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The company proposes to utilise the net proceeds from the fresh issue towards repayment or prepayment of up to Rs 470 crore of its debt
Initial public offer by Shyam Metalics and Energy will open for subscription on June 14 to raise Rs 909 crore. The company has fixed a price band of Rs 303-306 per equity share. The issue will close on June 16.
The company proposes to utilise the net proceeds from the fresh issue towards repayment or prepayment of up to Rs 470 crore of its debt and that of its subsidiary, Shyam SEL and Power Limited and for other general corporate purposes.
Product portfolio
The group is a producer of intermediate and long steel products which includes iron pellets, sponge iron, steel billets, TMT, structural products, wire rods, and ferroalloys products with a specific focus on high margin products such as customised billets and specialised ferroalloys for special steel applications.
Shyam Metalics and Energy is in the process of further diversifying its product portfolio by entering into the segments, such as pig iron, ductile iron pipes and aluminium foil.
“The group’s key strength lies in its integrated operations across the steel value chain and strategic locations of its manufacturing plants in Odisha and West Bengal which are well connected by railways, roadways and ports in the eastern region of India and are supported by infrastructure in terms of captive railway sidings and captive power plants,” Shyam Metalics and Energy said in a release.
Diversified product mix
The group’s manufacturing plants at Sambalpur and Jamuria are forward and backward integrated, and it is present across the steel value chain, offers a diversified product mix, and has a strategic locational advantage.
In the nine months ended December 31, 2020, power units produced from the group’s captive power plants accounted for 79.58% of their total power units consumed. The company has a wide distribution network partnered through 42 distributors across 13 states and one union territory in India, as of December 31, 2020.
Its customers included Jindal Stainless Limited, Jindal Stainless (Hisar) Limited and Rimjhim Ispat Limited. The company’s international customers are Norecom DMCC, Norecom Limited, POSCO International Corporation, World Metals & Alloys (FZC), Traxys North America LLC, JM Global Resources Limited, Goenka Steels Private Limited and Vijayshri Steel Private Limited.
ICICI Securities Limited, JM Financial Limited, Axis Capital Limited, IIFL Securities Limited and SBI Capital Markets Limited are the book running lead managers to the offer.