Kalana Ispat Limited IPO

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Kalana Ispat Limited was originally incorporated as “Kalana Ispat Private Limited” on October 15, 2012, under the Companies Act, 1956, in Gujarat. The company transitioned from a private limited entity to a public limited company on December 21, 2023, following a shareholder resolution.

Founded by Mr. Aftabhusen S. Khandwawala and Mr. Varghese Joseph Pottakerry, Kalana Ispat initially focused on trading metal scraps sourced from imports, shipbreaking yards, and local merchants. In 2015, the company expanded into manufacturing, setting up a facility in Ahmedabad, Gujarat, to produce M.S. Billets and Alloy Steel Billets/Ingots.

Today, Kalana Ispat operates its manufacturing unit in Sanand, Ahmedabad, with a maximum installed capacity of 38,000 M.T. as of December 31, 2023. The company is promoted by Mr. Aftabhusen S. Khandwawala, Mr. Varghese Joseph Pottakerry, Mr. Gurubaxsing Jamiatsing Bagga, and Mr. Sadik Nannabhai Qureshi.

Objects of the Kalana Ispat Limited IPO:

The objects of the present issue of Equity Shares are: i. Capital Expenditure for Installation of 4 MW DC & 3.5 MW AC Ground Mounted Solar Power Plant - TPSAT Structure ii. Capital expenditure for setting up of rolling mill at Survey No. 4/1 Taluka Sanand, Mouje Kala village, Ahmedabad by the construction of the industrial shed, purchase of equipment/machinery, other assets etc; and iii. General Corporate Purpose.
RHP of Kalana Ispat Limited IPO

Kalana Ispat Limited IPO Details:

Open Date: Sep 19 2024
Close Date: Sep 23 2024
Total Shares: 4,938,000
Face Value: ₹ 10 Per Equity Share
Issue Size: 32.59 Cr.
Lot Size: 2000 Shares
Issue Price: ₹ 66 Per Equity Share
Listing At: NSE Emerge
Listing Date: Sep 26 2024

Promoters And Management:

Mr. Varghese Joseph Pottakerry (DIN: 02771578), aged 68, is a promoter and Managing Director of the Company with a Master’s in Commerce from Mysore University. He has 40 years of combined experience in accounting, business, and the metal industry. Starting his career as a retailer, he transitioned into the metal industry in 1995. He also serves as a director of MIT Iron and Steel Private Limited since 2011. Mr. Aftabhusen S Khandwawala (DIN: 02771726), aged 46, is a promoter and executive director of the Company since its inception. With 26 years of experience in the metal industry, he began his career trading metal scrap and transitioned to manufacturing M.S. Billets in 2011. Mr. Gurubaxsing Jamiatsing Bagga (DIN: 06391512), aged 76, is a promoter and non-executive director of the Company. He holds a Bachelor's degree in Commerce and a law degree from Gujarat University. With over 50 years of experience in the textile business, he also has 12 years of experience in the iron and steel industry and a strong understanding of the real estate sector.

Financials of Kalana Ispat Limited IPO:

Particular (In lakh) Mar-24 Mar-23 Mar-22
Revenue from Operations 7,372 8,304 5,775
Cost of Material Consumed 4091 5263 4889
Purchase of stock-in-trade 2058 2033 300
Change in Inventories 15 89 -88
Employee Cost 45 49 35
Other Expenses 790 743 575
EBITDA 373 127 64
EBIDTA Margin 5.06% 1.53% 1.11%
Other income 22 32 18
Depreciation 38 35 38
Interest 31 56 26
Profit before tax 326 68 19
Tax 89 18 6
Net profit 237 50 13
NPM (%) 3.21% 0.60% 0.22%
EPS 1.82 0.38 0.10

Comparison With Peers:

Name of the Companies Revenue (Cr) Profit (Cr) EPS P/E CMP Mcap (cr)
Supershakti Metaliks Limited 731 13 11.6 31.3 364 419
Incredible Industries Limited 816 6 1.28 34.8 46 218
Gallantt Ispat Limited 4227 225 9.34 29.7 390 9410
Kalana Ispat Limited 74 2.3 1.82 36.2 66 86
All the data is as per FY24

Recommendation on Kalana Ispat Limited IPO:

To be updated shortly.

Lead Manager of Kalana Ispat Limited IPO:

  1. Jawa Capital Services Private Limited

Registrar of Kalana Ispat Limited IPO:

  1. Skyline Financial Services Private Ltd

Company Address:

Kalana Ispat Limited 504, Ashwamegh Avnue, 5th Floor, Nr Mithakhali Underbridge Mithakhali, Ahmedabad,-380009 Phone: +91-81418 48159 Email: compliance@kalanaispat.com Website: https://kalanaispat.com/

Discussion on Kalana Ispat Limited IPO:

1 Comment

    View for this SME IPO

    1. For a business dealing in steel billets, which is a commodity product with low margins and stagnant revenue growth, the current asking valuation of 36 P/E is highly unreasonable.

    2. Given the nature of the business, where profitability is constrained by limited pricing power and minimal differentiation, such a high price-to-earnings ratio is not justified.

    3. Typically, commodity businesses with low margins and flat growth prospects should command a much lower valuation, reflective of the inherent risks and market volatility.

    Avoid

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