Shyam Metalics lists at 24% premium over its issue price1 min read . Updated: 24 Jun 2021, 10:17 AM IST
- The ₹909-crore initial public offering (IPO) of Shyam Metalics was subscribed 121.43 times in its share sale during 14-16 June
Mumbai: Shares of Shyam Metalics and Energy Ltd made a firm debut on stock exchanges on Thursday. The share was listed at ₹380, a 24.18% increase from its issue of ₹306.
The ₹909-crore initial public offering (IPO) of Shyam Metalics was subscribed 121.43 times in its share sale during 14-16 June.
The net IPO proceeds will be utilised for repayment and/or pre-payment of company and its subsidiary (SSPL)'s debt fully or partially and for general corporate purposes.
“The company would trade at price to earnings (PE) of 21 times for FY20 which is quite attractive as compared to listed peers," said Canara Securities ahead of its IPO.
The demand and pricing in the steel industry are volatile and sensitive to the cyclical nature. Manufacturing plants and sources of raw materials are primarily concentrated in eastern India and any adverse developments affecting this region could have an adverse effect on business, Canara Securities said.
Shyam Metalics and Energy is an integrated metal producing company based in India with a focus on long steel products and ferroalloys. It currently operates three manufacturing plants in Sambalpur in Odisha, along with Jamuria and Mangalpur in West Bengal.
The company is among the largest producers of ferroalloys in terms of installed capacity in India, as of February 2021.
Factors such as loss of any suppliers or failure of suppliers to deliver some primary raw materials like iron ore, iron ore fines, coal, chrome ore and manganese ore may have an adverse impact on its ability to continue its manufacturing process without interruption and its ability to manufacture and deliver the products to customers without any delay, said ICICI Direct.
“Rising demand growth from long steel and Ferro alloys. Planned expansion in new high growth potential sectors. It is planning to set up a Blast Furnace, the output of which may serve as a raw material for the planned DI Pipes unit alongside IF units," said Axis Capital.
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