Sai Swami Metals and Alloys IPO trades in stainless steel products including Dinner Sets, Kadai Sets, Water Bottles, Bowls and other kitchenware by the brand name Dolphin. The company is aiming to raise Rs 15Crore at Rs 60 per share with shares set to be listed on the BSE SME platform.
IPO opens
Apr 30, 2024
IPO Closes
May 3, 2024
IPO Size (Rs.)
₹15.00 Cr
Breakup
Fresh issue 2,500,000 shares
Face Value:
₹ 10
IPO Price in Rs :
₹60 per share
Minimum Lot
2000 Shares
Listing At
BSE SME
NII Quota
~50%
Retail Quota
~50%
Lead Manager
Swastika Investmart Ltd
Registrar
Bigshare
Market maker
Sunflower Broking.
About Sai Swami Metals & Alloys Limited:
Company was incorporated with object to acquire and takeover the running business of sole proprietorship as going concern carried by the promoter in the name and style as ‘Steel Kraft Industries’. Steel Kraft Industries, founded in 2011 was dedicated to the production of advanced kitchen utensils, with a special focus on crafting copper-plated variants. In 2023, due to outdated machinery, the manufacturing plant ceased operations. Sai Swami took over Steel Kraft Industries in February, 2023.
Company and two subsidiaries i.e. Bhagat Marketing Private Limited and Dhruvish Metals LLP having the product portfolio of 3 Categories consisting Cook wears, Kitchenwear and cutery over 1,200 with different model, each presenting a unique look, style, and personality.
Sai Swami Metals and Alloys Limited oversees two subsidiaries, reflecting a diversified presence in the stainless steel kitchenware. One is Dhruvish Metal Industries LLP and other one is Bhagat Marketing Private Limited. Dhruvish Metal Industries LLP, incorporated on 27th February, 2021, operates as a manufacturing unit for utensils with 51% of its shares held by Sai Swami Metals and Alloys Limited. This subsidiary initiated a new plant setup in 2022, specializing in the manufacturing of utensils with a daily capacity of 2 Tons. Additionally, Bhagat Marketing Private Limited, a wholly-owned subsidiary incorporated in 1994, is predominantly owned by Sai Swami Metals and Alloys Limited. This subsidiary focuses on the trading of various stainless steel kitchenware products, including Stain steel Pressure Cookers, Dinner Sets, S.S. Casseroles, S.S. Multi Kadai, S.S. Water Bottles, S.S. Sheets, S.S. Circles, and various types of utensils, all under the Dolphin Brand.
They have a 6 Distributors and more than 150 sub-dealers/stockiest/retailers and strategic alliances.
Financials: Sai Swami Metals and Alloys IPO
Particulars/ Rs Lacs
Dec, 31st, 2023
31st March, 2023
Revenue from operations
3,333.86
626.76
Profit After Tax
179.52
3.83
Share Capital
411.77
1
Net worth
664.47
35.32
EPS Diluted
5.29
38.28
NAV
16.14
353.18
Total Borrowings
743.16
610.23
Post issue Share Capital
661.7
FV
10.0
IPO price
60.0
EPS Fy23
0.1
PE Fy23
1,036.6
EPS Fy24 (annualized)
3.6
PE Fy24 (annualized)
16.6
Market cap in Lacs
3,970
Market cap / Sales
4.75
Sai Swami Metals and Alloys IPO: Salient Points
The Net Proceeds are proposed to be utilized in the manner set forth below for the objectives of the IPO:
S. No.
Particulars
Amount (₹ in) Lakhs
% of GrossIssue Proceeds
% of NetIssue Proceeds*
1.
To Meet Incremental Working Capital Requirements.
600.00
40.00
42.86
2.
To Invest in Subsidiary Company.
400.00
26.67
28.57
3.
To Purchase of Machineries.
200.00
13.33
14.28
4.
General Corporate Purpose.
200.00
13.33
14.28
Total
1,400.00
93.33
100.00
Revenue Break-up:
Dec, 31st, 2023
S. No.
Products
%
Amount
1
S.S. Scraps
64.6
2,153.97
2
S.S. Sheets
5.9
196.62
3
S.S. Patta Patti & Pipe
5.64
184.97
4
Molly & Nickel metal scrap
1.75
58.42
5
S.S. Utensils
8.44
281.73
6
Nickel Alloy scrap
4.04
134.85
7
S. S. Round
2.21
73.78
8
MS Channel Angle
1.47
49.49
9
MS Round
0.56
18.86
10
Steel Coils
0.54
18.3
11
S.S. Angle
0.45
15.46
12
Beam
0.26
9.11
13
MS Pipe
0.42
14.32
14
MS Scrap
3.61
120.35
15
Copper Wound transformer
0.11
3.6
Total
100
3,333.86
Majority of its current revenue is dependent on one product i.e. S.S. Scraps. Out of Total Revenue ₹ 3,333.86 Lakhs and ₹ 626.76 Lakhs representing 64.60% and 100.00% of the revenue was generated from S.S. Scraps for the period ended December 31st, 2023 and 31st March, 2023 respectively.
After this Issue company will enter into the manufacturing of the Steel and other related products by which the revenue of company will be not dependent on the single product.
Company is working in more than 5 States but almost all revenue from Gujarat. They generate almost 98.% revenue from Gujarat. Now they wish to expand pan India.
Company says it items are sold as soon as they are manufactured. (other than kitchenware)
Out Of 33 crore revenue in this fiscal till Dec 23, 8 crore is from manufactured items and rest from trading. This split will move to 50%.
Peers: As per RHP, the company’s listed peer is TTK Prestige (with a P/E of 61).
As per the management – the rise in revenue and profit is due to consolidated numbers of subsidiary company in 9mFY24 results.
Sai Swami Metals and Alloys IPO is being offered at a PE of 16.6x ( 2024 annualized earning) .
Even though its performance cannot be assessed properly due to short operating history , I am likely to apply in Sai Swami Metals and Alloys IPO subject to availability of funds. Overall it looks just OK to me.
GMP as reported on social media has been Rs.47.
Swastika Investmart Ltd as Lead Manager’s to SME IPO has a average to good performace wrt Listing premium. IPOs managed by them include Shree Marutinandan Tubes Limited, Saroja Pharma Industries India Limited, Service Care Limited, Infinium Pharmachem Limited, Cyber Media Research & Services Ltd, Sonu Infratech Limited, Evoq Remedies Limited, Richa Info Systems, Synergy Green Industries Limited, Aartech Solonics Limited, Megastar Foods Limited, ndo US Bio-Tech Limited, Ridings Consulting Engineers India Ltd, Solex Energy Limited, Innovana Thinklabs Limited etc.
SME IPO are much more risky and volatile than mainboard IPOs.
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.