Sai Swami Metals and Alloys IPO (BSE SME) Overview

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 opensApr 30, 2024
IPO ClosesMay 3, 2024
IPO Size (Rs.)₹15.00 Cr
BreakupFresh issue 2,500,000 shares
Face Value:₹ 10
IPO Price in Rs :₹60 per share
Minimum Lot2000 Shares
Listing AtBSE SME
NII Quota~50%
Retail Quota~50%
 Lead ManagerSwastika Investmart Ltd
Registrar Bigshare 
Market makerSunflower 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 In 2023, due to outdated machinery, the manufacturing plant ceased operations.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 LacsDec, 31st, 202331st March, 2023
Revenue from operations3,333.86626.76
Profit After Tax179.523.83
Share Capital411.771
Net worth664.4735.32
EPS Diluted5.2938.28
NAV16.14353.18
Total   Borrowings743.16610.23
Post issue Share Capital661.7 
FV10.0 
IPO price60.0 
EPS Fy230.1 
PE Fy231,036.6 
EPS Fy24 (annualized)3.6 
PE Fy24  (annualized)16.6 
Market cap in Lacs3,970 
Market cap / Sales4.75 

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.ParticularsAmount (in) Lakhs% of Gross Issue Proceeds% of Net Issue Proceeds*
1.To Meet Incremental Working Capital Requirements.600.0040.0042.86
2.To Invest in Subsidiary Company.400.0026.6728.57
3.To Purchase of Machineries.200.0013.3314.28
4.General Corporate Purpose.200.0013.3314.28
Total1,400.0093.33100.00

Revenue Break-up:

   Dec, 31st, 2023
  
S. No.Products%Amount
1S.S. Scraps64.62,153.97
2S.S. Sheets5.9196.62
3S.S. Patta Patti & Pipe5.64184.97
4Molly & Nickel metal scrap1.7558.42
5S.S. Utensils8.44281.73
6Nickel Alloy scrap4.04134.85
7S. S. Round2.2173.78
8MS Channel Angle1.4749.49
9MS Round0.5618.86
10Steel Coils0.5418.3
11S.S. Angle0.4515.46
12Beam0.269.11
13MS Pipe0.4214.32
14MS Scrap3.61120.35
15Copper Wound transformer0.113.6
 Total1003,333.86
  • 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.

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