Shyam Metalics & Energy Ltd IPO

Closed

Subscription Details

  • Open Date 14 Jun
  • Close Date 16 Jun
  • Lot Size 45 Equity Shares
  • IPO Size ₹ 909 - 918 Cr
  • IPO Price Range ₹ 303 - 306
  • Min Investment ₹ 13635

Shyam Metalics & Energy Ltd IPO Timeline

Open Date
14 Jun
Close Date
16 Jun
Basis of Allotment
21 Jun
Refunds
22 Jun
Credit to Demat Account
23 Jun
Listing Date
24 Jun

IPO Synopsis

Object of the Offer

The offer comprises a fresh issue and an offer for sale. Out of fresh Issue of ₹657cr, ₹470cr is proposed to be utilized towards repayment/prepayment of certain debt availed by the company and its subsidiaries.
 

Shyam Metalics & Energy Ltd IPO Subscription Status

Shyam Metalics IPO Subscription Status

Category Subscription Status
Qualified Institutional (QIB) 155.71 Times
Non-Institutional (NII) 339.98 Times
Retail Individual 11.64 Times
Employee 1.55 Times
Total 2.28 Times

 

Shyam Metalics IPO Subscription Details (Day by Day)

Date QIB NII Retail Employee Total
June 14, 2021 17:00 0.00x 0.70x 2.19x 0.27x 1.23x
June 15, 2021 17:00 0.81x 2.60x 5.80x 0.78x 3.65x
June 16, 2021 17:00 155.71x 339.98x 11.64x 1.55x 121.43x

About Shyam Metalics & Energy Ltd

Shyam Metalics and Energy Limited is a leading integrated metal producing company based in India (Source: CRISIL Report) with a focus on long steel products and ferro alloys. The company is amongst the largest producers of ferro alloys in terms of installed capacity in India, as of February 2021 (Source: CRISIL Report). It has the ability to sell intermediate and final products across the steel value chain. As of March 31, 2020, it is one of the leading players in terms of pellet capacity and the fourth largest player in the sponge iron industry in terms of sponge iron capacity in India (Source: CRISIL Report).

Financial of Shyam Metalics and Energy Limited

 

(Cr., unless specified)

FY18

FY19

FY20

9MFY21

Revenue from Operations

3,834

4,606

4,363

3,933

EBITDA

715

957

634

717

EBITDA Margin (%)

18.9

20.6

14.5

18.2

Diluted EPS ()

18.2

25.9

14.6

19.5

ROE (%)

22.89

24.27

12.04

13.89*

Gross Debt to Total Equity (x)

0.30

0.29

0.47

0.27

 


Diversified product mix with strong focus on value added products

The company products primarily comprise of (i) long steel products, which range from intermediate products, such as, iron pellets, sponge iron and billets and final products, such as, TMT, customized billets, structural products and wire rods; and (ii) ferro alloys with a specific focus on high margin products, such as, specialized ferro alloys for special steel applications. The company also undertakes conversion of hot rolled coils to pipes, chrome ore to ferro chrome and manganese ore to silico manganese for an Indian steel conglomerate. The forward and backward integration of manufacturing plants has resulted in multiple points of sale across the steel value chain and provided with flexibility to sell intermediate products as well as use them for captive consumption, depending on the demand. This has resulted in a diversified product mix, which has reduced dependency on a particular product and de-risked revenue streams.

Strong financial performance and credit ratings

The company focuses on continuous efficiency improvements, improved productivity and cost rationalization has enabled it to deliver consistent and strong financial and operational performance. The company has a relatively better financial strength as compared to other companies operating in the long and intermediary steel sector. Revenue from operations increased at a CAGR of 6.56% from ₹3,843 cr in FY2018 to ₹4,363 cr in FY2020. Further, since the commencement of operations in FY 2005, the company has delivered a positive EBITDA in each of the Fiscals. As of March 31, 2020, the gearing ratio was one of the lowest amongst the competitors. In FY 2020, the interest coverage ratio was one of the highest amongst competitors (Source: CRISIL Report). The company has also obtained strong credit ratings. In particular, the company and its subsidiary, Shyam SEL and Power Limited, has received CRISIL A1+, CRISIL AA-/ Stable, and CRISIL A1+ rating from CRISIL for their short-term (bank facilities) rating, long-term (bank facilities) rating and commercial paper, respectively. In addition, the company and its subsidiary, Shyam SEL and Power Limited, has received CARE A1+, CARE AA-/ Stable, and CARE A1+ rating from CARE for their short term (bank facilities) rating, long-term (bank facilities) rating and commercial paper, respectively.

Experienced Promoters, Board and senior management team

The company is led by individual Promoters, Mahabir Prasad Agarwal, Brij Bhushan Agarwal and Sanjay Kumar Agarwal, who have several decades of experience in the steel and ferro alloys industry, and have been instrumental in the growth of the company. The company also has an experienced Board of Directors who has extensive knowledge and understanding of the metal industry and has the expertise and vision to scale up business. The chairman, Mahabir Prasad Agarwal, is responsible for strategic planning and overall administration of the company. The vice chairman and managing director, Brij Bhushan Agarwal, is responsible for implementing future growth strategies. The joint managing director, Sanjay Kumar Agarwal, is responsible for the entire production process at the manufacturing plants. The whole-time director Deepak Kumar Agarwal is responsible for the finance functions.

Key Risk

  • Loss of any of suppliers or a failure by suppliers to deliver some of primary raw materials such as iron ore, iron ore fines, coal, chrome ore and manganese ore may have an adverse impact on the company’s ability to continue its manufacturing process without interruption and its ability to manufacture and deliver the products to the customers without any delay.
  • The success of the company depends on stable and reliable logistics and transportation infrastructure. Disruption of logistics and transportation services could impair the ability of suppliers to deliver raw materials or the company’s ability to deliver products to its customers which may adversely affect operations.
  • The demand and pricing in the steel industry is volatile and are sensitive to the cyclical nature of the industries it serves. A decrease in steel prices may have a material adverse effect on the business, results of operations, prospects and financial condition.

 

* For complete list of risk factors kindly refer to the Red Herring Prospectus.

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