IPO Alert: Shri Bajrang Power and Ispat files for public offering to raise ₹700 crore

The steel industry has made a notable contribution to the development of the Indian economy. The steel sector contributes around 2% of India’s GDP and employs around 25 lakh people, including allied businesses. Infrastructure development, for which steal is a key component, was one of the focus areas of the union budget this year.

Shri Bajrang Power and Ispat Ltd (SBPIL) recently filed a draft red herring prospectus with the Securities and Exchange Board of India to raise ₹700 crores via an initial public offering. The details of the IPO are yet to be disclosed.

The рrосeeds from the issue will be used tо reраy debt worth ₹400 сrоre оf the соmраny. As оf March 2021, its total debt stood at ₹1268.23 сrоre. The proceeds will also be used for funding incremental working capital requirements of the company and general corporate purposes.

Company Profile

Shri Bajrang Power and Ispat Limited is one of the leading integrated steel companies based out of central India and is one of the top 10 players in the country in terms of production capacity for iron ore pellets, iron ore beneficiation, and sponge iron.

The Chhattisgarh-based company depends on its captive iron mine and manganese ore mines to manufacture intermediate and long steel products, such as TMT bars, ERW pipes, wire rods, HB wires, ferro alloys, steel billets, iron pellets, and sponge iron.

SBPIL intends to set up a 50MW solar power plant at Raipur. The proposed expansion and the solar project will be called Green Field Expansion.

The company has a captive power capacity of 83 MW at its units, including 50 MW from waste heat recovery, which utilizes the waste heat generated during manufacturing into electricity. That minimizes the company’s carbon footprint while simultaneously reducing power and fuel costs.

Key Numbers

For fisсаl yeаr 2021, Shri Bajrang Роwer posted а revenue оf ₹3031.21 сrоre versus ₹2663.71 сrоre а yeаr аgо. Net рrоfit for the рeriоd stооd at ₹298.93 сrоre аgаinst ₹141.05 сrоre last yeаr.

Meanwhile, Shri Bajrang Power has availed certain unsecured loans, which may be recalled by the lenders at any time. As of March 31, 2021, the unsecured loan availed by the company was ₹2,176.08million.

Rapid urbanization and government initiatives such as ‘Make in India’ are expected to boost steel demand going forward. So investing in the steel industry can be a rewarding strategy.