Vraj Iron and Steel IPO Review

 Vraj Iron and Steel Limited manufactures Sponge Iron, M.S. Billets, and TMT bars under the brand Vraj. Vraj Iron and Steel IPO is a book built issue of Rs 171.00 crores. The issue is entirely a fresh issue of 0.83 crore shares.

IPO opensJune 26, 2024
IPO ClosesJune 28 2024
IPO Size (Rs.) ₹171.00 Cr
IPO Size (shares)8,260,870 shares
BreakupFresh issue
Face Value:₹ 10
IPO Price in Rs :₹195 to ₹207 per share
Minimum Lot72 Shares
Listing AtNSE BSE
QIB ~50 %
NII Quota~15%
Retail Quota~35%
 Lead ManagerAryaman Financial Services
Registrar Bigshare Services Pvt Ltd

About Vraj Iron and Steel Limited :

  • Vraj Iron And Steel Limited (formerly known as Phil Ispat Pvt. Ltd.) is a subsidiary company of Gopal Sponge and Power Private Limited (GSPPL) Raipur having interest in steel, power. Vraj Iron And Steel Limited has currently two manufacturing units at Raipur and Bilaspur in Chhattisgarh..
  • of December 31, 2023, it had a workforce of 531 employees & workers, 

Financials: Vraj Iron and Steel Limited

Particulars/ Rs (in crore)2023(09)2023(12)2022(12)2021(12)
Share Capital24.724.944.944.94
Net Worth as stated187.5140.9287.1457.79
Total Borrowings49.322.9842.5145.78
Revenue from Operations301.32515.67414.04290.71
Revenue Growth (%)24.55%42.43%
EBITDA as stated65.181.3149.6629.1
EBITDA Margin (%)21.61%15.77%11.99%10.01%
Net Profit44.585428.710.99
Net Profit (%)14.79%10.47%6.93%3.78%
Share Capital24.724.944.944.94
Net Worth187.5140.9287.1457.79
Total Borrowings49.322.9842.5145.78
Post issue Share Capital33.0   
IPO price207.0   
EPS Fy2316.4   
PE Fy2312.6   
EPS Fy24 (annualized)18.0   
PE Fy24  (annualized)11.5   
Market cap in Lacs683   
Market cap / Sales1.32   

Anchors: Vraj Iron and Steel Limited

Vraj Iron and Steel Limited: Salient Points

  • The issue is entirely for brownfield expansion. They are in the process of adding fresh capacities to manufacturing plants and captive power plants and diversifying into related segments.
  • Captive power plant will be helping them in reduced power costs.
  • The company’s expansion plans are set to significantly enhance its production capacity from 231,600 tons per annum (TPA) to 500,100 TPA by FY26 and increase in the captive power plant’s capacity from 5 MW to 20 MW.
  • The two manufacturing plants are strategically located at Bilaspur and Raipur in mineral-rich state of Chhattisgarh.
  • Company had obtained loan from the HDFC Bank,
  • The company intends to repay all loans obtained from the Net Proceeds of the Issue, which would result in a substantial debt reduction.
  • The company reported good numbers with Income having grown at a CAGR of 33% between FY21 and FY23, EBITDA having grown at a CAGR of 67% and PAT at a CAGR of 121% in this period.
  • Company’s ROE and ROCE stand at 38.32% and 44.98% respectively in FY23.
  •  Peers: company has shown Sarda Energy, Godawari Power and Shyam Metalics as their listed peers It compares well with them.
  • Vraj Iron and Steel IPO is coming at a PE ratio of 12.6x (Fy23) and 11.5x(fy24 earnings annualized). Company is placed well and is further aided by robust growth prospects of the steel industry,
  • I intend to apply in Vraj Iron and Steel IPO.
  • GMP reported in social media is about Rs. 90 (43%)
  • This post is exploratory and educational purposes only. Please do your own diligence before investing in SME IPOs like this.
  • 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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