metalics and Energy Ltd, 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 (Source: CRISIL Report); has refiled its Draft Red Herring
Prospectus (DRHP) with the markets
regulator for a Rs. 1107 cr IPO. The
company tried to tap the capital markets in 2018 and had even received its SEBI
Nod in early 2019. However, due to the pandemic and
tepid market sentiments the Company deferred its plans to list on the bourses.
The aggregate issue size of Rs 1107 cr comprises of a Fresh
Issuance of equity shares aggregating up to Rs
657 cr 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 cr The offer includes a reservation of up to 3,00,000 equity shares for
eligible employees.
The Company intends to utilize the net proceeds from the fresh
issue for repayment or prepayment of Rs 470 crs of its debt and that of its subsidiary,
Shyam SEL and Power Ltd; and for other general corporate purposes.
The portion reserved for Qualified Institutional Buyers will be
upto 50% of the offer, Non-Institutional Investors to have upto 15% of the
portion reserved while upto 35% will be reserved for the Retail Investors.
The Kolkata based long steel products and ferro alloy
focused company has been EBITA positive since its operations in 2005 and sells
intermediate and final products across the steel value chain catering to
institutional and end use 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 on Dec 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. It was fourth largest player in the
sponge iron industry when compared with Indian peers on the basis of capacity
Additionally, SMEL is looking to enter
in segments such as pig iron, ductile iron pipes and aluminum foil and 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.
Steel demand growth has outpaced the
countries macroeconomic growth in FY18 and FY19. The impetus given to the
infrastructure segment which accounts for approximately 30% of the steel demand
will see an increase in FY22 besides additional factors such as the soft
revival in the housing sector led by Affordable Housing and post covid recovery
of the Auto Sector. India today is the second largest producer of steel in the
world with nearly 6% share of global steel production.
ICICI
Securities Ltd., JM Financial Ltd, Axis Capital Ltd, IIFL Securities Ltd and
SBI Capital Markets Ltd are the BRLMS to the Issue.
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