Siyaram Recycling Industries Limited IPO

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1. Incorporation and Business Focus:

  • Siyaram Recycling Industries Limited was incorporated in 2007.
  • The company is primarily engaged in three key activities: segregation of brass scrap, manufacturing of brass ingots, billets, and rods, and manufacturing of brass-based components, specifically plumbing and sanitary parts.

2. Manufacturing Units and Products:

a) The company operates from three manufacturing units located in the district of Jamnagar.

b) Manufacturing of Brass-based Components (Plumbing and Sanitary Parts):

(i) Products include brass inserts, brass ceramic cartridges (brass spindles), brass valves, extension nipples, etc.

(ii) Customers include well-known brands such as Hindware, ROCA, Eauset, Somany, Supreme, AGI Greenpac (formerly HSIL), and Ashirvad Pipes.

(iii) Revenue from this segment was ₹5,277.44 lakhs (12.47% of total revenue) in Fiscal 2022 and ₹3,550.52 lakhs (7.20% of total revenue) in Fiscal 2023.

3. Manufacturing of Brass Ingots, Billets, and Rods:

a) Products are manufactured and exported to China, with additional supply to Indian customers such as Astral Limited, Kajaria Bathware, and AGI Greenpac.

b) Revenue from this segment was ₹13,337.55 lakhs (31.51% of total revenue) in Fiscal 2022 and ₹19,864.72 lakhs (40.30% of total revenue) in Fiscal 2023.

4. Segregation of Brass Scrap:

a) Brass scrap is procured internationally from the USA, UK, Europe, and the Middle East.

b) Segregation is done at Unit-III in Jamnagar, and the resulting brass scrap honey is primarily sold in Gujarat.

c) Revenue from the sale of brass scrap was ₹23,646.29 lakhs (55.87% of total revenue) in Fiscal 2022 and ₹25,830.18 lakhs (52.41% of total revenue) in Fiscal 2023.

5. Brass and its Properties:

a) Brass is described as an alloy made from Copper and Zinc, known for its electrical conductivity, heat resistance, and corrosion resistance.

b) Recycling brass is emphasized for conserving natural resources, reducing energy consumption, and minimizing the environmental impact of mining and processing new metals.

6. Market Presence and Exports:

a) The company operates through three facilities in the district of Jamnagar, a hub for brass components.

b) It has an installed capacity for manufacturing brass billets, ingots, rods, and components.

c) Products are marketed to 18 states and Union Territories in India, with a significant portion of revenue coming from Gujarat.

d) Export destinations include China, Germany, Belgium, and Oman.

e) Revenue from exports constituted 32.94% and 26.78% of total revenue for Fiscal 2023 and 2022, respectively.

7. Promoters and Experience:

a) The promoters, Mr. Ramgopal Ochhavlal Maheshwari and Mr. Bhavesh Ramgopal Maheshwari, have more than 34 and 6 years of experience in the brass industry, respectively.

b) Their experience is highlighted for contributing to the company’s success, with a deep understanding of the brass market, strong contacts with clients and suppliers, and effective decision-making capabilities.

Objects of the Siyaram Recycling Industries Limited IPO:

The details of the utilization of the Net Proceeds are set forth herein below: i. Repayment of a portion of certain borrowing availed by the Company and ii. General Corprorate Purposes
DRHP of Siyaram Recycling Industries Limited IPO

Siyaram Recycling Industries Limited IPO Details:

Open Date: Dec 14 2023
Close Date: Dec 18 2023
Total Shares: 4,992,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue IPO
Issue Size: 22.96 Cr.
Lot Size: 3000 Shares
Issue Price: ₹ 43 - 46 Per Equity Share
Listing At: BSE SME
Listing Date: Dec 21 2023

Promoters And Management:

Ramgopal Ochhavlal Maheshwari is the Chairman & Wholetime Director of our Company. He is a visionary entrepreneur and has played a pivotal role in setting up and expanding business operations of our Company. He has a work experience of over 34 years in the brass industry. He has completed his Bachelor in Commerce from Vikram University, Ujjain. He currently looks after the overall management of the Company. Under his guidance, our Company has witnessed continuous growth. Bhavesh Ramgopal Maheshwari is the Managing Director of our Company. He has completed his Bachelor of Commerce in 2014 from Ahmedabad University. He has an experience of around 6 years in the brass industry. He is currently looking after the production and sales and marketing function of our Company. He has been awarded with Indian Achievers Award by Indian Acheivers Forum for Business Excellence in 2019 and for Business Leadership in 2022. Madhu Ramgopal Maheshwari is the Non-Executive Director of our Company. She has an experience of around 22 years in the administration field. She has completed her Secondary School from Mayon High School, Himmatnagar, Gujarat in year 1983

Financials of Siyaram Recycling Industries Limited IPO:

Particulars ( In Lakhs )
2021
2022
2023
Revenue from Operations 13,867 42,323 49,287
Other Income 106 321 499
Total Revenue 13,973 42,644 49,786
Raw Material Consumption 11,962 37,025 45,130
Changes in Inventories 451 592 -0.2
Employee benefits expenses 352 325 342
Other Expenses 723 3,829 2,622
EBITDA 485 873 1,692
Depreciation & Amortisation 136 178 169
Finance Cost 154 245 443
EBIT 349 695 1,523
OPM (%) 3.47% 2.05% 3.40%
PBT 195 450 1081
Tax 53 127 315
PAT 142 322 765
NPM (%) 1.02% 0.76% 1.54%
No.of Shares 187.97 187.97 187.97
EPS 0.75 1.71 4.07

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Siyaram Recycling Industries Limited 493 8 4.07 11.3 46 86
Sprayking Agro Equipment Limited 19 2 1.60 131.0 210 222
Poojawestern Metaliks Limited 31 1 1.05 22.6 32.7 33
* All the data is as per FY23.

Recommendation on Siyaram Recycling Industries Limited IPO:

Review and Recommendation of Siyaram Recycling Industries SME IPO by IZ team is 4/10

1. Incorporation and Business Focus:.

a) Incorporated in 2007 b) Engaged in segregation of brass scrap, manufacturing of brass ingots, billets, rods, and brass-based components (mainly plumbing and sanitary parts).

2. Manufacturing Units and Products:

a) Operates from three units in Jamnagar. b) Brass-based Components: Includes brass inserts, cartridges, valves, extension nipples. Clients: Hindware, ROCA, Eauset, Somany, Supreme, AGI Greenpac, Ashirvad Pipes. Fiscal 2022 revenue: ₹5,277.44 lakhs (12.47% of total); Fiscal 2023: ₹3,550.52 lakhs (7.20% of total). c)Brass Ingots, Billets, Rods: Exported to China and supplied to Astral Limited, Kajaria Bathware, AGI Greenpac. Fiscal 2022 revenue: ₹13,337.55 lakhs (31.51%); Fiscal 2023: ₹19,864.72 lakhs (40.30%). d) Segregation of Brass Scrap: Procured internationally, segregated in Jamnagar, sold mainly in Gujarat. Fiscal 2022 revenue: ₹23,646.29 lakhs (55.87%); Fiscal 2023: ₹25,830.18 lakhs (52.41%).

3. Brass and its Properties:

a) Alloy of Copper and Zinc. b) Known for electrical conductivity, heat resistance, corrosion resistance. Emphasis on recycling brass for resource conservation, energy reduction, and environmental impact minimization.

4. Market Presence and Exports:

a) Facilities in Jamnagar, a hub for brass components. b) Installed capacity for manufacturing brass billets, ingots, rods, components. c) Marketed in 18 Indian states and UTs, major revenue from Gujarat. d) Exports to China, Germany, Belgium, Oman. Exports: 32.94% (Fiscal 2023), 26.78% (Fiscal 2022) of total revenue.

5. Raw Material Cost

The cost of raw materials consumed for Fiscal 2023 was ₹ 451 Cr, which represented 91.57% of the revenue from operations. That means the Gross Margins in the business is very low at around 9%. And, The price of brass and brass scrap primarily depends on the Copper price on London Metal Exchange (LME).

6. Promoters and Experience:

Mr. Ramgopal Ochhavlal Maheshwari (>34 years experience) and Mr. Bhavesh Ramgopal Maheshwari (>6 years experience). Noted for their deep industry knowledge, client and supplier contacts, and decision-making skills.

7. Financials of Siyaram ReCycling SME IPO

1. The revenue has grown from INR 140 Cr in Fy21 to 497 Cr in Fy23. 2. The PAT has increased from INR 1.42 Cr in Fy21 to INR 7.65 Cr in Fy23. 3. Post-IPO total outstanding shares = ~1.87 Cr 4. EPS = INR 4.09, P/E = 11.24x , the valuation looks reasonable. 5. It is a very low margin business wherein the EBITDA margins and PAT margins are 2.35% and 1.55% in Fy23.

Lead Manager of Siyaram Recycling Industries Limited IPO:

  1. Hem Securities Limited

Registrar of Siyaram Recycling Industries Limited IPO:

  1. Cameo Corporate Services Limited

Company Address:

Siyaram Recycling Industries Limited Plot No. 6 & 7, Village: Lakhabaval Post Khodiyar Colony, Jamnagar-361006 Phone: +91-75750-20500 Email: cs@siyaramindustries.co.in Website: https://www.siyaramindustries.co.in/

Discussion on Siyaram Recycling Industries Limited IPO:

1 Comment

    Very low margins business and highly competitive industry. So, avoid.

    Reply

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