The Hindu Business Line : S.A.L. Steel IPO price band at Rs 12-14

Mr Rajendra V. Shah, CMD (right), S.A.L Steel Ltd, with Mr Harish Bahl, Executive President, SBI Capital Markets Ltd, at a press conference held in Mumbai on Monday. - Paul Noronha

Mumbai , Oct. 25

S.A.L. Steel Ltd is entering the capital market with a public issue of 4.2 crore equity shares of face value Rs 10 each.

The entire issue is to be made through the book building process and the price band has been fixed between Rs 12 and Rs 14.

The books will open on November 1 and close on November 5. At a press briefing, Mr Rajendra Shah, Chairman of the company, ascribed the premium sought to the short time left for project commissioning and investors likely getting returns that much earlier.

S.A.L. Steel is a backward integration project by the Rs 1,038 crore-Shah Alloys, the country's second biggest stainless steel manufacturer.

It intends to produce sponge iron, ferro alloys (mostly for consumption by Shah Alloys) and also set up rolling mills.

Currently, the company is owned 67.87 per cent by Shah Alloys.

The project cost is Rs 203.31 crore and is being funded through Rs 51 crore of promoters' contribution, Rs 114 crore of term loans and the proceeds of the public issue, an official statement said.

Of the 4.2 crore shares on offer, the company has reserved 10 per cent for allotment to the shareholders of Shah Alloys.

From the balance net offer to the public of 3.78 crore shares, 50 per cent will be allotted on a discretionary basis to institutional buyers and 25 per cent to non-institutional investors.

The remaining 25 per cent will be available for retail investors, the retail portion being allotted on a proportionate basis.

The public offer constitutes 44.48 per cent of the post paid-up equity capital of the company, the statement said.

Post-issue Shah Alloys' holding in S.A.L. Steel will decline to 34.33 per cent.