Vraj Iron and Steel LTD IPO: Review, Valuation, Date & GMP

Vraj Iron and Steel LTD IPO-Complete Overview

Vraj Iron and Steel Limited was founded in June 2004 and produces M.S. Billets, TMT bars, and sponge iron under the Vraj brand. The company operates two manufacturing units in Raipur and Bilaspur, Chhattisgarh, which cover 52.93 acres. As of March 31, 2023, the production plants had a total installed capacity of 231,600 tons per year, including intermediate and final products. The company now has a manufacturing capacity of 57,600 TPA of MS Billets, which can be used by its rolling mills to produce 54,000 TPA of TMT Bars.

The company's product line includes Sponge Irons, TMT Bars, MS Billets, and by-products Dolochar, Pellets, and Pig Iron, which are sold to both industrial and end-users. The Raipur Plant achieved the Environmental Management System Certification under the new ISO 14001:2015 standard.

With 298 permanent employees, 7 at the Registered Office, 200 in the Raipur Plant, 87 at the Bilaspur Plant, and 235 contract workers, the company employed 533 people as of June 30, 2023.

Dear readers, we are pleased to provide details about the approaching IPO. The company plans to launch its IPO on June 26, 2024.

Let's take a closer look at the IPO's offerings below.

Vraj Iron and Steel Limited IPO Overview

Vraj Iron and Steel Limited IPO is a MainBoard book-built issue of Rs.171 crore with a whole Fresh Issue of 0.83 crore shares (amounting to Rs.171 crore) out of which 35% is allocated to retail investors, 50% to institutional investors and 15% to non-institutional investors. 

The IPO will be available to investors on June 26, 2024, and conclude on June 28, 2024. The anticipated listing date for the IPO is Wednesday, July 3, 2024, and it will be held on the BSE and NSE. The price band of the share is Rs.195 to Rs.207.

If You want to apply for this IPO, Click Here to Open a Demat Account.

 

 

Company Financial

Vraj Iron and Steel Limited's revenue climbed by 24.87%, while profit after tax (PAT) increased by 88.12% during the fiscal years ending March 31, 2023, and March 31, 2022. 

Below is the synopsis of the company's financial data for the financial year that concluded on 31 March 2023.

• The company’s total revenue is over Rs.500 crore.

• The net worth of the company has climbed by 61.67%.

• The company's EBITDA is gained by 59.58%.

• The total assets of the company rose by 25.92%

• The Liabilities of the company fell by 10.90%.

(Amount in crore)

Period	31 Dec 2023	31 Mar 2023	31 Mar 2022
Total Assets	253.05	191.54	150.77
Total Revenue	304.81	517.42	414.38
PAT	44.58	54.00	28.70
Net worth	187.50	140.92	87.14
Reserve & Surplus	162.78	135.97	82.19
Total Borrowings	49.30	22.98	42.51

 

Revenue Bifurcation

Below is the revenue breakdown for various activities.

(Amount in Crore)

Net Cash flow in various Activities	30 June 2023	FY 2023	FY 2022
Net Cash Flow Operating Activities	138.46	628.73	87.44
Net Cash Flow Investing Activities	51.40	403.68	13.59
Net Cash Flow Financing Activities	86.25	225.19	72.15

 

The Objective of the Issue

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

• Capital Funding for the "Expansion Project" at the Bilaspur Plant:

• Payback or prepayment of loans taken out by the business from HDFC Bank to finance capital expenditures for the "Expansion Project" at the Bilaspur Plant; an

• Investments in capital for the "Expansion Project" at the Bilaspur Plant

• General corporate goals.

 

 

Peers of Vraj Iron and Steel IPO

Company Name	Face Value (Rs.)	EPS (Rs.)	P/E
Sarda Energy & Minerals Ltd.	1	169.94	13.70x
Godawari Power & Ispat Ltd.	5	61.16	10.12x
Shyam Metalics And Energy Limited	10	33.26	15.90x

 

Evaluation

The price of this IPO is Rs.195 to Rs.207 for each share.

Evaluation of P/E Ratio

The P/E Ratio of Vraj Iron and Steel Limited IPO is 9.48x.

Comparative Analysis with Listed Peers

The average P/E Ratio of the industry is 20.1.

Particulars	P/E Ratio
Highest	68.80
Lowest	4.9
Average	20.1

 

IPO's Strengths

• Coordinated and deeply grounded fabricating arrangement.

• Producing plants are decisively found, upheld by strong design, prompting cost efficiencies and a steady production network.

• Amount and Normal cost of Coal secured by the organization.

• Enhanced item blend in areas of strength for with on esteem added items.

• Experienced Advertiser, Board, and supervisory group.

• A steady history of development and monetary execution.

IPO’s Weaknesses 

• Both of its current assembling offices are packed in a solitary district for example Raipur and Bilaspur, Chhattisgarh. Further, its Extension Undertaking is additionally being executed at Bilaspur, Chhattisgarh and consequently, the organization faces topographical fixation-related gambles.

• 100 percent of its income is from the offer of the organization's steel items, for example, TMT Bars, MS Billets, Wipe Iron, and other related things. Uncertainty in interest and forecasting in the iron and steel sector is common and recurring. A reduction in steel costs might affect its business, consequences of tasks, possibilities, and monetary conditions.

• The organization has encountered negative incomes from working, putting, and funding in the past, and it might have negative incomes later on.

• Capital consumption to the tune of Rs. 1,295 million expected towards the "Extension Undertaking" at Bilaspur would be supported out of the Net Returns of the Issue. Consequently, the organization has not made any substitute plans for something very similar. Any setback in raising/meeting the equivalent could antagonistically influence its development plans, tasks, and monetary execution.

• Assuming the organization can't effectively carry out its Extension Task, including the Hostage Power Plant, the organization's aftereffects of activities and monetary condition could be antagonistically impacted.

• A greater part of its Heads of Organization don't have related knowledge of being an overseer of a publicly recorded organization.

• The organization doesn't have long-haul concurrences with its clients and the organization determines a critical part of its income from its best 10 clients. The deficiency of, or a critical decrease in the income the organization gets from, at least one of these clients would affect its business, consequences of tasks, and monetary condition.

 

IPO GMP Today

Vraj Iron and Steel Limited IPO’s latest GMP is Rs.75.

 

Vraj Iron and Steel Limited IPO Timetable (Tentative)

The IPO is scheduled from June 26 to June 28, 2024, with allotment on July 1, refund initiation on July 2, and listing on July 3, 2024.

Events	Date
IPO Opening Date	June 26, 2024
IPO Closing Date	June 28, 2024
IPO Allotment Date	July 1, 2024
Refund initiation	July 2, 2024
IPO Listing Date	July 3, 2024

 

Vraj Iron and Steel Limited IPO Details 

The IPO with a face value of Rs.10 per share is set to start on June 26, close on 28 June, and offer a total issue size of 8,260,870 shares (amounting up to Rs.171.00 crore) a whole fresh issue.

IPO Opening & Closing date	June 26, 2024 to June 28, 2024
Face Value	Rs.10 per share
Issue Size	8,260,870 Shares (aggregating up to Rs.171.00 Cr)
Offer for Sale	-
Fresh Issue	8,260,870 Shares (aggregating up to Rs.171.00 Cr)
Listing at	NSE, BSE
Issue Type	Book Built Issue IPO
Registrar	Bigshare Services Pvt Ltd

 

 

Vraj Iron and Steel Limited IPO Lot Details 

The IPO allows retail investors to invest in a minimum and maximum of 1 lot (72 shares) amounting to Rs.14904, and 13 lots (936 shares) amounting to Rs.193752 respectively, while for HNI investors, the minimum lot is 14 (1008 shares) amounting to Rs.208,656.

Minimum Lot Investment (Retail)	1 lot
Maximum Lot Investment (Retail)	13 lots
S-HNI (Min)	14 lots
S-HNI (Max)	67 lots
B-HNI (Min)	68 lots

 

Vraj Iron and Steel Limited IPO Reservation

QIB Share Portion	50%
Retail Investors Share Portion	35%
NII Shares Portion	15%

 

Promoters and Management of Vraj Iron and Steel LTD IPO

• Gopal Sponge and Power Private Limited

• V. A. Transport Private Limited 

• Vijay Anand Jhanwar

Pre-issue Promoter shareholding	99.99%
Post-issue Promoter shareholding	-

 

Vraj Iron and Steel LTD IPO Lead Managers

Aryaman Financial Services Limited

 

 

Dividend Policy

The company has no such Dividend policy. 

 

Conclusion

The company has noticed a fall in its total revenue and an increase in net worth in the previous Financial Year(s). To fulfill its objectives, the company is currently conducting an initial public offering (IPO) for the general public.

We believe the information offered in this blog helps you learn about the company's financial performance. So this blog will be very useful to you if you are looking for information about the approaching IPO since it will give you reliable information about the company's, insights, financials, and past performance. If this informative blog piques your interest, you may be interested in reading our other related and useful posts on our website.

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.

 

We believe this blog would be very beneficial to you if you are looking for such information related to this upcoming IPO since this blog would provide you with accurate information about the company's, insights, financials, and past performance. If this informative blog matches your interest, you might be interested in reading our other related useful blogs on our website.

Disclaimer: This IPO analysis is only for informational purposes and should not be considered as investment advice. Always do your research and consult with a financial advisor.

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