Shyam Steel Industries Ltd, maker of thermo-mechanically treated (TMT) reinforcement bars, has filed a draft prospectus with the capital market regulator Securities and Exchange Board of India (SEBI) to float an initial public offering (IPO).
Under the IPO, the Kolkata-based company will sell fresh shares worth Rs 200 crore; promoter and individual shareholders will offer 6.67 million shares.
The IPO, size estimated at Rs 500 crore ($72.18 million at current exchange rate), may result in 15-17% stake dilution on a post-offer basis and will likely value the company at Rs 2,900-3,000 crore ($418-433 million), VCCircle estimates show.
Another Kolkata-based firm Shyam Metalics and Energy Ltd, which is not related to Shyam Steel, had filed for an IPO last August. Shyam Metalics is an integrated metal production company with a focus on long-steel products and ferrous alloys.
Either Shyam Steel or Shyam Metalics will become the first steel company to list on the mainboard platform of stock exchanges in nearly a decade. A successful IPO and listing will see Shyam Steel join listed peers such as Tata Steel, JSW Steel, Jindal Steel & Power, Kamdhenu, and state-run Steel Authority of India Ltd (SAIL).
In the broader space, Bharat Wire Ropes went public in March 2018. The company is engaged in manufacturing and sales of wire ropes, structural strands, slings and wires that are used in general engineering, elevators, material handling and power transmission sectors.
Here’s a snapshot of the proposed IPO by Shyam Steel:
The IPO size is estimated at Rs 500 crore. The offering comprises fresh shares worth Rs 200 crore and 6.67 million shares of the promoters and individual shareholders.
The company will use Rs 155 crore of the fresh net proceeds towards repayment or advance payment of its borrowing.
Axis Capital, Edelweiss Financial Services, IIFL Holdings, and SBI Capital Markets are the syndicate of investment bankers arranging and managing the share sale.
Cyril Amarchand Mangaldas is offering legal counsel to the company and the selling shareholders. Khaitan & Co. is the legal advisor to the merchant bankers on the IPO.