Shyam Metalics and Energy Ltd has filed draft red herring prospectus (DRHP) with the capital markets regulator Sebi to raise Rs 1,107 crore via an initial public offer you (IPO). The offer you comprises a fresh concern of Rs 657 crore and an offer you for sale (OFS) of up to Rs 450 crore. The firm might opt for Rs 250-crore pre-IPO placement, topic to consultation with merchant bankers. Equity shares of Metalics and Energy Ltd are proposed to be listed on BSE and National Stock Exchange (NSE). The lead managers to the concern are ICICI Securities, Axis Capital, IIFL Securities, JM Financial and SBI Capital Markets. While KFin Technologies Private Ltd is the registrar to the IPO.
According to the draft papers, Shyam Metalics and Energy Ltd plans to utilise the funds raised via IPO for repayment and/or pre-payment, in complete or element, of debt of the corporation and SSPL, one of its subsidiaries and for common corporate purposes. The promoters of the corporation are Brij Bhushan Agarwal, Sanjay Kumar Agarwal, Mahabir Prasad Agarwal, Subham Buildwell Private Limited, Narantak Dealcomm Limited, Subham Capital Private Limited, Kalpataru Housefin & Trading Private Limited, Dorite Tracon Private Limited and Toplight Mercantiles Private Limited.
The listed peers of Shyam Metalics and Energy Ltd are Tata Steel Ltd, JSW Steel Ltd, Steel Authority of India Ltd, Jindal Steel and Power Ltd and Tata Steel Long Products Ltd. According to the DRHP, Tata Steel has a P/E of 57.38x, JSW Steel Ltd of 2.25 x and Steel Authority of India Ltd 12.63x. For the nine months ended December 31, 2020, Shyam Metalics and Energy Ltd’s profit stood at Rs 456.3 crore whilst in fiscal 2020, it stood at Rs 340.3 crore. The corporation presently operates 3 manufacturing plants positioned at Sambalpur in Odisha, and Jamuria and Mangalpur in West Bengal.
Shyam Metalics and Energy Ltd has regularly outperformed its peers in terms of profitability, largely on account of backward (such as pellets) and forward integrated operations. Moreover, far better operating overall performance is also attributed to a properly-diversified presence of SMEL and de-danger itself from a downfall in any unique segment inside the worth chain. The corporation also enjoys low freight expenses following captive railway siding. As of December 31, 2020, the aggregate installed metal capacity of its manufacturing plants was 5.71 million tonne per annum (comprising intermediate and final solutions).