Vraj Iron and Steel IPO booked 16.90x on the second bidding day. Apply or not? Check GMP, review, subscription status.

  • Vraj Iron and Steel IPO received strong subscriptions from non-institutional and retail investors. The company raised over 51 crore from anchor investors. Analysts recommend a long-term subscription to the IPO based on production capacity expansion and strong financial performance.

Dhanya Nagasundaram
First Published27 Jun 2024, 08:56 AM IST
Vraj Iron and Steel IPO opens for subscription on Wednesday, June 26, and closes on Friday, June 28.
Vraj Iron and Steel IPO opens for subscription on Wednesday, June 26, and closes on Friday, June 28.(https://www.vrajtmt.in/)

Vraj Iron and Steel IPO subscription status: On the second day of bidding, Vraj Iron and Steel IPO saw overwhelming response from both retail and non-institutional investors. Despite some profit booking and the monthly derivatives' expiry, investors are overall optimistic as the benchmark indexes continue to rise. Vraj Iron and Steel IPO subscription status is 16.90 times, as per BSE data.

The initial share sale got bids for 10,37,65,824 shares against 61,38,462 shares on offer, according to BSE data.

The portion for retail individual investors received 19.35 times subscription while the category for non-institutional investors got subscribed 32.51 times. Qualified institutional buyers (QIBs) was booked 91%.

"The Sensex and Nifty 50 reaching all-time highs suggest that 2024 could be a record-breaking year. The exponential surge in IPOs and FPOs in CY2024, with 56 companies poised to raise around Rs. 90,000 crore, underscores the significant impact of several key factors. Retail investor participation has been crucial, alongside strong macroeconomic factors and increasing FPI investments, driving the market and contributing to economic growth, explained Sarvjeet Singh Virk, Co-founder & MD, Shoonya by Finvasia.

The first day of the bidding saw a complete subscription, which made Vraj Iron and Steel Ltd.'s IPO off to a great start. In addition to other fundamental variables, the Sensex, Bank Nifty, and Nifty 50 all hit all-time highs, which appears to have aided the Vraj Iron and Steel IPO, since the retail component was quickly taken followed by non-institutional investors. According to BSE data, Vraj Iron and Steel's IPO subscription status is 3.47 times.

While the category for non-institutional investors had 3.53 subscriptions, the segment for retail individual investors earned 5.07 subscriptions. A total of 61% of qualified institutional buyers (QIBs) were reserved.

Just one day prior to the public subscription period for its opening share sale, Vraj Iron and Steel said on Tuesday that it had garnered little over 51 crore from anchor investors.

Also Read: Vraj Iron and Steel IPO: GMP, subscription status, price, review, other details. Buy or not?

The initial public offering of Vraj Iron and Steel has set aside a 15% of its shares for non-institutional institutional investors (NII), 50% of its shares for qualified institutional buyers (QIB), and 35% of its shares for retail investors.

Under the Vraj brand, the firm produces sponge iron, M.S. Billets, and TMT bars. The firm now employs 52.93 acres of space across two industrial facilities, Raipur and Bilaspur in Chhattisgarh. As of December 31, 2023, the company's production facility in Raipur additionally has a captive power plant with an aggregate installed capacity of 5 MW.

It is tentative that on Monday, July 1, the Vraj Iron and Steel IPO basis for share allocation will be finalised. On Tuesday, July 2, the business will begin refunds, and the shares will be deposited to the allottees' demat accounts the same day after the refund. Vraj Iron and Steel share price is likely to be listed on BSE and NSE on Wednesday, July 3.

Also Read: Vraj Iron and Steel IPO booked 3.47x on first bidding day. 10 key risks investors should know before investing

Vraj Iron and Steel IPO Review

Master Capital Service Ltd

The brokerage claims that the business is expanding its production capacity from 2,31,000 TPA to 5,00,100 TPA and its captive power plant capacity from 5 MW to 20 MW. While the MS billet expansion is anticipated to be completed by early FY26, the sponge iron and captive power plant expansions are anticipated to be completed by FY25. We suggest a long-term subscription to this IPO.

Dilip Davda, contributing editor at Chittorgarh.com

The business manufactures and markets sponge iron, TM Bars, and M S Billets. It experiments with effective cost control with its in-house power plants. It has so far shown strong results, and the firm is optimistic about keeping up the current trends after expanding. Looking at the issue's annualised profits for FY24, it seems fairly priced. According to contributing editor at Chittorgarh.com, investors may lap it up for medium to long term.

GEPL Capital 

Brokerage claims that the firm has shown solid financial performance over the last three years, with CAGR growth of 21%, 41%, and 69% for sales, EBITDA, and PAT. The rise of infrastructure, urbanisation, and rising demand from industries like autos will propel the steel industry forward. The demand for steel is anticipated to continue rising globally. 

Although India's per capita steel consumption is less than the world average, it is expected to rise sharply by 2031 thanks to government initiatives and a 9–11% yearly growth in domestic demand through 2026. The Bilaspur plant's expansion plans are designed to take use of the current infrastructure in order to increase profitability and operational control throughout the value chain. Therefore, we advise giving the issue a "Subscribe" rating.

Also Read: Vraj Iron and Steel IPO: Steel maker raises 51.29 crore from anchor investors ahead of public issue

Vraj Iron IPO details

Vraj Iron and Steel IPO, worth 171 crore is completely a fresh issue of 8,260,870 equity share; there is no offer for sale (OFS) component, according to Red Herring Prospectus (RHP).

The company plans to use the proceeds from the IPO for general corporate operations and an expansion project at the Bilaspur site.

The company plans to use the proceeds from the IPO for general corporate operations and an expansion project at the Bilaspur site.

Also Read: Vraj Iron and Steel IPO opens tomorrow: GMP, issue details, 10 key things to know

Vraj Iron and Steel IPO GMP today

Vraj Iron IPO GMP today or Vraj Iron IPO grey market premium is +85. This indicates Vraj Iron and Steel share price were trading at a premium of 85 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Vraj Iron and Steel share price was indicated at 292 apiece, which is 41.06% higher than the IPO price of 207.

Today's IPO GMP indicates higher and anticipates a solid listing based on the activity of the grey market over the past nine sessions. Analysts at investorgain.com estimate that the lowest GMP is 20 and the maximum GMP is 85.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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First Published:27 Jun 2024, 08:56 AM IST
HomeMarketsIPOVraj Iron and Steel IPO booked 16.90x on the second bidding day. Apply or not? Check GMP, review, subscription status.

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