The Newmalayalam Steel IPO, a book-built fresh issue valued at ₹41.76 crores, involves the issuance of 46.40 lakh shares. It is scheduled to open for subscription on December 19, 2024, and close on December 23, 2024. The allotment is set to be finalised on December 24, 2024. The shares are expected to make their debut on the NSE SME on December 27, 2024.
The price band for the IPO has been established at ₹85 to ₹90 per share. Retail investors must invest a minimum of ₹1,44,000, corresponding to a lot size of 1,600 shares. High-net-worth individuals (HNIs) are required to purchase a minimum of two lots, totalling 3,200 shares, which equates to an investment of ₹2,88,000.
Khandwala Securities Limited serves as the book running lead manager for the IPO. Kfin Technologies Limited has been appointed as the registrar, and Aftertrade Broking Pvt Ltd acts as the market maker for the issue.
Industry Outlook
- The Indian flexible packaging market surged from $12.92 billion to $49 billion by 2023, reflecting significant growth driven by packaged food demand and convenience.
- With a projected CAGR of 12.6% (2022-2027), flexible packaging thrives on cost-efficiency, catering to rising packaged food consumption across diverse consumer markets.
Newmalayalam Steel IPO Objectives
The company plans to allocate the net proceeds from the issuance to the following purposes:
- IT / Technological Upgradation of existing manufacturing facility
- Expansion of the existing solar facility for power generation
- Funding of expenditure towards civil construction of new factory shed cum storage facility within the existing factory premises situated at Kerala.
- Advertising, Marketing and Brand Building
- Funding incremental working capital requirements of the company
- Issue related expenses
- General Corporate purposes
About Newmalayalam Steel Limited
Newmalayalam Steel Limited, established in 2017, acquired the business of M/s. Demac Steel, including its assets and liabilities, on a going concern basis. Based in Kerala, India, the company specialises in manufacturing galvanised pipes, tubes, and sheets, leveraging an electric resistance welding tube mill with an initial capacity of 3,500 MT. This capacity was expanded to 7,500 MT by 2019 to meet growing demand. Its products, known for enhancing product life and quality by preventing rust, cater primarily to the construction industry in Kerala, addressing the challenges of inclement weather.
The company markets its products under the brand "Demac Steel," which has become well-recognised in local markets through a robust dealer network. NewMalayalam Steel's major clients include Jaihind Steel Private Limited, Aashico Ventures LLP, and George Infra Private Limited. The company's effective business model and strict quality standards have established its brand as a preferred choice in the region.
How To Check the Allotment Status of the Newmalayalam Steel IPO?
Steps to check IPO allotment status on Angel One’s app:
- Log in to the Angel One app.
- Go to the IPO Section and then to IPO Orders.
- Select the individual IPO that you had applied for and check the allotment status.
- Angel One will notify you of your IPO allotment status via push notification and email.
How To Apply for Newmalayalam Steel IPO online?
- Login to Your Angel One Account: Open the Angel One app or website and log in with your credentials.
- Locate the IPO Section: Navigate to the 'IPO' section on the platform.
- Select IPO: Find and select the Newmalayalam Steel IPO from the list of open IPOs.
- Enter the Lot Size: Specify the number of lots you want to bid for.
- Submit Your UPI ID: Enter your UPI ID to link your payment method and submit your application.
- Approve Funds: Once you receive the bid request on your UPI app, approve it by entering your UPI PIN.
Contact Details of Newmalayalam Steel IPO
Registered office: Door No. 2/546/A & 2/546/B Mala,Pallipuram P O, Mala, Thrissur - 680 732, Kerala, India
Phone: +91 703 421 2002
E-mail: info@demacsteel.com
Newmalayalam Steel IPO Reservation
|
Investor Category |
Shares Offered |
|
Anchor Investor Shares Offered |
- |
|
Market Maker Shares Offered |
2,33,600 (5.03%) |
|
QIB Shares Offered |
4,41,600 (9.52%) |
|
NII (HNI) Shares Offered |
19,80,800 (42.69%) |
|
Retail Shares Offered |
19,84,000 (42.76%) |
|
Total Shares Offered |
46,40,000 (100%) |
Newmalayalam Steel IPO Lot Size
|
Application |
Lots |
Shares |
Amount |
|
Retail (Min) |
1 |
1,600 |
₹1,44,000 |
|
Retail (Max) |
1 |
1,600 |
₹1,44,000 |
|
HNI (Min) |
2 |
3,200 |
₹2,88,000 |
Newmalayalam Steel IPO Promoter Holding
The promoters of the company are Vazhappily Davis Varghese, Divyakumar Jain, Ankur Jain, Mahendra Kumar Jain, Molly Varghese, and Cyriac Varghese.
|
Share Holding Pre-Issue |
99.80% |
|
Share Holding Post Issue |
73.02% |
Key Performance Indicators for Newmalayalam Steel IPO
As of March 31, 2024, the market capitalisation of Newmalayalam Steel's IPO is ₹155.59 crore. Here are the KPIs of Newmalayalam Steel:
|
KPI |
Value |
|
ROE (%) |
10.55% |
|
ROCE (%) |
17.60% |
|
Price to Book Value (x) |
2.81 |
|
RoNW (%) |
10.55% |
|
PAT Margin (%) |
1.41% |
Price Metrics
|
Metric |
Pre-IPO |
Post-IPO |
|
P/E (x) |
26.67 |
14.98 |
|
EPS (₹) |
3.38 |
6.01 |
Newmalayalam Steel IPO Prospectus
Newmalayalam Steel IPO Registrar and Lead Managers
Newmalayalam Steel IPO Lead Managers
- Khandwala Securities Limited
Registrar for Newmalayalam Steel IPO
Kfin Technologies Limited
- Contact Number: 04067162222, 04079611000
Website: Newmalayalam Steel IPO Registrar
Financial Performance of Newmalayalam Steel Limited
| Particulars | For period ended September 30, 2024 | Year ending on March 31, 2024 | Year ending on March 31, 2023 |
|---|---|---|---|
| Revenue from Operation (in ₹ lakh) | 15,421.42 | 30,016.06 | 35,479.84 |
| Profit After Tax (PAT) (in ₹ lakh) | 519.30 | 426.86 | 600.49 |
| Total Borrowings (in ₹ lakh) | 3,917.94 | 5,911.15 | 2,815.22 |
| Net Worth (in ₹ lakh) | 4,566.44 | 4,047.14 | 3,620.28 |
| Return on Equity (%) | 11.37% | 10.55% | 16.59% |
| Return on Capital Employed (%) | 17.19% | 17.60% | 21.74% |
| Net Debt to EBITDA Ratio (x) | 4.09 | 5.75 | 2.30 |
| Earning Per Share (EPS)-in absolute ₹ | 4.11 | 3.38 | 4.75 |
Know before investing
Strengths
12Extensive distribution network enhances retail presence across multiple channels.
Unique business model ensures efficient product marketing and sales.
Engaged numerous dealers for widespread product availability and service.
Periodic product and market trend reviews drive strategic sales.
Efficient sales team supports robust dealer network in Kerala.
Intermediaries maintain close customer contact, understanding market needs.
Focused sales and marketing strategies for deeper market penetration.
Positioned products in construction and architectural applications widely.
Diversified product portfolio mitigates market fluctuation risks effectively.
Established brand "Demac Steel" fosters strong market recall.
Continuous product customization meets specific dealer and customer needs.
Achieved significant revenue across product lines in fiscal 2024.
Risks
12The company is heavily dependent on dealers, accounting for 88% of revenue, which significantly impacts operations.
Sourcing and pricing of pre-galvanised coils are crucial, posing potential risks to raw material availability.
28.77% of sales are reliant on Jaihind Steel, increasing risks associated with dependency on promoter group entities.
Operations concentrated in Kerala are vulnerable to regional disruptions, affecting business stability.
The steel industry's cyclical nature means fluctuating prices could negatively impact profitability and financial conditions.
Seasonal demand peaks in Q3 and Q4; lower utilisation in other quarters affects profitability.
Operational risks at manufacturing units, such as shutdowns or inefficiencies, could disrupt production.
Steel manufacturing processes are hazardous, risking accidents, fatalities, and operational interruptions.
Past growth due to dealer expansion and increased production capacity may not be sustainable.
Conflicts of interest with group companies engaged in similar industries could negatively affect business operations.
Historical delays in statutory dues like EPF expose the company to risks of penalties and litigation.
Delays in GST payments have occurred, which could lead to fines and increased regulatory scrutiny.
Newmalayalam Steel Limited Peer Details Comparison
| Company Name | EPS (Basic) (₹) | NAV (per share) (₹) | P/E (x) | RoNW (%) |
|---|---|---|---|---|
| Newmalayalam Steel Limited | 3.38 | 32.00 | 26.67 | 10.55 |
| Apollo Pipes Ltd | 26.40 | 103.93 | 59.10 | 15.70 |
| Hariom Pipe Industries Limited | 20.40 | 149.72 | 32.80 | 12.24 |
