Vraj Iron and Steel IPO Day 2 subscription status: Vraj Iron and Steel IPO has seen a strong demand, with the issue being subscribed 8.3 times on Day 2 by 12: 30 PM.
Non-institutional investors (NIIs) have shown major interest, subscribing at 11.73 times, while retail individual investors (RIIs) have subscribed at 11.27 times. Qualified institutional buyers (QIBs), meanwhile, have subscribed at 0.62 times.
Prior to the public subscription period, Vraj Iron and Steel secured over Rs 51 crore from anchor investors.
That apart, the IPO saw complete subscription on its first day of bidding.
The company intends to use the funds for capital expenditure related to the “Expansion Project” at the Bilaspur Plant, including repayment or prepayment of borrowings from HDFC Bank secured for this purpose. Additionally, funds will support general corporate purposes.
Vraj Iron and Steel IPO GMP today
Vraj Iron and Steel IPO grey market premium (GMP) is Rs 75, indicating a listing gain of 36 per cent over the upper end of the price band.
Vraj Iron and Steel IPO details
Vraj Iron and Steel IPO is a book-built issue of Rs 171 crore. The issue is entirely a fresh issue of 0.83 crore shares.
The subscription for the Vraj Iron and Steel IPO opened on June 26, 2024, and will close on June 28, 2024.
The price band for the IPO ranges from Rs 195 to Rs 207 per share.
Retail investors can apply for a minimum lot size of 72 shares, requiring an investment of at least Rs 14,904. Non-institutional investors (NII) have minimum lot size requirements of 14 lots (1,008 shares), amounting to Rs 208,656, while qualified institutional buyers (QIBs) must invest in 68 lots (4,896 shares), totaling Rs 1,013,472.
Vraj Iron and Steel IPO allotment, listing date
The allotment is scheduled to be finalised on Monday, July 1, 2024, with the IPO set to list on both BSE and NSE tentatively on Wednesday, July 3, 2024.
Should you subscribe?
According to analysts Vraj Iron and Steel is poised to benefit from the steel industry’s promising growth fuelled by urbanisation, thriving automobile sector infrastructure development, and government investments.
The company’s prudent balance between growth and financial risk management is demonstrated by the faster growth in profits (CAGR 121 per cent FY21-FY23) and reduction in borrowing during the same time frame.
Moreover, the company reported a return on equity (ROE) of 38.2 per cent and return on capital employed (ROCE) of 44.98 per cent during the year FY23. One of the company’s major efforts is to increase the capacity of the captive power plant from 5 MW to 20 MW and to increase the production capacity to 500,100 TPA (Currently 231,600 TPA)
These expansions aim to optimise operations and streamline costs, boosting future financial performance. Moreover, Vraj’s plan to utilise IPO proceeds to reduce debt is expected to strengthen its balance sheet, and improve net profitability by reducing interest costs in addition to improving operational efficiency.
“These expansions and debt reduction strategies are anticipated to drive profitability further through economies of scale and enhanced cost efficiencies. In light of this, we assign a ‘Subscribe’ rating since the company is attractively valued at a P/E of 12.6x on FY23 Adjusted EPS,” KR Choksey Research said in a note.
Meanwhile, those at Master Capital Service Ltd said the expansions for sponge iron and captive power plant are expected to be ready by FY25 whereas the expansion for MS billets will be ready by early next FY26. The brokerage advises investors to ‘Subscribe’ to this IPO for long-term.
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