Newmalayalam Steel Limited IPO

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They are engaged in the manufacturing of galvanized pipes, tubes, and sheets, which are integral to the construction industry, particularly in Kerala. Their products are known for:

i. Rust Resistance: The galvanization process enhances product durability and quality by making it rust-free.
ii. Heat and Leak Reduction: Galvanized pipes and sheets are widely used for roof construction to mitigate heat and leakage issues.

Market Presence and Demand

i. Their products have successfully created a strong brand presence in Kerala under the name ‘Demac Steel’.
ii. Key Market Drivers:
a. Kerala’s inclement weather conditions necessitate durable and rust-free construction materials.
b. Galvanized pipes, tubes, and sheets are widely used as indispensable raw materials in the construction industry, particularly for household roofing.
iii. Constant Demand: Their products remain in high demand due to their ability to address Kerala’s construction needs effectively, offering solutions to weather-related damage.

Conclusion

Their Company, with its strategic leadership and consistent capacity expansions, has established itself as a leading manufacturer of galvanized pipes, tubes, and sheets in Kerala. Through product innovation, quality focus, and increasing production capacity, they are committed to meeting the evolving needs of the construction industry and expanding their market presence.

Objects of the Newmalayalam Steel Limited IPO:

The company proposes to utilize the Net Proceeds from the offer towards funding the following objects i. IT / Technological Upgradation of existing manufacturing facility ii. Expansion of the existing solar facility for power generation iii. Funding of expenditure towards civil construction of new factory shed cum storage facility within the existing factory premises situated at Kerala. iv. Advertising, Marketing and Brand Building v. Funding incremental working capital requirements of the Company vi. Issue related expenses vii. General Corporate purposes.
DRHP of Newmalayalam Steel Limited IPO
RHP of Newmalayalam Steel Limited IPO

Newmalayalam Steel Limited IPO Details:

Open Date: Dec 19 2024
Close Date: Dec 23 2024
Total Shares: 46,40,000
Face Value: ₹ 10 Per Equity Share
Issue Size: 41.76 Cr.
Lot Size: 1600 Shares
Issue Price: ₹ 85 - 90 Per Equity Share
Listing At: NSE Emerge
Listing Date: Dec 27 2024

Promoters And Management:

Mahendra Kumar Jain, 65, Promoter, Chairman, and Executive Director of the Company, has over three decades of experience in the steel sector. Though he does not hold a formal educational qualification, he was previously a managing partner at Navin Trading Company. He serves as a director in Vyttila Steel Private Limited, Demac Roofing Private Limited, Jaihind Tubes Private Limited, Jaihind Steel Private Limited, Jaihind Steel Tubes Private Limited, and Metal Craft Pte Ltd. He has been associated with the Company since August 8, 2017, and as Chairman since December 19, 2023. Vazhappily Davis Varghese, 66, is a Promoter and Managing Director of the Company. With over nine years of experience in the steel industry, he oversees working capital management, procurement planning, and sales & receivables management. He has been associated with the Company since its incorporation and has served as Managing Director since March 31, 2022. Molly Varghese, 60, is a Promoter and Whole-time Director of the Company. She holds a bachelor’s degree in science from the University of Kerala and pursued a master’s degree at the University of Calicut. With nine years of experience in finance, including her role as accounts manager at M/s. Demac Steel, she currently oversees internal review and verification of accounts. She has been associated with the Company since November 14, 2018.

Financials of Newmalayalam Steel Limited IPO:

In Cr.
Particulars Sep 30, 2024 March 31, 2024 March 31, 2023 March 31, 2022
Revenue from Operations 154.21 300.16 354.80 317.92
EBITDA 9.58  (6.17%) 10.27 (3.39%) 12.24 (3.40%) 13.03 (4.03%)
PAT 5.19 (3.34%) 4.26 (1.41%) 6 (1.67%) 6.73 (2.08%)
ROCE 17.19% 17.60% 21.74% 24.18%
CFOA 23.55 -21.31 31.09 -6.28

Comparison With Peers:

Companies Revenue EBITDA PAT EBITDA/Tonne D/E Ratio MCap P/E
NewMalayallam Steel  (FY 2024) 300.16 Cr. 10.27 Cr. (3.39%) 4.26 Cr. (1.41%) Rs. 2,270 0.86 155.59 Cr. 36.52
APL Apollo Pipes (TTM) 18,692 Cr. 1,000 Cr. (5%) 583 Cr. (3.12%) Rs. 2,972 0.22 43,721 Cr. 169
Hariom Pipe Industries (TTM) 1,268 Cr. 162 Cr. (13%) 60 Cr (4.73%) Rs. 7225 0.61 1,757 Cr. 29.40

Recommendation on Newmalayalam Steel Limited IPO:

Review and Recommendation of NewMalayalam Steel Limited IPO by team IZ is 3/10.

Lead Manager of Newmalayalam Steel Limited IPO:

  1. Khandwala Securities Limited

Registrar of Newmalayalam Steel Limited IPO:

  1. Kfin Technology Private Limited

Company Address:

Newmalayalam Steel Limited Door No. 2/546/A & 2/546/B Mala Pallipuram P O, Mala, Thrissur 680 732, Kerala Phone: +91 703 421 2002 Email: info@demacsteel.com Website: https://demacsteel.com/

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