Shri Bajrang Power & Ispat Ltd IPO

Last Updated: 01 September 2022 11:02 AM by 5Paisa

Shri Bajrang Power and Ispat Ltd has received capital markets regulator Sebi's go-ahead to raise Rs 700 crore through an initial share sale. For FY21, Bajrang Power reported a revenue of Rs. 3,031.21 crore vs Rs. 2,663.71 crore a year ago. Net profit for the period stood at Rs. 298.93 crore against Rs. 141.05 crore last year. Its total sanctioned limit of working capital facilities of Rs. 555 crore, including fund-based and non-fund-based limits and the aggregate amounts sanctioned under the fund based and non-fund based working capital facilities are Rs. 325 crore and Rs. 230 crores, respectively. Equirus Capital Pvt Ltd and SBI Capital Markets Ltd are the lead managers to the issue.

Objective of the Issue

The company proposes to utilise net proceeds of the issue for:

Prepaying existing debt of Rs. 400 crore and become debt-free on a standalone basis
Use Rs. 120 crores for funding working capital requirements
 

Shri Bajrang Power and Ispat is one of the leading integrated steel companies based in central India with 11 distributors with a network of 514 dealers and is one of the top 10 players in India in terms of capacity for iron ore pellets, iron ore beneficiation and sponge iron. The firm utilizes its captive iron mine with an approval to mine 1.2 MTPA and manganese ore mines to manufacture intermediate and long steel products, such as, TMT bars, ERW pipes manufactured through tubular section mill, wire rods, HB wires including binding wires, ferro alloys, steel billets, iron pellets and sponge iron.

The firm operates three manufacturing units in Raipur, Chhattisgarh which has abundant reserves of iron ore, iron ore fines and coal mines, its primary raw material sources. The firm has exclusive mining rights for an open-cast manganese ore mine located at Vizianagaram, Andhra Pradesh wherein it is permitted to mine 13,114 metric tonne per annum (“TPA”). For coal, it has secured coal linkages with South Eastern Coalfields Limited, a subsidiary of Coal India Limited, for annual supply of 6.03 MTPA. In May 2021, the installed capacity of iron-ore beneficiation and pelletisation units was 2.0 MTPA and 1.4 MTPA, respectively.
The firm is also in the process of expanding its capacity for sponge iron, steel melting, rolling mill, ferro alloys, captive power and setting up a galvanising plant, which is expected to be completed within FY22. Further, it intends to set up a 50MW solar power plant at Raipur It has a consistent track record of delivering operating profitability, and since fiscal 2005, has remained profitable in each of the financial years.