Shares of Vraj Iron and Steel made robust listing at the bourses on Wednesday.
Against the IPO price of ₹207, the stock Vraj Iron listed on both BSE and the NSE at ₹240, a jump of 15.94 per cent. The stock closed with a premium of 21.70 per cent at ₹251.95 and at ₹252 on the NSE..
The IPO witnessed a strong response from all category of investors, as the issue was subscribed 119.04 times.
The entire offer was a fresh issue worth ₹171 crore.
Funding expansion
The company will use the IPO proceeds for expansion projects at its the Bilaspur facility and for general corporate purposes.
As part of the IPO, Vraj Iron and Steel had raised ₹51.30 crore from anchor investors by allotting 24,78,259 shares at ₹207 each. The six anchor inestors were Volrado Venture Partners Fund IV, Capri Global Housing Finance, Ashika Global Securities, Rajasthan Global Securities, Leading Light Fund VCC - The Triumph Fund and Astorne Capital VCC-Arven.
According to Shivani Nyati, Head of Wealth, Swastika Investmart Ltd, though the stock listed with noticeable gains, investors should acknowledge certain risks, such as the concentration of manufacturing facilities in a single region and the lack of long-term customer contracts. “The steel industry’s inherent competitiveness is another factor to consider,” she said.
The Raipur-based Vraj Iron and Steel manufactures sponge iron, MS (Mid Steel) billets, and TMT (Thermo Mechanical Treatment) bars. It operates through two manufacturing plants at Raipur and Bilaspur in Chhattisgarh.
After implementation of the expansion project, the company expects to increase its aggregate installed capacity from 2,31,600 tonnes per annum (TPA) to 5,00,100 TPA, and its captive power plants’ aggregate installed capacity to 20 MW from 5 MW, the RHP said.