Home/IPOs/VRAJ
Start Date26-06-2024
Application Timing10am-5pm
Price Range₹195 - ₹207
Min Qty72
Min. Investment₹14040
Listing DateNA
Close Date28-06-2024
About Vraj Iron and Steel Limited
Vraj Iron and Steel LImited is engaged in manufacturing of Sponge Iron, M.S. Billets, and TMT bars under the brand Vraj. They currently operate through two manufacturing plants located at Raipur and Bilaspur in Chhattisgarh spread across 52.93 acres. The aggregate installed capacity of their manufacturing plants is 2,31,600 tons per annum. The manufacturing plant at Raipur also includes a captive power plant with an aggregate installed capacity of 5 MW.
They cater to a mix of customers that consist of industrial customers and end-users and sell products directly as well as through brokers/dealers.
Why To Invest in Vraj Iron and Steel Limited
Manufacturer of sponge iron, TM Bars, M S Billets with integrated manufacturing plants and captive power plant in Chhattisgarh. The company proposes to utilise the Net Proceeds in the following manner.
- Funding for Capital Expenditure towards the "Expansion Project" at Bilaspur Plant:
- Repayment or prepayment of borrowings from HDFC Bank obtained by the company for the capital expenditure towards the "Expansion Project" at Bilaspur Plant; and
- Capital expenditure towards the "Expansion Project" at Bilaspur Plant.
Financial Table
| Year | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Income (Rs. Cr) | 290.9 | 414.3 | 517.4 |
| Profit After Tax (RS. Cr) | 10.9 | 28.7 | 53.9 |
Strengths And Risks
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Well-established Manufacturing Setup : Company operates 2 integrated steel manufacturing plants, in Bilaspur and Raipur, Chhattisgarh. The
integrated nature of manufacturing plants allows control over all aspects of operations as well as operating margins, and focus on quality and multiple points of sale across the steel value chain. Company has a captive power plant with installed capacity of 5MW which helps us to reduce energy cost.
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Strategically Located Manufacturing Plants: Company's manufacturing plants are strategically located at Bilaspur and Raipur within the mineral rich State of Chhattisgarh and in close proximity to the mineral belt in Eastern India. This allows them easy access to raw materials and end users and helps them overcome significant entry barriers in
comparison with competitors.
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Experienced Promoter & Management: Vijay Anand Jhanwar the Promoter and CMD of the company has been well-established in the industry for more than a decade. He was the General Secretary, President and also the Co-Chairman of Chhattisgarh Sponge Iron Manufacturers Association and also an expert member of Steel Consumer Council of India under the Ministry of Steel, Government of India.
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Consistent track record of growth : Company's focus on operational and functional excellence has contributed to a track record of healthy financial performance with Total Income having grown at a CAGR of 33.4%, EBITDA having grown at a CAGR of 67.2% and Profit After Tax at a CAGR of 121.7% between Fiscal 2021 and Fiscal 2023.
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Expansion Project Implementation: Company intends to increase installed capacities by undertaking certain major expansion plans. This would involve risks, including risks associated with the timely completion of these Expansion Project. Any failure to adequately manage these risks could have a material adverse effect on our business,
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Steel Price Fluctuations: The demand and pricing in the steel industry is volatile and sensitive to the cyclical nature of the industries
it serves. A decrease in steel prices may have a material adverse effect on business.
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Regional Concentration: Company's existing and proposed manufacturing facilities are concentrated in a single region i.e., Chhattisgarh. Inability to operate and grow business in this particular region may have an adverse effect on business.
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Raw Material Supply and Pricing: Inadequate or interrupted supply and price fluctuation of raw materials e.g. iron ore, coal, iron ore pellet, dolomite etc. could adversely affect on business,
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