One of the leading brand engaged with the production of Thermo mechanically treated rebar or TMT Rebar is Shyam Steels. They have an excellent market for steel products with integrated steel plants and a remarkable brand identity that recalls its utility for the end customers. Other than TMT Rebar, the company is also engaged in the backward connection including sponge and billet while promoting the market for premium TMT bars. Concerning their institutional segment, the company would sell high-grade TMT Rebar for government projects including public sector undertakings, railways, National Highway Authority of India, Nuclear Power Corporation of India along numerous state governments.
The company has been delivering robust and constant growth in its financial aspects while maintaining lower leverage since the 2016 financial year. The company is certainly a veteran with its presence in the market since 1953. Their specific product line varies with TMT steel and bars. In the past six decades, they have achieved the title of 25 billion groups. The manufacturing plant of the company is located in West Bengal. Their products are certainly strong with the capacity to bear earthquake and repel corrosion. Their industry servings vary with rail, bridges, roads, airports, defence, ports and energy sectors. The company reported a revenue of INR 3, 933.08 crores in the nine months of 2020. The net income for the same period was INR 456.32 crores.
Strength
Shyam Steels explores its strength in various business strategies including,
- Expansion of their retail clientele with focused efforts.
- They also strategise their expansion concerning their institutional clientele with quality TMT Rebar supplied to extensive government entities.
- They emphasize backward integration with the adoption of organic and certain inorganic growth.
- Management of financial capabilities while maintaining low leverage to enhance financial performance.
- Constant efforts to enhance the manufacturing capabilities of the unit.
IPO Details
Shyam Steels has filed a Red Draft Herring Prospectus with SEBI or Securities Exchange Board of India in order to raise around INR 500 crores with their Initial Public Offerings. This offer will consist of a fresh issue of shares valued at INR 200 crores combined with an offer for sale with 66.70 lakh shares. The offer-for-sale has been distributed with 11.60 lakh shares through promoters selling shares to shareholders and other 55.09 lakh shares to be sold to other shareholders.
Concerning the use of the proceeds acquired from the IPO, the company intends to repay the debts of Shyam Steel Manufacturing and its subsidiary. The debt has been imposed on the company itself along with its subsidiary called SSPL. The lead managers to the issue of this IPO are Edelweiss Financial Services, Axis Capital, and SBI Capital. The total value of the IPO or the size of the IPO would be approximately INR 500 crores. Other than replaying the debt, the company aims to use the proceeds for other general purposes as well. The date for the IPO is yet to be declared, however is expected to take place in 2021 only.