Shyam Metalics and Energy IPO
(i) They are a leading integrated metal producing company based in India (Source: CRISIL Report) with a focus on long steel products and ferro alloys. They are amongst the largest producers of ferro alloys in terms of installed capacity in India, as of February 2021 (Source: CRISIL Report). They have the ability to sell intermediate and final products across the steel value chain. As of March 31, 2020, they were 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).
(ii) They were also one of the leading integrated steel and ferro alloys producers in the eastern region of India in terms of long steel products, as of March 31, 2020 (Source: CRISIL Report). They have a consistent track record of delivering operating profitability, and since the commencement of their operations in Fiscal 2005, they have delivered a positive EBITDA in each of the Fiscals.
(iii) They currently operate three manufacturing plants that are located at Sambalpur in Odisha, and Jamuria and Mangalpur in West Bengal. As of December 31, 2020, the aggregate installed metal capacity of the manufacturing plants was 5.71 million tonne per annum (“MTPA”) (comprising of intermediate and final products). Their manufacturing plants also include captive power plants with an aggregate installed capacity of 227 MW, as of December 31, 2020. They are also in the process of increasing the capacities of their existing manufacturing plants and captive power plants, which is expected to increase their aggregate installed metal capacity (comprising of intermediate and final products) from 5.71 MTPA, as of December 31, 2020, to 11.60 MTPA and captive power plants aggregate installed capacity from 227 MW, as of December 31, 2020, to 357 MW. These proposed expansions are expected to become operational between Fiscal 2022 and Fiscal 2025. In addition, they are in the process of commissioning an aluminium foil rolling mill at Pakuria in West Bengal with a proposed installed capacity of 0.04 MTPA, which is expected to become operational in Fiscal 2022.
(iv) Clients of Shyam Metalics and Energy
a) Domestic customers
Jindal Stainless Limited, Jindal Stainless (Hisar) Limited, and Rimjhim Ispat Limited.
b) International customers
Norecom DMCC, Norecom Limited, POSCO International Corporation, World Metals & Alloys (FZC), Traxys North America LLC, JM Global Resources Limited, Goenka Steels Private Limited and Vijayshri Steel Private Limited.
Understanding the business model of Shyam Metalics IPO
Objects of the Shyam Metalics and Energy IPO:
Shyam Metalics and Energy IPO Details:
|Open Date:||Jun 14 2021|
|Close Date:||Jun 16 2021|
|Face Value:||₹ 10 Per Equity Share|
|Issue Type:||Book Built|
|Issue Size:||909 Cr.|
|Lot Size:||45 Shares|
|Issue Price:||₹ 303-306 Per Equity Share|
|Listing Date:||Jun 24 2021|
Promoters And Management:
Financials of Shyam Metalics and Energy IPO:
|Particulars (in Cr.)||9MFY21||Mar-20||Mar-19||Mar-18|
|Cost of Material Consumed||2,437.36||2,718.22||2,782.77||2,296.79|
|Purchase of Stock-in-Trade||4.57||63.25||28.62||128.28|
|Change in Inventories||13.41||-103.49||-25.12||-54.37|
|Employee Benefits Expense||124.74||168.36||145.03||106.45|
|Profit before tax||506.26||295.46||763.90||517.39|
|Total Tax Exps||49.94||-44.86||127.12||-10.65|
|No. of shares||23.36||23.36||23.36||23.36|
|EPS in Rs||19.53||14.57||25.86||18.17|
Comparison With Peers:
|Peers||Revenue Growth||PAT Growth||OPM||ROE||EV||EBITDA||EV/EBITDA||P/E|
|Tata Steel Ltd||9%||-17%||19%||10%||202975||30331||6.69||18.00|
|JSW Steel Ltd||4%||8.38%||25%||17%||206662||20141||10.26||22.00|
|Jindal Steel and Power||5%||NA||34%||11.45%||57000||13184||4.32||12.00|