Shri Bajrang Power & Ispat IPO - 7 Things to Know

Shri Bajrang Power & Ispat IPO - 7 Things to Know

by 5paisa Research Team Last Updated: 2022-12-13T11:10:20+05:30

Shri Bajrang Power & Ispat, an integrated steel manufacturing company, has already got SEBI approval for its proposed draft red herring prospectus (DRHP) back in August 2021. However, the company is yet to finalize the dates of the IPO. Shri Bajrang Power & Ispat approval for the IPO is valid for a period of 1 year which will run through the end of August 2022, by which time the company needs to complete the IPO process.

7 Important Things to Know About Shri Bajrang Power & Ispat IPO

1) Shri Bajrang Power & Ispat had filed for a Rs.700 crore IPO with SEBI and has already secured SEBI observations, equivalent to SEBI approval, back in August 2021. The Shri Bajrang Power & Ispat IPO will comprise entirely of a fresh issue of Rs.700 crore. There will be no offer for sale (OFS) component in the public issue.

2) Out of the total fresh issue of Rs.700 crore, Shri Bajrang Power & Ispat will use the funds for repayment of debt as well as for prepayment of certain borrowings. The company will also be using the funds for funding the incremental working capital requirements of the company.

The company has also set aside a small portion for general corporate expense purposes. The entire fresh issue will result in fresh infusion and will also be EPS dilutive due to an increase in the outstanding number of shares of the company.

3) Shri Bajrang Power & Ispat is one of the major integrated steel manufacturing companies based out of central India. The company is located in Raipur, the capital of Chhattisgarh. The company is a major player in India in terms of capacity of iron ore pellets, iron ore beneficiation and sponge iron.

4) Shri Bajrang Power & Ispat uses its own captive mines to supply ore inputs for its metal manufacturing. It has approval to mine 1.2 MTPA and also has manganese ore mines to manufacture intermediate and long steel products. These long steel products include TMT Bars, ERW Pipes, tubular mills, wire rods, HB wires etc. It is also into the manufacture of binding wires, ferro alloys, steel billets, iron pellets and sponge iron.

5) Currently, Shri Bajrang Power & Ispat operates 3 manufacturing units which are all located in Raipur in the state of Chhattisgarh. In addition, the company will also use part of the proceeds to set up a 50 MW solar power plant in Raipur. The power generated by this solar plant will be used for captive consumption at its steel manufacturing units.

6) Shri Bajrang Power & Ispat has had a consistent profitable track record and has been generating operating profit since the financial year 2005. Since then, it has been profitable in each of the subsequent years till date.

The steel industry has been a big beneficiary of the strong demand and robust global steel prices amidst rising infrastructure demand. However, the steel sector has faced headwinds in the form of higher coking coal costs, input ore costs and power and fuel charges.

7) The IPO of Shri Bajrang Power & Ispat will be lead managed by Equirus Capital Private Limited and SBI Capital markets. They will act as the book running lead managers or BRLMs to the issue. Post-IPO, the stock is proposed to be listed on the BSE and the NSE.

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