Steel manufacturing company Shyam Metalics and Energy Ltd is set to launch an IPO to raise Rs 1107 crore. For this, the company has filed a draft red herring prospectus (DRHP) with the market regulator SEBI. As against DRHP, the company will issue fresh equity shares worth Rs 657 crore for this public issue, while the promoters of the company and the existing investor will issue shares worth Rs 450 crore for this IPO through Offer for Sale (OFS).
The company also plans to bring pre-IPO placements before this IPO. The company is in talks with investment bankers to bring in a Rs 250-crore Pre-IPO Placement. The Rs 657 crore raised through this IPO will be used by the company to repay its and its subsidiary SSPL. Shyam Metalics has appointed ICICI Securities, Axis Capital, IIFL Securities, JM Financial (JM Financial) and SBI Capital (SBI Capital) as its lead managers for this IPO.
There is so much debt on the company
Let me tell you that till 31 December 2020, the total debt (Debt) on Shyam Metalics was Rs 381.12 crore. While its subsidiary SSPL had a debt of Rs 398.60 crore. That is, the company has a total debt of Rs 886.29 crore. The total revenue of the company till the December quarter of FY 2020-21 was Rs. 3933.08 crore as against the total revenue of Rs. 3283.09 crore of the company during the period last year. Kolkata-based Shyam Metalics reported a net profit of Rs 456.32 crore in the December quarter. Whereas in the last financial year Q3, the company had a net profit of only Rs 260.36 crore.
The company has 3 steel manufacturing units
The company currently has 3 steel manufacturing units in Sambalpur in Odisha and Mangalpur in West Bengal along with Jamuria. The company produces more than 5.7 million tonnes of steel every year. Apart from this, the company also has a power plant of 227MW capacity. In addition, the company is setting up an aluminum foil rolling mill in Pakuria, West Bengal, which will become operational this year.