Vraj Iron and Steel Limited Lists at 16% Premium at Rs 240 per share on BSE!

Vraj Iron and Steel Limited specializes in the production of Sponge Iron, M.S. Billets, and TMT bars marketed under the Vraj brand, debuted on the Indian stock market today.

The stock of Vraj Iron and Steel Limited settled at Rs 240 per share on the BSE, representing an impressive 15.94% premium over the final issue price of Rs 207 per share. Additionally, on the NSE, the company’s shares opened at Rs 240 per share, indicating a gain of 15.94%. The market capitalization on the BSE stands at around Rs 791.58 crore.

IPO Proceeds 

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.
• General Corporate Purposes.

Business Overview

Incorporated in June 2004, Vraj Iron and Steel Limited specializes in the production of Sponge Iron, M.S. Billets, and TMT bars marketed under the Vraj brand. The company operates manufacturing facilities spanning 52.93 acres in Raipur and Bilaspur, Chhattisgarh. As of March 31, 2023, these facilities had a combined installed capacity of 231,600 tons annually, encompassing both intermediate and final products.

Currently, Vraj Iron and Steel Limited produces 57,600 tons per annum of MS Billets, which are utilized in its rolling mills to manufacture TMT Bars with an annual capacity of 54,000 tons. The company’s product lineup includes Sponge Irons, TMT Bars, MS Billets, and by-products such as Dolochar, Pellets, and Pig Iron, catering to a diverse clientele ranging from industrial customers to end-users.

Subscription details

As of June 28, 2024, the IPO was subscribed 126.36 times. The public issue saw a subscription rate of 58.31 times in the retail category, 173.99 times in the QIB category, and 221.66 times in the NII category.

The IPO price band was Rs 195 and Rs 207, with a face value of Rs 10 per share and a lot size of 72 shares. The total size of the company’s IPO was Rs 171 crore, and the final share issue price was fixed at Rs 207 each.

Conclusion 

The crucial question that arises in everyone’s mind is whether to hold onto the shares or book profits. Investors who applied for listing gains only have already earned 16% on the listing day itself and can choose to book the profit generated or watch for at least the first 15 minutes and then set a stop-loss at the day’s low price. On the other hand, investors with a higher risk appetite may opt to hold the shares for the medium to long term, which could prove to be beneficial.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.