The price band for the IPO of Vraj Iron and Steel, which is scheduled to open on June 26, is set at ₹195 to ₹207 per equity share. The company aims to raise ₹171 crore through this initial public offering, which is entirely a fresh issue of 0.83 crore shares.
The net proceeds from the public offer are intended to be used towards funding capital expenditure for the “Expansion Project” at the Bilaspur Plant, repayment or prepayment of borrowings from HDFC Bank used for capital expenditure at the Bilaspur Plant, and general corporate purposes.
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The issue is being made through the book-building process, with up to 50% of the net issue available for allocation to qualified institutional buyers on a proportionate basis, 15% to non-institutional investors, and a minimum of 35% of the net issue is available for allocation to retail investors on a proportionate basis.
The minimum lot size for retail investors is set at one (72 shares), requiring a minimum investment of ₹14,904 to participate in the IPO. For the SNIIs (small non-institutional investors), the minimum lot size investment is 14 lots (1008 shares), totaling ₹208,656.
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Aryaman Financial Services Limited is the book-running lead manager of the Vraj Iron and Steel IPO, while Bigshare Services Pvt. Ltd. is the registrar for the issue.
Vraj Iron and Steel is engaged in the manufacturing of sponge iron, M.S. billets, and TMT bars under the brand Vraj. It sells its products directly as well as through brokers and dealers.
It currently operates through two manufacturing plants, which are located at Raipur and Bilaspur in Chhattisgarh and spread across 52.93 acres. As of March 31, 2023, the aggregate installed capacity of its manufacturing plants was 2,31,600 tons per annum (“TPA”) (comprising intermediate and final products).
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The company is in the process of increasing the capacities of its existing manufacturing plants and captive power plant, which is expected to increase its aggregate installed capacity (comprising of intermediate and final products) from 2,31,600 TPA to 5,00,100 TPA, and captive power plants’ aggregate installed capacity from 5 MW to 20 MW, according to the company’s DRHP report.
The company expects the proposed expansion to become operational in this current fiscal year.
Currently, the company has a captive power plant with an installed capacity of 5 MW, which helps it reduce energy costs. Additionally, operating a captive power plant will decrease its exposure to disruptions to the electricity grid in times of power outages that can otherwise lead to costly production disruptions.
Disclaimer: We advise investors to check with certified experts before taking any investment decisions.
