Shyam Metalics IPO : Should you subscribe?

Shyam Metallics IPO: Should you subscribe

Shyam Metalics IPO has opened for subscription on 14th June 2021. Shyam Metalics is  a leading integrated metal producing company based in India with a focus on Long Steel Products and Ferro Alloys. The company is headquartered in Kolkata and was incorporated in 1991.

Details of IPO

Size of IPO : ₹909 crores ; Fresh issue of ₹657 crores and Offer For Sale (OFS) of ₹252 crores

Subscription dates : 14 June 2021 to 16 June 2021

Price Band : ₹303-₹306 per share

Lot Size : 45 shares

Value of 1 lot : ₹13,770 at the upper price range

Maximum lots per person : A retail investor can apply for 14 lots. This would cost ₹192,780.

The proceeds of the IPO will be used for repayment or prepayment of debt up to ₹470 crore and also debts ofits subsidiary, Shyam SEL and Power. The proceeds will also be used for other general corporate purposes.

What do the experts say about Shyam Metalics IPO?

Strong balance sheet along with best-in class leveraging positioning offers an edge to SMEL. Additionally, OCF yield at 8.4 per cent as on 9MFY21 looks to be impressive and expected to improve further with higher cash flow generation in the ensuing quarters,” – Reliance Securities

“Domestic steel demand impacted by Covid-19 will pick up in FY22 and continue its strong growth at 6 per cent through FY25. Restrictions on Chinese exports due to higher domestic demand and surging international steel prices will benefit Indian steel makers like Shyam Metalics.” – Geojit

Financials of Shyam Metalics

Revenues of Shyam Metalics rose 6.5 per cent compounded annually to ₹4,362.89 crore in FY20 over ₹3,842.57 the crore in FY18 (It fell in FY20). Revenues for the first nine months of FY21 rose 19.80 per cent to ₹3,933.08 crore.

EBITDA for FY20 came in at ₹634 crore and for first nine months of FY21 at ₹717.32 crore. Profit almost halved to ₹340 crore in FY20 from ₹637 crore in FY19. It has improved strongly to ₹456 crore in the first nine months of FY21 from ₹260 crores in the comparable year.

Verdict

Considering the growth path of the industry and it’s strong financials, Shyam Metalics has the capacity to build wealth over the next 12-24 months. We advise that one should SUBSCRIBE to the Shyam Metalics IPO.

You can apply for the IPO here.

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