Newmalayalam Steel IPO: Date, Price, GMP & Details

Newmalayalam Steel IPO-Complete Overview

Newmalayalam Steel IPO under the SME IPO category is a book-built issue of Rs.41.76 crore by Newmalayalam Steel Limited, incorporated in 2017, and manufactures and galvanizes pipes, tubes, and sheets. One of its electric resistance welding tube mills at its manufacturing facility in Kerala, India, has an installed capacity of 3,500 MT. 

The clients of the company include Jaihind Steel Private Limited, Aashico Ventures LLP, George Infra Private Limited, and others. For reputation and quality, the company has positioned Newmalayalam Steel Limited in terms of brand equity on products marketed under the brand ‘Demac Steel’.

The company took over the entire business of M/s Demac Steel with all its assets and liabilities as a going concern basis (the "Transfer").

Newmalayalam Steel IPO Overview

This Newmalayalam IPO date is 19 December 2024, and its ‘initial public offering’ will end on 23 December 2024. 

The Rs.41.76 crore new SME IPO comprises a wholly fresh issue of 46.40 lac Shares.

This upcoming IPO date is on 19 December 2024. The Newmalayalam Steel IPO Price is Rs.85 to Rs.90 for each Share. 

The expected IPO listing date is Friday, 27 December 2024, and listing at NSE and SME.

To open a demat account and apply for the IPO, Click Here.

Company Financial (Restated)

The company’s revenue fell by -15.78% and PAT decreased by -28.91 % during FYs ending 31 March 2024 and 31 March 2023.

(Amount in Lac)

 

Cash Flows

The cash flows for various activities are shown below:

(Amount in lac)

 

Revenue Breakdown  

(Amount in lac)

Customer-wise Revenue Breakdown  

(Amount in lac)

 

For FY2024

 

For FY2023

 

The Objective of the Issue

The company desires to use the Net Proceeds from the Issue to fulfill its following goals:

• IT/Technological modernization of current production plant.

• Expansion of the current solar power production facility.

• Financing of the costs associated with building a new factory shed and storage facility on the current industrial grounds in Kerala.

• Marketing, Promotion, and Brand Establishment.

• Financing the company's increased working cash needs.

• Expenses associated with the issue.

• General corporate purposes.

 

Peers of Newmalayalam Steel IPO Ltd.

 

Note:-The basic EPS of the peers is for the financial year ended on 31 March 2024.

Evaluation

The Newmalayalam Steel Limited IPO share price is Rs.85 to Rs.90 for each Share.

Evaluation of P/E Ratio

Considering the FY ended 31 March 2024 with an EPS of Rs.3.38 from the last year, the resulting P/E ratio is 26.62x.

Considering the weighted EPS of Rs.4.16 for the last three years, the P/E ratio is 21.63x.

Comparative Analysis With Listed Peers

The average P/E Ratio of the industry is 39.1x.

 

In simple words, the P/E ratio of this IPO (26.62x), compared with the industry’s average P/E of 39.1x, has an undervaluation (on a P/E ratio basis only). Hence the price of the Share seems fully priced for the investors when considered based on the average P/E ratio of the industry.

IPO's Strengths

• Pan-India distribution network and availability at various retail touch points.

• Diverse product portfolio.

• Brand recall and proven track record.

• Pre-existing relationships with clients and suppliers.

• Quality assurance and quality control of products.

• Strategically located manufacturing facilities, modern infrastructure, and integrated facilities focusing on quality.

• Economical procurement and location benefit.
  
  

IPO’s Weaknesses

• Competition in the Marketplace: Thriving within a highly competitive industry sector in the manufacture of steel.

• The Decline in Revenue: Decreased revenue and PAT in FY2024 creates concern around growth sustainability.

• Sector Dependence: Over-reliance on construction and infrastructure for demand generation.

 

Newmalayalam Steel IPO GMP

Newmalayalam Steel IPO GMP today is Rs.0 as of 18 December 2024. With the price band of Rs.90, the estimated Newmalayalam Steel IPO listing price is Rs.90 while writing this information.
 

IPO Timetable (Tentative)

The IPO opening date is from December 19 to December 23, 2024, with allotment on December 24, refund initiation on December 26, and listing on December 27, 2024.

Newmalayalam Steel IPO Details 

The IPO with a Face Value of Rs.10 per share offers a total issue size of 46,40,000 Shares (Rs.41.76 Cr).

Newmalayalam Steel IPO Lot Details 

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (1600 Shares) amounting to Rs.1,44,000 and in multiples thereof, while for HNI investors, the minimum Lot is 2 (3200 Shares) amounting to Rs.2,88,000.

 

IPO Reservation (% of Net Issue)

Promoters And Management of Newmalayalam Steel Ltd.

• Vazhappily Davis Varghese

• Divyakumar Jain

• Ankur Jain

• Mahendra Kumar Jain

• Molly Varghese

• Cyriac Varghese.
  
  

 

IPO Lead Managers

• Khandwala Securities Limited.
  
  

Dividend Policy

The company has not paid dividends during the last three FYs.

Conclusion

Newmalayalam Steel IPO offers an opportunity to invest in a growing company with an established brand, diverse product portfolio, and strategic infrastructure. However, the decline in revenue and profit raises concerns about growth sustainability. Priced moderately compared to industry averages, the IPO appears undervalued on a P/E basis. Investors should assess risks, market competition, and sector dependence before investing.

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DISCLAIMER: NOT a buy or sell recommendation. No investment or trading advice is given. The content is purely for educational and information purposes only. Always discuss with an eligible financial advisor before investing.

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

To Read the Prospectus of the Company Click Here  to Download the DRHP.

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