Kalana Ispat IPO: Price Band of ₹66 Per Share; Opens on 19 Sept

Incorporated in October 2012, Kalana Ispat Limited primarily manufactures M.S. Billets and Alloy Steel Billets of various grades. The company's business can be divided into two segments: Sale of Products and Sale of Services. Their manufacturing facility has been certified by international quality management systems standards such as ISO 2830:2012 and has an annual capacity of 38000MT/Annum. As of September 2024, the company has three key management personnel (KMPs) and fifteen employees on its payroll, with additional temporary manpower arranged as per production requirements.

The Objectives of the Issue

Kalana Ispat Limited intends to utilise the Net Proceeds from the Issue towards the following objectives:

1. Capital Expenditure for Installation of 4 MW DC & 3.5 MW AC Ground Mounted Solar Power Plant - TPSAT Structure
2. Capital expenditure for setting up the rolling mill at Survey No. 4/1 Taluka Sanand, Mouje Kala village, Ahmedabad, includes the construction of the industrial shed, purchase of equipment/machinery, other assets, etc.
3. General Corporate Purpose

Highlights of Kalana Ispat IPO

Kalana Ispat IPO is set to launch with a fixed price issue of ₹32.59 crores. The issue is entirely fresh. Here are the key details of the IPO:

• The IPO opens for subscription on 19th September 2024 and closes on 23rd September 2024.
• The allotment is expected to be finalised on 24th September 2024.
• Refunds will be initiated on 25th September 2024.
• Credit of shares to Demat accounts is also expected on 25th September 2024.
• The company will tentatively list on NSE SME on 26th September 2024.
• The issue price is fixed at ₹66 per share.
• The fresh issue comprises 49.38 lakh shares, aggregating to ₹32.59 crores.
• The minimum lot size for the application is 2000 shares.
• Retail investors need to invest a minimum of ₹132,000.
• The minimum investment for HNI is 2 lots (4,000 shares), amounting to ₹264,000.
• Jawa Capital Services Private Limited is the book running lead manager for the IPO.
• Skyline Financial Services Private Ltd serves as the registrar.
• Aftertrade Broking is the market maker for the IPO.

Kalana Ispat IPO - Key Dates

The cut-off time for UPI mandate confirmation is 5:00 PM on 23rd September 2024. This deadline is crucial for investors to ensure their applications are processed successfully. Investors should complete their applications well before this deadline to avoid any last-minute technical issues or delays.

Kalana Ispat IPO Issue Details/Capital History

The Kalana Ispat IPO is scheduled from 19th September to 23rd September 2024, with a fixed price of ₹66 per share and a face value of ₹10. The total issue size is 49,38,000 shares, raising up to ₹32.59 crores through a fresh issue. The IPO will be listed on NSE SME. The pre-issue shareholding is 81,01,185 shares.

Kalana Ispat IPO Allocation & Minimum Investment Lot Size

The IPO shares are allocated across different investor categories as follows:

Investors can place bids for a minimum of 2000 shares, with additional bids required in multiples of this figure. The table below illustrates the minimum and maximum investment amounts for retail investors and HNIs, expressed in shares and monetary values.

SWOT Analysis: Kalana Ispat Ltd

Strengths:

• Innovation-focused business model
• Consistent track record of profitable growth due to a scalable business model
• Established and proven track record
• Experienced Promoters and dedicated employees
• Enhancing Promoters Experience
• Cordial relations with their customers

Weaknesses:

• Limited product range focused on M.S. Billets and Alloy Steel Billets
• Small employee base, potentially limiting rapid expansion capabilities

Opportunities:

• Expansion into new product lines or related steel products
• Potential for increased market share in the steel industry
• Growing demand for steel products in various sectors

Threats:

• Fluctuations in raw material prices
• Intense competition in the steel industry
• Economic slowdowns affecting demand for steel products

Financial Highlights: Kalana Ispat Ltd

Below are the standalone financial results for the Fiscal years FY24, FY23, and FY22:

Kalana Ispat Limited has shown mixed financial performance in recent years. The company's revenue decreased by 11% between the financial year ending 31st March 2024 and 31st March 2023. However, profit after tax (PAT) rose significantly by 373% in the same period.

Assets have shown steady growth, increasing from ₹1,264.89 lakhs in FY22 to ₹1,885.71 lakhs in FY24, representing a growth of about 49% over two years.

Revenue has fluctuated, rising from ₹5,793.32 lakhs in FY22 to ₹8,335.87 lakhs in FY23, but then decreasing to ₹7,394.46 lakhs in FY24. Despite the recent decrease, this still represents a growth of about 27.6% over two years.
The company's profitability has improved significantly. Profit After Tax increased from ₹13.66 lakhs in FY22 to ₹236.7 lakhs in FY24, representing a substantial growth of 1,632% over two years.

Net Worth has shown strong growth, increasing from ₹391.65 lakhs in FY22 to ₹1,081.58 lakhs in FY24, a growth of about 176% over two years.

Total Borrowings have fluctuated, increasing from ₹260.57 lakhs in FY22 to ₹861.79 lakhs in FY23, but then decreasing to ₹461.38 lakhs in FY24. This recent decrease in borrowings, coupled with increased profitability, suggests improving financial health.

The company's financial performance shows a trend of asset growth and significantly improving profitability, despite a recent decrease in revenue. The substantial increase in Net Worth and decrease in borrowings in FY24 indicate strengthening financial position. Investors should consider these trends and the company's growth strategy when evaluating the IPO.