Markets

Shyam Metalics and Energy to raise ₹1,107 crore through IPO

Our Bureau Mumbai | Updated on March 01, 2021

This is the second attempt by the firm to raise funds through initial offer

Kolkata-based Shyam Metalics and Energy Ltd (SMEL), a manufacturer of long-steel and ferro-alloy products, has refiled its Draft Red Herring Prospectus (DRHP) with markets regulator to raise ₹1,107 crore through an initial public offering (IPO).

This is the second attempt by the firm to raise funds through IPO. The company had first filed DRHP in 2018 and received SEBI approval later in 2019. However, due to the pandemic and tepid market sentiments, it deferred the plans.

The IPO comprises a fresh issuance of ₹657 crore and an Offer For Sale (OFS) of up to ₹450 crore. The OFS is by promoters Subham Capital, Subham Buildwell, Kalpataru Housefin & Trading, Dorite Tracon, Narantak Dealcomm and Toplight Mercantiles.

The company intends to utilise the net proceeds from the fresh issue for repayment of ₹470 crore debt and for other general corporate purposes.

The portion reserved for Qualified Institutional Buyers will be up to 50 per cent of the offer, Non-Institutional Investors 15 per cent, and the remaining 35 per cent is reserved for retail investors.

The company currently operates three manufacturing plants -- Sambalpur in Odisha, and Jamuria and Mangalpur in West Bengal – and sells thermo mechanically treated bars and structural products under the SEL brand name. As on December 31, 2020, it had a manufacturing capacity of 5.71 million tonne per annum, which will be increased to 11.60 MTPA by FY2025.

Additionally, SMEL is looking to enter in segments such as pig iron, ductile iron pipes and aluminum foil and is in the process of commissioning an aluminum foil rolling mill at Pakuria in West Bengal with a proposed installed capacity of 0.04 MTPA, expected to become operational by FY2022.

ICICI Securities Ltd, JM Financial Ltd, Axis Capital Ltd, IIFL Securities Ltd and SBI Capital Markets Ltd are the book-running lead managers for the IPO.

Published on March 01, 2021

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