Vraj Iron and Steel Limited is launching an IPO with a fresh issue of 82.60 lakh shares worth INR 171 crores. The company aims to repay HDFC Bank borrowings and invest in Bilaspur Plant expansion for general corporate purposes.
Vraj Iron & Steel IPO – Important Dates
| Vraj Iron and Steel Limited IPO Date | June 26, 2024, to June 28, 2024 |
| Vraj Iron and Steel Limited IPO Listing Date | July 3, 2024 |
| Vraj Iron and Steel Limited IPO Price | INR 195-207 per share |
| Vraj Iron and Steel Limited IPO Lot Size | 72 shares |
| Vraj Iron and Steel Limited IPO Total Issue Size | INR 171 crores |
| Vraj Iron and Steel Limited IPO Basis of Allotment | July 1, 2024 |
| Vraj Iron and Steel Limited IPO Initiation of Refunds | July 2, 2024 |
| Vraj Iron and Steel Limited IPO Credit of Shares to Demat | July 2, 2024 |
| Vraj Iron and Steel Limited IPO Issue Type | Book Built Issue IPO |
| Vraj Iron and Steel Limited IPO Listing At | BSE NSE |
Vraj Iron and Steel Limited IPO – Company Profile
Vraj Iron and Steel Limited manufactures Sponge Irons, M.S. Billets, and TMT bars under the brand Vraj. It caters to diverse industrial and end-user markets and ensures quality and reliability in every product.
Expanding operations across Raipur and Bilaspur in Chhattisgarh, it currently operates at a 2,31,600 TPA capacity, which is set to increase to 5,00,100 TPA, with projected completion by FY 2025-26.
Their diverse product range, including Sponge Iron, TMT Bar, MS Billets, and by-products, serves industrial customers and end-users. They sell directly and through brokers/dealers, maintaining environmental standards with ISO 14001:2015 certification for the Raipur Plant.
Vraj Iron & Steel Ltd IPO Fundamental Analysis
Vraj Iron and Steel Limited Technologies’ financial analysis reveals a mixed performance. Revenue increased annually but fell short in the nine months. Equity grew steadily, yet the debt-equity ratio rose. Profitability improved, reflected in higher EPS, but RoNW decreased.
- Revenue Trend: The revenue increased from ₹4,140.43 million in March 2022 to ₹5,156.71 million in March 2023. The revenue for the current year’s 9-month period ending December 2023 is INR 3,013.21 million.
- Equity and Liabilities: Equity has shown a consistent increase over the periods, reflecting potential growth and expansion. However, the debt-equity ratio has increased, indicating risen reliance on debt financing.
- Profitability: The profit after tax (PAT) has significantly increased from ₹287.04 million in March 2022 to ₹445.80 million by December 2023. This improvement in profitability could be a source of confidence among investors.
- Earnings per Share (EPS): The diluted EPS has risen from ₹11.61 in March 2022 to ₹18.03 by December 2023, reflecting higher earnings per share for investors.
- Return on Net Worth (RoNW): The RoNW has reduced from 32.94% to 23.78%, indicating a decrease in the company’s ability to generate returns on shareholder equity.
- Financial Position: Total assets have increased, suggesting potential business growth. However, the current ratio has increased, indicating strengthening liquidity and potential challenges in meeting short-term obligations.
- Inventory Turnover Ratio: There’s a significant decrease in the Inventory Turnover Ratio, which might suggest slower sales or inefficient inventory management.
Vraj Iron & Steel IPO Financial Analysis
| Particular | As of 31 March 2022 | As of 31 March 2023 | As of 31 December 2023 |
| Revenue (₹ in million) | 4,140.43 | 5,156.71 | 3,013.21 |
| Equity (₹ in million) | 871.39 | 1,409.15 | 1,874.99 |
| Expenses (₹ in million) | 3,771.95 | 4,484.23 | 2,490.93 |
| Profit and Loss After Tax (₹ in million) | 287.04 | 539.97 | 445.80 |
| Diluted EPS only (₹) | 11.61 | 21.84 | 18.03 |
| Return on Net Worth (%) | 32.94 | 38.32 | 23.78 |
| NAV per Equity Share (₹) | 176.24 | 285.00 | 75.84 |
| Total Assets (in million) | 1,507.74 | 1,915.39 | 2,530.49 |
| Total Liabilities (in million) | 636.35 | 506.24 | 655.5 |
| Debt Equity Ratio | 0.51 | 0.17 | 0.27 |
| Current Ratio (in times) | 1.73 | 2.88 | 4.55 |
| Inventory Turnover Ratio | 15.22 | 16.21 | 9.79 |
Vraj Iron and Steel Limited IPO Peer Comparison
Vraj Iron & Steel Limited shows moderate revenue and EBITDA. At the same time, Sarda Energy and Minerals Limited, Godawari Power and Ispat Limited, and Shyam Metalics and Energy Limited exhibit more robust financial performance in revenue and profitability.
| Company | Face Value per Equity Share ( ₹) | Revenue from Operations (₹ in Million) | EPS (₹) | RoNW (%) | NAV per Equity Share (₹ in million) |
| Vraj Iron & Steel Limited | 10 | 5,156.71 | 21.84 | 38.32 | 285 |
| Sarda Energy and Minerals Limited | 1 | 42,119.00 | 169.94 | 17.71 | 967.72 |
| Godawari Power and Ispat Limited | 5 | 57,530.40 | 61.16 | 20.31 | 277.09 |
| Shyam Metalics and Energy Limited | 10 | 126,101.8 | 33.26 | 11.85 | 280.79 |
Vraj Iron & Steel Ltd IPO Objective
The main objective of Vraj Iron and Steel Limited is to secure funding for the “Expansion Project” at Bilaspur Plant, focusing on two key areas: a) Repayment or prepayment of borrowings from HDFC Bank and b) Direct capital expenditure for the expansion project.
- Funding for Capital Expenditure towards the “Expansion Project” at Bilaspur Plant:
- Repayment or prepayment of borrowings from HDFC Bank obtained by the company for the capital expenditure towards the “Expansion Project” at Bilaspur Plant: The company intends to utilize INR 70 crores out of the sanctioned INR 8.5 crores HDFC Bank loan for the Bilaspur Plant expansion project, aiming to reduce debt servicing costs and facilitate further business growth.
- Capital Expenditure towards the “Expansion Project” at Bilaspur Plant: The company plans to utilize INR 59.5 crores of Net Proceeds for the “Expansion Project” at Bilaspur Plant, allocating funds for Repayment of HDFC Bank borrowings and direct capital expenditure.
- General Corporate Purposes: The Company will balance funds towards general corporate purposes, including strategic initiatives, partnerships, debt reduction, exigencies, facility renovation, brand promotion, and other operational needs.
Vraj Iron & Steel IPO Risks And Challenges
Vraj Iron and Steel Limited’s risks include operational vulnerabilities from disasters and pandemics, price fluctuations in steel markets, and negative cash flows that impact financing capabilities and liquidity for future projects.
- Their manufacturing units in Raipur and Bilaspur, Chhattisgarh, and the ongoing Expansion Project in Bilaspur are vital for meeting customer demand. Operational risks could impact production and reputation, including those from disasters and pandemics.
- Fluctuations in steel prices, influenced by various factors, pose risks to the company’s profitability and growth. Price volatility, impacted by raw material costs and economic trends, may lead to operational challenges and financial losses.
- The company has experienced negative cash flows from operating, investing, and financing activities in recent periods, which may persist, impacting its ability to finance projects and meet liquidity needs.
Vraj Iron & Steel Ltd IPO – Industry & Market Potential
India, the world’s second-largest steel producer and consumer, aims for significant growth in per capita consumption to 158-160 kg by FY31. The industry’s multiplier effects on GDP and employment underscore its importance in India’s economic future.
India’s domestic crude steel production grew at a 3.3% CAGR over the past five years, reaching 126.3 MT in FY23. Large manufacturers operate at 80-90% capacity, with expansions underway to achieve 300 MT capacity by FY31.
International coal prices have fluctuated due to various factors, such as production cutbacks, supply disruptions, and geopolitical tensions. Despite recent softening, they are expected to remain elevated in FY24, driven by sustained global demand, particularly from China and India.
Vraj Iron and Steel Limited IPO – Type of Offer
Vraj Iron and Steel Limited is launching an IPO with a fresh issue of 82.60 lakh shares worth INR 171 crores. The company aims to repay HDFC Bank borrowings and invest in Bilaspur Plant expansion for general corporate purposes.
Vraj Iron and Steel Ltd IPO Offer Size
The offer size of Vraj Iron and Steel Limited is INR 171 crores, consisting of a fresh issue of 82.60 lakh shares. The company seeks funds to repay HDFC Bank borrowings and invest in Bilaspur Plant expansion for general corporate purposes.
Vraj Iron and Steel Limited IPO Allotment Structure
Vraj Iron and Steel Limited’s allocation will be as follows: 50% for Qualified Institutional Buyers (QIB), 35% for Non-Institutional Investors (NII), and 15% for Retail Individual Investors (RII) according to SEBI regulations.
● Qualified Institutional Buyers (QIB): As per SEBI regulations, 50% of the shares offered through the IPO will be reserved for Qualified Institutional Buyers. These include entities such as banks, mutual funds, and insurance companies.
● Non-Institutional Investors (NII): 35% of the shares will be reserved for Non-Institutional Investors. These typically include corporate bodies or individuals investing more than Rs.2 lakhs.
● Retail Individual Investors (RII): The remaining 15% of the shares will be allotted to Retail Individual Investors. These individual investors apply for shares with a total value of less than Rs.2 lakhs.
How to apply for a Vraj Iron and Steel Limited IPO?
To apply for the Vraj Iron and Steel Limited IPO through Alice Blue, you would typically follow these steps:
Open a Demat and Trading Account: If you don’t have one already, you must open a Demat and trading account with Alice Blue.
- Check for IPO Details: Once your account is active, you can check for the Vraj Iron and Steel Limited IPO details in the IPO section of the Alice Blue platform.
- Place the Bid: Enter the number of shares you wish to buy and place your bid within the IPO’s price band.
- Submit the Application: Confirm all your details and submit your application.
You can apply for the Vraj Iron and Steel Limited IPO at Alice Blue in just a few clicks!
Check Allotment Status: After the allotment process, you can check the allotment status to see if you have received any shares.
Please note that the allotment of shares is not guaranteed and will depend on the demand for the IPO.
How do you check Vraj Iron and Steel Limited’s IPO Allotment Status?
Checking the allotment status of an IPO in Alice Blue is usually straightforward. Please follow these general steps:
- Log in to your Alice Blue Account: You can do this through the Alice Blue website or their trading app.
- Navigate to the Portfolio or IPO Section: This might differ based on the layout of Alice Blue’s platform, but generally, you can find the status of your IPO application under the ‘Portfolio’ or ‘IPO’ section.
- Find the IPO Allotment Status: Look for a sub-section called ‘IPO Allotment Status’ or something similar. This is where you can see the status of the IPOs you have applied for.
- Select the Vraj Iron and Steel Limited IPO: If you have applied for multiple IPOs, there might be a dropdown menu or a list where you can select the IPO you are interested in. Select the Vraj Iron and Steel Limited IPO.
- Check the Status: The status of your application should be displayed here. If the shares have been allocated to you, it would be mentioned here.
If you face any issues, it’s recommended that you contact Alice Blue’s customer support for detailed assistance.
Apart from Alice Blue, there are other ways to check the allotment status of the Vraj Iron and Steel Limited IPO:
● Registrar’s Website: Visit the website of Bigshare Services Private Limited, the registrar of the Vraj Iron and Steel Limited IPO. On the homepage, look for the ‘IPO Allotment Status’ option. You must enter your PAN, application, or Demat account number to check your allotment status. Click on the ‘Submit’ button to view your IPO allotment status.
● BSE NSE: You can also check the allotment status on the official websites of the Bombay Stock Exchange (BSE) National Stock Exchange (NSE). You would need your application number and PAN to check the status.
Please note that the allotment status will only be available after completing the allotment process, a few days after the IPO window closes.
Vraj Iron and Steel Limited Ltd IPO Offer Registrar
The registrar for the Vraj Iron and Steel Limited IPO is Bigshare Services Private Limited. They are responsible for ensuring the IPO allotment and refund processes are carried out smoothly.
Contact information for the registrar:
Bigshare Services Private Limited
S6-2, 6th Floor, Pinnacle Business Park,
Mahakali Caves Road, Next to Ahura Centre,
Andheri East, Mumbai – 400093
Maharashtra, India
Tel: +91 22 6263 8200
Email: [email protected]
Website: www.bigshareonline.com
Vraj Iron and Steel Limited Limited IPO – FAQs
The allotment date of the Vraj Iron and Steel Limited IPO is July 1, 2024.
The price band of the issue is INR 195-207 per share per share.
The offer size of Vraj Iron and Steel Limited is INR 171 crores, consisting of a fresh issue of 82.60 lakh shares. The company seeks funds to repay HDFC Bank borrowings and invest in Bilaspur Plant expansion for general corporate purposes.
The listing date of Vraj Iron and Steel Limited’s IPO is July 3, 2024.
