Shyam Steel Industries Ltd, a Kolkata-based company that makes thermo-mechanically treated reinforcement bars, has received regulatory approval to float an initial public offering.
The Securities and Exchange Board of India (SEBI) issued its final observations on the company’s IPO last week, the capital markets regulator’s website shows.
This makes Shyam Steel at least the 20th company to receive regulatory clearance this year to float an IPO. SEBI had approved 72 IPO proposals last year and 46 in 2017.
Shyam Steel had filed a draft prospectus for the IPO in June.
Under the IPO, the company will sell fresh shares worth Rs 200 crore while its promoter and some individual shareholders will offer 6.67 million shares.
The total IPO size is estimated at Rs 500 crore ($71 million). It may result in 15-17% stake dilution on a post-offer basis and will likely value the company around Rs 2,900-3,000 crore, VCCircle estimates show.
The company plans to use Rs 155 crore of the fresh net proceeds to repay its debt.
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. It got SEBI approval for the IPO in December last year.
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. They will join peers such as Tata Steel Ltd, JSW Steel Ltd, Jindal Steel & Power and state-run Steel Authority of India Ltd on the stock exchanges.
Axis Capital, Edelweiss Financial Services, IIFL Holdings and SBI Capital Markets are managing Shyam Steel’s share sale.