What You Must Know About Aditya Ultra Steel IPO: Price Band ₹59 to ₹62 Per Share

Aditya Ultra Steel Limited, founded in 2011, manufactures rolled steel products, specifically Thermo Mechanically Treated (TMT) bars, under the brand name Kamdhenu. The company serves the construction industry and infrastructure development sector.

Key highlights of Aditya Ultra Steel's operations include:

• Manufacturing facility located in Wankaner, Gujarat
• Production capacity of 108,000 MT for TMT bars
• The manufacturing process involves using billets in a reheating furnace and a rolling mill
• 149 full-time employees, including executives, as of 30th April 2024

The Objectives of the Issue

• Capital Expenditure: To meet capital expenditure requirements.
• Working Capital: To fulfil the company's working capital needs.
• General Corporate Purposes: For various corporate activities aligned with the company's strategic goals.
• Public Issue Expenses: To cover the expenses related to the IPO process.

Highlights of Aditya Ultra Steel IPO

Aditya Ultra Steel IPO is set to launch with a book-built issue of ₹45.88 crores. The issue comprises entirely of a fresh issue of 74 lakh shares. Here are the key details of the IPO:

• The IPO opens for subscription on 9th September 2024 and closes on 11th September 2024.
• The allotment is expected to be finalised on 12th September 2024.
• Refunds will be initiated on 13th September 2024.
• Credit of shares to Demat accounts is also expected on 13th September 2024.
• The company will tentatively list on NSE SME on 16th September 2024.
• The price band is set at ₹59 to ₹62 per share.
• The fresh issue comprises 74 lakh shares, aggregating to ₹45.88 crores.
• The minimum lot size for the application is 2000 shares.
• Retail investors need to invest a minimum of ₹124,000.
• The minimum investment for HNI is 2 lots (4,000 shares), amounting to ₹248,000.
• Swastika Investmart Ltd is the book-running lead manager for the IPO.
• Cameo Corporate Services Limited serves as the registrar.
• Sunflower Broking is the market maker responsible for 3,70,000 shares.

Aditya Ultra Steel IPO - Key Dates

The cut-off time for UPI mandate confirmation is 5:00 PM on 11th September 2024. This deadline is crucial for investors to ensure their applications are processed successfully. Investors must complete their applications well before this deadline to avoid any last-minute technical issues or delays.

Aditya Ultra Steel IPO Issue Details/Capital History

The Aditya Ultra Steel IPO is scheduled from 9th September to 11th September 2024, with a price band of ₹59 to ₹62 per share and a face value of ₹10. The total issue size is 7,400,000 shares, raising up to ₹45.88 crores through a fresh issue. The IPO will be listed on the NSE SME, with the shareholding increasing from 17,435,568 pre-issue to 24,835,568 post-issue. Sunflower Broking is the market maker responsible for 370,000 shares within the issue.

Aditya Ultra Steel 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: Aditya Ultra Steel Ltd
 

Strengths:

• Established presence in the TMT bar manufacturing sector
• Brand recognition through the "Kamdhenu" brand name
• The strategic location of a manufacturing facility in Gujarat
• Focused product portfolio catering to the construction and infrastructure sectors

Weaknesses:

• High dependence on a single product category (TMT bars)
• Geographical concentration of manufacturing facilities
• Potential vulnerability to fluctuations in raw material prices

Opportunities:

• Growing construction and infrastructure development in India
• Potential for geographical expansion and product diversification
• Increasing demand for high-quality steel products in construction

Threats:

• Intense competition in the steel manufacturing sector
• Economic downturns affecting construction and infrastructure projects
• Regulatory changes impacting steel production or pricing
   

Financial Highlights: Aditya Ultra Steel Ltd

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

Aditya Ultra Steel Limited has demonstrated strong financial growth over the past three fiscal years, particularly in terms of assets and revenue. 

The company's assets have grown significantly, increasing from ₹9,156.62 lakhs in FY22 to ₹14,752.33 lakhs in FY24, representing a robust growth of 61.1% over two years. This substantial increase in assets indicates significant investments in the company's operational capabilities and infrastructure.

Revenue has shown consistent growth, rising from ₹51,598.34 lakhs in FY22 to ₹58,856.29 lakhs in FY24, marking a solid increase of 14.1% over two years. The year-over-year growth from FY23 to FY24 was 11%, indicating sustained demand for the company's products.

The company's profitability, however, has shown some fluctuations. Profit after tax increased from ₹488.90 lakhs in FY22 to ₹792.34 lakhs in FY24, representing a growth of 62.1% over two years. However, there was a significant dip in FY23 to ₹277.66 lakhs before recovering strongly in FY24. This volatility in profitability suggests that while the company has been able to grow its revenue, it may face challenges in maintaining consistent profit margins.

Net worth has shown steady growth, increasing from ₹2,588.20 lakhs in FY22 to ₹3,758.21 lakhs in FY24, a growth of 45.2% over two years. This increase reflects the company's ability to generate and retain earnings, strengthening its financial position.

The company's financial leverage has increased over the years. Total borrowings rose from ₹4,695.12 lakhs in FY22 to ₹5,427.07 lakhs in FY24, an increase of 15.6%. While this borrow increase is lower than the growth in assets and revenue, it still represents a significant debt the company needs to manage.

Overall, while Aditya Ultra Steel Limited shows promising growth in revenue and assets, potential investors should closely examine its ability to maintain profitability and manage its debt levels. The upcoming IPO allows the company to strengthen its capital base, which could help address some of these financial challenges.