January 21, 2020
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Grey Market News of Shri Bajrang Power & Ispat Limited#
Short Note about Shri Bajrang Power & Ispat Limited:
Shri Bajrang Power and Ispat Limited, the flagship company of Goel group of companies, is an integrated manufacturer of long steel products in India. Its current product portfolio comprises of TMT bars, wire rod, HB wires, sponge iron, pellets, steel billets, ferro alloys, and fly ash bricks. The Goel group is involved in, inter-alia, the manufacturing of steel, generation and sale of hydropower, generation of captive power, and operating a regional television channel. (Detailed note about the company is given in Page bottom box.)
The following are the strengths of the company:
• Integrated manufacturer of long steel products in India.
• Diversified product portfolio and well recognized brands ‘Goel TMT’ and ‘Goel TMT WireX’;
• Efficient operations with focus on product quality and cost optimization.
• Established relationships with channel partners supported by large distribution network.
• Strong presence in central and western region
• Strategically located manufacturing facilities
• Strong track record of robust financial performance.
• Strong management team backed by experienced Promoters.
The promoters of Shri Bajrang Power & Ispat Limited :
Suresh Goel,
Rajendra Goel,
Narendra Goel,
Anand Goel,
Atlanta Securities Private Limited &
Banka Finance & Securities Private Limited.
Main object of the issue of Shri Bajrang Power & Ispat Limited:
The Company proposes to utilize the Net Proceeds from the Issue towards Repayment/pre-payment, in full or part, of certain borrowings availed by the Company
IPO Particulars of Shri Bajrang Power & Ispat Limited:
IPO Opens on: ? 2020
IPO Closes on: ? 2020
Issue Type: Book Built Issue IPO
Issue: Up to [?] Equity Shares (of face value of Rs 10
each), aggregating up to Rs 5,000 million.
Issue Size Rs.500 Crore
Face Value per share: Rs. 10
Price Band: Per Equity Share: Rs. ?
Minimum Order Quantity: ? Shares
Listing will at: BSE, NSE
Shares offered to
Anchors? Shares = INR ? Crs
QIB ? Shares = INR ?Crs
NII ?Shares = INR ?Crs
RII ?Shares = INR ?Crs (Lot size: 20 = ? Forms)
Equity Shares prior to the IPO : 52,284,620 Equity Shares
Tentative timetable:
? – Price Band announced
? – Anchor List
? – Offer Opens
? – Offer Closes
?– Finalisation of Basis of Allotment
?– Unblocking of ASBA
?– Credit to Demat Accounts
?– Listing on NSE & BSE
Financial snapshot of Shri Bajrang Power & Ispat Limited:
On Consolidated basis
Earnings per Share 2017-18 Rs 28.22
Earnings per Share 2018-19 Rs (?)
Earnings per Share 2019-20 (6 M) Rs (?)
Book Value of the Share as on 31.03.2018 Rs 515.58
Return on Net Worth: 17-18 5.47 %
Return on Net Worth: 18-19 (?) %
Return on Net Worth: 19-20(6M) (?) %
Upper Price Band/last EPS: (?)
Upper offer price/Book Value Ratio:
Peer Comparison:
JSW Steel @ PE RAtio of 15.34
Jindal Steel & Power
Limited Standalone 179,082.00 1.00 (3.95) (3.95) NM 234.53
Consolidated 281,161.70 1.00 (15.38) (15.38) NM 312.96
Prakash Industries @ PE RAtio of 6.03
Godawari Power & Ispat @ PE RAtio of 8.95
Sarda Energy & Mineral @ PE RAtio of 7.56
Kamadhenu Ltd @ PE RAtio of 32.09
Tata Sponge Iron @ PE RAtio of 10.56
Lead Managers of Shri Bajrang Power & Ispat Limited IPO:
IDBI Capital Markets & Securities Limited
Equirus Capital Private Limited
SBI Capital Markets Limited
Registrar to the IPO:
Link Intime India Private Limited
Registered Office of Shri Bajrang Power & Ispat Limited:
Village Borjhara,
Guma Road,
Urla Growth Center,
Raipur-493 221,
Chhattisgarh
Parul Verma,
Company Secretary and Compliance Officer
Total Subscription of Shri Bajrang Power & Ispat Limited:
on Day 1(on 00.00.2020 at 17.00 IST)
QIB : shares offered:xx Subscribed
NII : Shares offered: xx Subscribed : xx
RII : Shares offered : XX Subscribed : xx
Total : Shares offered :XX Subscribed : xx
IPO Analysis by Experts / Fund Managers
Shri Bajrang Power and Ispat Limited, the flagship company of Goel group of companies, is an integrated manufacturer of long steel products in India. Its current product portfolio comprises of TMT bars, wire rod, HB wires, sponge iron, pellets, steel billets, ferro alloys, and fly ash bricks. The Goel group is involved in, inter-alia, the manufacturing of steel, generation and sale of hydro-power, generation of captive power, and operating a regional television channel.
The Company is led by an experienced management team, consisting of professionals with experience across various sectors. Each of its individual Promoters, namely Suresh Goel, Rajendra Goel, Narendra Goel, and Anand Goel have more than three decades of hands on experience in the steel industry. The Company believes that its management team’s collective experience and capabilities enable it to understand and anticipate market trends, manage its business operations and growth, leverage customer relationships and respond to changes in customer preferences.
Its TMT Bars and HB wires, are sold under the brands “Goel TMT” and “Goel TMT WireX” respectively which, the Company believes, are well recognized brands in their respective categories. Revenues from sale of TMT Bars and HB Wires has been the pre-dominant revenue stream for the Company and contributes 58.57% of the standalone revenues for Financial Year 2017 – 2018.
The Company caters primarily to the infrastructure and construction industry in India especially across the central and western regions of India which is serviced through 6 distributors with a network of 385 dealers.
The Company is an integrated steel manufacturer, with three strategically located manufacturing facilities in Raipur, which is the capital of the state of Chhattisgarh – a state rich in various minerals, including coal and iron ore which are the primary and critical raw materials that the Company requires for manufacturing its products.
Availability of these raw materials in close proximity to its manufacturing facilities, helps the Company in minimising its operating costs and achieve operational efficiencies.
Its customer base during the Financial Year 2017 – 2018 was spread across 24 states, with primary market presence being in the central and western regions of India. During Financial Year 2017 – 2018, its revenue share from state of Chhattisgarh, Madhya Pradesh and Maharashtra constituted 61.90%, 16.52% and 9.63% respectively of its standalone restated revenues.
The Company endeavors to be innovative in its sector and has relied on process re-design and re-engineering to reduce the time and cost involved in manufacturing of its products. In an effort to enhance its backward integration, increase raw material security, and enhance profits, the Company has applied for, and have been allotted exclusive mining rights, in connection with an iron ore mine located in the Uttar Bastar Kanker district at Chhattisgarh. The Company also have exclusive mining rights in connection with an open-cast manganese ore mine located in Vizianagaram district, in Andhra Pradesh with an area of 3.95 Hactors.