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  • Writer's pictureJatin Agarwal

Earthstahl IPO


Company and IPO Overview


Incorporated in 2009, Earthstahl & Alloys Limited is engaged in the business of manufacturing Cast Iron Lumps and Ductile Iron Pipe Fittings. The cast iron lumps are used as raw material in the steel foundries to manufacture products like cast iron pipe fittings, machine components such as latch machines, fan components, manhole covers, decorative cast iron pieces, cast iron pipe fitting, and other units engaged in manufacturing of steel or cast iron products. Ductile Iron Pipe Fittings is used in public water supply systems as connectors of pipes. The foundry is also capable of producing parts or components of plant and machinery/ automobiles using foam molds.


Plant and manufacturing unit: Its manufacturing unit is located in the village Duldula about 50 KMs from Raipur, Chhattisgarh and is spread across an area of around 4.73 hectares of land. It is using waste generated by integrated steel plants, sponge iron plants and rolling mills in its manufacturing process as raw material and recover iron from the left-out waste, thus conserving the environment. The plant is located near to the source of raw material i.e. Bhilai Steel Plant of SAIL and other pellet and sponge iron plants located in Raipur and surrounding area. Strategic location of its manufacturing facility ensures its access to ferrous waste, steel scrap, pig iron (steel grade), carburizer, Ferro-alloys and other raw materials like coal, coke and dolomite required in manufacturing process forming a substantial part of cost of production at a low logistic cost.


The company’s products are also supplied in the European Union countries. Further, it’s an approved vendor for the supply of ductile iron pipe fittings to Rural Water Supply & Sanitation, Odisha, Maharashtra Jeevan Pradhikaran. Currently, it sells its products primarily in the state of West Bengal, Punjab, Orissa, Gujarat, Madhya Pradesh, and Maharashtra.

EarthStahl Alloys is a BSE SME IPO and it is going to raise ₹12.96 crores via IPO. The EarthStahl Alloys IPO price band is fixed at ₹38 to ₹40 with a market lot of 3000 shares. The company has reserved a quota of 35% for NII, 35% for Retail Investors and 30% for QIB in this IPO.


Financials (rounded off)

Date

Total Revenue (₹ in cr)

​​​PAT (₹ in cr)

​31/03/2020

31.82

-0.33

31/03/2021

24.58

2.67

31/03/2022

49.08

5.8

Objectives of the Issue

· Funding capital expenditure towards change in electricity supply voltage from 33 KV to 132 KV at the manufacturing facility at Village Duldula, Baloda Bazar (C.G.)

· To meet Working Capital requirements for further expansions in the business.

· General Corporate Purpose.

· To meet Public Issue Expenses.


IPO Details

IPO Date

27/01/2023-31/01/2023

Face Value

₹10 per share

IPO Price Band

₹38-40 per share

IPO Lot Size

3000 Shares

Listing at

BSE SME

Basis of Allotment

03/02/2023

Credit of Shares in Demat

07/02/2023

Listing Date

08/02/2023

Pre-Issue Shareholding

100%

Post-Issue Shareholding

73.53%

Retail Minimum Lot Size

3000 shares (₹1,20,000)


Earthstahl Valuations and Margins:

FY20

FY21

FY22

EPS (Rs.)

(0.37)

2.97

8.28

P/E

-

-

-

ROCE (%)

(1.61)

15.81

37.41

EBITDA (%)

8.21

25.54

27.43

Debt/Equity

3.47

1.82

0.93

Crisp Insights:

  • The Company has strategically located its manufacturing plant resulting in cost and time efficiencies.

  • Quality Assurance and environment friendly manufacturing has been given utmost importance by the company.

  • The Company has a diversified Client Base and long standing relationship with their customer’s and the company comes with Experienced Promoters, Board and senior management team.

  • Grey Market Premium is NIL as on 27/01/2023.


Disclaimer: All information is provided for educational and informational purpose only. Data is fetched from publicly available sources such as the DRHP filed by the company. The website or the author takes no guarantee for the accuracy of the data however, we have tried our best to present accurate data to out readers. Please consult a financial advisor or do your own analysis before investing/trading in the stock market.

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