Shyam Metalics IPO opens today: Here’s everything you need to know

Shyam Metalics IPO: The Rs 909 crore initial public offering (IPO) of Kolkata-based long steel products and ferro alloy focused company Shyam Metalics and Energy will be available for subscription from June 14-16, 2021. It has a price band of Rs 303-306 per share.

Shyam Metalics IPO: The Rs 909 crore initial public offering (IPO) of Shyam Metalics and Energy opened for subscription earlier in the day and will be available for subscription till Wednesday, June 16, 2021. The IPO has a price band of Rs 303-306 per share.

The offer by the Kolkata-based long steel products and ferroalloy-focused company comprises fresh issuance of equity shares worth up to Rs 657 crore and an offer for sale (OFS) to the tune of Rs 252 crore by existing shareholders.

Before heading into the IPO, Shyam Metalics raised nearly Rs 270 crore (Rs 2,69,94,59,784.00) from 22 anchor investors in lieu of 88,21,764 equity shares at Rs 306 each, data from the stock exchanges showed.

The anchor investors include the likes of Kotak Small Cap Fund, Kotak Funds – India Midcap Fund, L&T Mutual Fund Trustee Limited – L&T Emerging Businesses Fund, Aditya Birla Sun Life Insurance Company, SBI General Insurance Company among others.

The net proceeds from the fresh issue are intended for repayment or prepayment of Rs 470 crore of its the company’s debt and that of its subsidiary, Shyam SEL and Power, and for other general corporate purposes.

Shyam Metalics sells intermediate and final products across the steel value chain catering to institutional and end-use customers. It operates three manufacturing plants that are located at Sambalpur in Odisha, and Jamuria and Mangalpur in West Bengal.

Investors who wish to subscribe to Shyam Metalics IPO can bid in the lot of 45 equity shares and multiples thereof. At the upper price band, they will have to shell out Rs 13,770 to get a single lot of Shyam Metalics and Energy.

ICICI Securities, Axis Capital, IIFL Securities, JM Financial and SBI Capital Markets are the book running lead managers to the IPO while Kfin Technologies is the registrar of the issue.

The research teams at Reliance Securities and Geojit Financial Services in their respective IPO notes have recommended “Subscribe” to the offer.

Geojit Research in its IPO note said, “SMEL is the least leveraged among its peers, the D/E is at 0.3x in 9MFY21. While the debt to EBITDA is at 1.3x in 9MFY21 compared to 2.5x in 9MFY20. The proceeds from the offer will be used to pay their debt obligations which will further de-leverage their balance sheet and increase their profitability. At the upper price band of Rs 306, SMEL is available at EV/EBITDA of 9.1x (FY21 annualized) which appears fully priced. We assign a Subscribe rating, with a short to medium term perspective due to optimistic international prices and rise in domestic demand.”

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