SAL Steel IPO

#1
Does anyone know of this company and its fundamentals?
Can you please update me on the prospects of this company and is it a good buy or not?

-Amitabh!
 
#2
SAL Steel IPO

SAL Steel Ltd, a Shah Alloys group company, is setting up a backward integration project in Kutch, Gujarat, for manufacturing sponge iron and ferro-alloys at a cost of around Rs 203.21 crore, to be partly financed by a public issue that would hit the market on November 1.

The project would also include setting up of rolling mills and a 40 MW captive power plant at Bharapar in Kutch district, company Chairman and Managing Director Mr Rajendra V Shah said here today.

Mr Shah, speaking in connection with the company's forthcoming public issue, said the project was being funded through promoters contribution of Rs 51 crore, rupee term loans of more than Rs 114 crore from banks and financial institutions and the balance from the proceeds of the issue.

The company's public issue of 4.2 crore equity shares of Rs 10 each with a price band of Rs 12-14 opens for bids on November 1, 2004, and closes on November 5. The issue would be made through the book building process.

Of the 4.2 crore shares, the company has reserved 10 per cent shares for allotment to shareholders of Shah Alloys Ltd. Of the balance net offer to the public, 50 per cent would be allotted on discretionary basis to qualified institutional buyers, 25 per cent to non-institutional investors and balance 25 per cent to retail investors.

Of the balance 37.8mn shares, 50% would be allotted on a discretionary basis to Qualified Institutional Investors (QIBs), 25% to non-institutional investors and the remaining 25% to the retail investors. The retail portion would be allotted on a proportionate basis.

The public offer constitutes 44.48% of the post issue paid up equity share capital of the company.

The issue is being managed by the book-running lead managers, SBI Capital Markets Ltd., IL&FS Investment and Karvy Computer Share Pvt. Ltd. are the registrars to the issue.

Post issue, the ownership of SAL and the Shah family would come down to 34.33% and 14.95% respectively from the pre-issue levels of 67.87% and 29.57%, according to Rajendra Shah, Chairman, S.A.L. Steel.

The Shah Group is setting up this backward integration project at village Bharapar in the Kutch district of Gujarat for the manufacture of sponge iron, ferro alloys and rolled products.

The project would also house a 40 MW captive power plant. The entire cost of the project is estimated at Rs2.03bn. It is being funded through promoters contributions (Rs510mn), term loans (Rs1.14bn), and the balance from the IPO proceeds.

Phase-I would be completed by the end of December, while Phase-II would be over by the end of March next year, Shah said.

For iron ore, the company has tied up with a company in Goa, and another one in Hospet in Karnataka, while non-coking coal would be imported, Shah said. Lignite would be supplied by Gujarat Mineral Development Corporation (GMDC), he added.

The company would get excise exemption for 5 years, and sales tax benefits for 10 years. The current normal rates of excise and sales tax are around 12% and 4%, respectively, Shah said.

Around 85-90% of the company's sponge iron output of 1.8 lakh tons would be sold to SAL, while the balance would be kept aside for captive consumption of the rolling mills, Shah said.

The entire ferro alloy production (62,000 tons) would be sold to SAL, while rolled products would be either sold in the domestic market or would be exported, Shah said.

S.A.L. Steel would also save around Rs100mn per annum on electricity consumption, Vijay Soni, Financial Advisor, S.A.L. Steel, told reporters on the sidelines of a news conference.
 
#4
TATrader said:
SAL Steel IPO

SAL Steel Ltd, a Shah Alloys group company, is setting up a backward integration project in Kutch, Gujarat, for manufacturing sponge iron and ferro-alloys at a cost of around Rs 203.21 crore, to be partly financed by a public issue that would hit the market on November 1.

The project would also include setting up of rolling mills and a 40 MW captive power plant at Bharapar in Kutch district, company Chairman and Managing Director Mr Rajendra V Shah said here today.

Mr Shah, speaking in connection with the company's forthcoming public issue, said the project was being funded through promoters contribution of Rs 51 crore, rupee term loans of more than Rs 114 crore from banks and financial institutions and the balance from the proceeds of the issue.

The company's public issue of 4.2 crore equity shares of Rs 10 each with a price band of Rs 12-14 opens for bids on November 1, 2004, and closes on November 5. The issue would be made through the book building process.

Of the 4.2 crore shares, the company has reserved 10 per cent shares for allotment to shareholders of Shah Alloys Ltd. Of the balance net offer to the public, 50 per cent would be allotted on discretionary basis to qualified institutional buyers, 25 per cent to non-institutional investors and balance 25 per cent to retail investors.

Of the balance 37.8mn shares, 50% would be allotted on a discretionary basis to Qualified Institutional Investors (QIBs), 25% to non-institutional investors and the remaining 25% to the retail investors. The retail portion would be allotted on a proportionate basis.

The public offer constitutes 44.48% of the post issue paid up equity share capital of the company.

The issue is being managed by the book-running lead managers, SBI Capital Markets Ltd., IL&FS Investment and Karvy Computer Share Pvt. Ltd. are the registrars to the issue.

Post issue, the ownership of SAL and the Shah family would come down to 34.33% and 14.95% respectively from the pre-issue levels of 67.87% and 29.57%, according to Rajendra Shah, Chairman, S.A.L. Steel.

The Shah Group is setting up this backward integration project at village Bharapar in the Kutch district of Gujarat for the manufacture of sponge iron, ferro alloys and rolled products.

The project would also house a 40 MW captive power plant. The entire cost of the project is estimated at Rs2.03bn. It is being funded through promoters contributions (Rs510mn), term loans (Rs1.14bn), and the balance from the IPO proceeds.

Phase-I would be completed by the end of December, while Phase-II would be over by the end of March next year, Shah said.

For iron ore, the company has tied up with a company in Goa, and another one in Hospet in Karnataka, while non-coking coal would be imported, Shah said. Lignite would be supplied by Gujarat Mineral Development Corporation (GMDC), he added.

The company would get excise exemption for 5 years, and sales tax benefits for 10 years. The current normal rates of excise and sales tax are around 12% and 4%, respectively, Shah said.

Around 85-90% of the company's sponge iron output of 1.8 lakh tons would be sold to SAL, while the balance would be kept aside for captive consumption of the rolling mills, Shah said.

The entire ferro alloy production (62,000 tons) would be sold to SAL, while rolled products would be either sold in the domestic market or would be exported, Shah said.

S.A.L. Steel would also save around Rs100mn per annum on electricity consumption, Vijay Soni, Financial Advisor, S.A.L. Steel, told reporters on the sidelines of a news conference.
Hi
Thanx for this piece of info, this IPO looks promising, but at the same time, it might run like the SAH petro.Does anybody have any premonitions on whether it would run well?I guess not.Moreover we haven't got any news of it getting fully subscribed at least?whatdya say guyz?
 

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