Subscription status for the Vraj Iron and Steel IPO: The IPO for Vraj Iron and Steel Ltd. got off to a terrific start on the first day of bidding, with a total subscription. Apart from other essential factors, the Sensex, Bank Nifty, and Nifty 50 all reached record highs, which seems to have helped the Vraj Iron and Steel IPO because non-institutional investors promptly snapped up the retail portion. The IPO subscription status for Vraj Iron and Steel is 3.47 times, based on data from the BSE.
3.53 subscriptions were made in the non-institutional investor category, compared to 5.07 subscriptions in the retail individual investor category. Qualified institutional buyers (QIBs) made up 61% of the total.
Tuesday, just one day before the public subscription period for its initial share sale began, Vraj Iron & Steel announced that it had raised just over ₹51 crore from anchor investors.
35% of Vraj Iron and Steel’s shares are reserved for retail investors, 50% are for qualified institutional buyers (QIB), and 15% are for non-institutional institutional investors (NII) in the company’s first public offering.
The company makes TMT bars, M.S. Billets, and sponge iron under the Vraj name. In two industrial facilities in Chhattisgarh, Raipur & Bilaspur, the company currently occupies 52.93 acres. There is also a captive power plant with an installed capacity of 5 MW at the company’s Raipur production facility as of December 31, 2023.
It is anticipated that the Vraj Iron and Steel IPO basis for share distribution would be finalized on Monday, July 1. The company will start issuing reimbursements on Tuesday, July 2. The shares will be credited to the designated recipients’ demat accounts the day following the refund. On Wednesday, July 3, the share price of Vraj Iron & Steel is probably going to be posted on the BSE & NSE.
Review of Vraj Iron and Steel’s IPO
Master Capital Service Ltd
According to the brokerage, the company is increasing the capacity of its captive power plant from 5 MW to 20 MW and its production capacity from 2,31,000 TPA to 5,00,100 TPA. The expansions of the captive power plant and sponge iron are expected to be finished by FY25, however the MS billet expansion is expected to be finished by early FY26. We recommend subscribing to this IPO over the long run.
Dilip Davda is a Chittorgarh.com contributing editor.
The company produces and sells M S Billets, TM Bars, and sponge iron. It uses its internal power plants to test efficient cost control. It has produced impressive results thus far, and the company is confident that after growing, it will maintain the current trends. Based on the issue’s annualized profits for FY24, the pricing seems reasonable. A contributing editor at Chittorgarh.com says investors might be interested in it for the medium to long term.
GEPL Capital
According to brokerage, the company has had strong financial success over the previous three years, with sales, EBITDA, and PAT growing at CAGRs of 21%, 41%, and 69%, respectively. The steel industry will grow as a result of urbanization, infrastructural development, and increased demand from sectors like the automotive industry. The demand for steel is predicted to keep rising globally.
Despite being lower than the global average, India’s per capita steel consumption is predicted to increase significantly by 2031 as a result of government measures and a 9–11% annual growth in local demand through 2026. The expansion plans for the Bilaspur facility are made to make use of the existing infrastructure in order to boost operational control and profitability along the whole value chain. As such, we suggest rating the issue as “Subscribe”.
Details of the Vraj Iron IPO
According to the Red Herring Prospectus (RHP), the ₹171 crore Vraj Iron and Steel IPO is a fully new issue of 8,260,870 equity shares; it does not include an offer for sale (OFS) component.
The company intends to expand at the Bilaspur location and use the IPO revenues for general corporate operations.
Today’s IPO GMP for Vraj Iron & Steel
The current Vraj Iron IPO grey market premium, or GMP, is +85. According to investorgain.com, this shows that the share price of Vraj Iron and Steel was selling at a premium of ₹85 on the grey market.
The expected listing price of Vraj Iron and Steel shares was indicated at ₹292 apiece, which is 41.06% more than the IPO price of ₹207, taking into account the upper end of the IPO pricing band and the present premium on the grey market.
Based on the activity of the grey market over the last nine sessions, the IPO GMP signals higher and predicts a strong listing. The lowest GMP is estimated by analyst at investorgain.com to be ₹20, while the maximum GMP is ₹85.
Investor willingness to pay over the issue price is indicated by the “grey market premium.”
Also Read | Vraj Iron and Steel IPO:Â GMP, price, review, subscription status, and further information. Purchase or not?
(Disclaimer: The opinions and suggestions mentioned are from individual analysts, experts, and broking firms, not endorsed by Businessuncover. Investors should consult certified experts before deciding on investments.)
