Primary market investors have responded favorably to the Vraj Iron and Steel initial public offering (IPO), which launched on June 26, 2024, and ends today. This indicates that investors have high regard for the company. With the goal of raising ₹171 crore through the issuing of new shares, the firm that makes sponge iron has established a price range for its initial public offering (IPO) of ₹195 to ₹207 per equity share. There appears to be a favorable attitude toward this mainboard IPO based on the robust subscription status in the primary market. Observers of the stock market claim that shares of the company are currently available on the gray market for ₹90 premium.
Today’s IPO GMP for Vraj Iron & Steel
The grey market premium (GMP) for Vraj Iron and Steel’s initial public offering (IPO) is ₹90, which is ₹4 more than Thursday’s GMP of ₹86. One important measure of the market’s assessment of the IPO’s possible performance is the GMP. They said that the strong subscription status for the Vraj Iron and Steel IPO and the bull trend on Dalal Street could be the contributing factors to the negative perceptions of the IPO held by the gray market. Nonetheless, primary market investors were advised by stock market specialists to stay with the fundamentals because more reliable signs of a public issue’s success or failure exist than grey market premiums.
Status of Vraj Iron and Steel’s IPO subscription
On the third day of bidding, at 12:24 AM, the mainboard IPO had 38.25 subscriptions, the retail part of the book build issue had 33.70 bookings, the NII section had 93.01 fills, and the QIB portion had 5.15 bookings.
Review of Vraj Iron and Steel’s IPO
“Vraj Iron and Steel is a leading manufacturer of Sponge Iron, M.S. Billets, and TMT bars, strategically located for operational efficiency and poised for growth through value-added products and ongoing expansions,” according to GEPL Capital, which gave the IPO a “subscribe” tag. The strategic benefit of the company’s location is encouraging for its future expansion. Over the last three years, the company has shown exceptional financial success, with CAGR growth of 21%, 41%, and 69% for revenue, EBITDA, and PAT. The urbanization trend will propel expansion in the steel industry.
Expansion of the infrastructure and rising demand for products like cars. The demand for steel is anticipated to stay stable globally. Although India’s per capita steel consumption is less than the world average, it is expected to rise sharply by 2031 thanks to government initiatives and a 9–11% yearly growth in domestic demand through 2026. The Bilaspur plant’s expansion plans are designed to take advantage of the current infrastructure in order to increase profitability and operational control throughout the value chain. Therefore, we advise giving the issue a “Subscribe” rating.
“Vraj Iron and Steel currently operate through two manufacturing plants which are located at Raipur and Bilaspur in Chhattisgarh spread across 52.93 acres and has a major presence in Chhattisgarh,” according to Ventura Securities, which has also assigned a “subscribe” tag to this public issue. The total installed capacity of their manufacturing facilities as of December 31, 2023, was 2,31,600 tons annually. A captive power plant with a total installed capacity of 5 MW as of December 31, 2023 is also a part of the Raipur manufacturing plant.
The company is now expanding the capacity of its production facilities and captive power plant. It plans to raise the aggregate installed capacity of these facilities from 2,31,600 tons annually to 5,00,000 tons annually, as well as the aggregate installed capacity of the captive power plant from 5 MW to 20 MW.”
Disclaimer: The stock market news provided by Khabar Lane is intended solely for informative purposes and should not be interpreted as financial advice. It is recommended that readers get advice from a licensed financial advisor prior to making any investing decisions.