Shares of Vraj Iron and Steel will be listed at the bourses today. The company has fixed the IPO price at ₹207, at the upper end of the price band ₹195-207. The IPO saw a strong response from all categories of investors, as the issue was subscribed 119.04 times.
The entire offer was a fresh issue worth ₹171 crore.
The company will use the IPO proceeds for expansion projects at its the Bilaspur facility and for general corporate purposes.
While the retail investors’ portion was subscribed over 54.93, that of non-institutions was subscribed by 208.81 time,s and the QIB portion by 163.90.
As part of the IPO, Vraj Iron and Steel had raised ₹51.30 crore from anchor investors by allotting 24,78,259 shares at ₹207 each. The six anchor investors are Volrado Venture Partners Fund IV, Capri Global Housing Finance, Ashika Global Securities, Rajasthan Global Securities, Leading Light Fund VCC – The Triumph Fund and Astorne Capital VCC-Arven.
Shivani Nyati, Head of Wealth, Swastika Investmart Ltd, said the company, a manufacturer of Spong Iron, MS Billets, and TMT bars, is gearing up for a stellar stock market debut. The IPO has captivated investors, generating a phenomenal grey market premium (GMP) of ₹67, a staggering 32.37 per cent above its issue price.
“The company’s financial performance paints a positive picture. Vraj Iron & Steel has a proven track record of consistent profitability over the past three years, demonstrating its ability to generate healthy returns. However, investors should acknowledge certain risks, such as the concentration of manufacturing facilities in a single region and the lack of long-term customer contracts. The steel industry’s inherent competitiveness is another factor to consider,” she added.
Despite these considerations, the IPO’s P/E valuation of 9.48x appears reasonable. This, coupled with the company’s strong fundamentals, subscription, and soaring GMP, suggests a good listing with significant gains for early investors, she further said.
After implementation of the expansion project, the company expects to increase its aggregate installed capacity from 2,31,600 tonnes per annum (TPA) to 500,100 TPA, and its captive power plants’ aggregate installed capacity to 20 MW from 5 MW, the RHP noted.
Aryaman Financial Services is the sole book-running lead manager, while Bigshare Services is the registrar for the IPO. The company’s equity shares will be listed on the NSE and BSE.