Aditya Ultra Steel IPO Lists at ₹69.90, Surges 112.7% Over Issue Price

Aditya Ultra Steel, a manufacturer of rolled steel products such as TMT bars, made a stellar debut on the Indian stock market on Monday, 16th September 2024, with its shares listing at a significant premium to the issue price. The company's initial public offering (IPO) generated good demand from investors during its subscription period, setting the stage for an impressive market debut.

Listing Details

• Listing Price: Aditya Ultra Steel shares were listed at ₹69.90 per share on the NSE SME platform, marking a strong start to its journey as a publicly traded company.
• Comparison to Issue Price: The listing price represents a substantial premium over the IPO issue price. Aditya Ultra Steel had set its IPO price band from ₹59 to ₹62 per share, with the final issue price being fixed at the upper end of ₹62.
• Percentage Change: The listing price of ₹69.90 on the NSE SME translates to a premium of 112.7% over the issue price of ₹62.

First-Day Trading Performance

• Opening vs. Latest Price: Following its strong opening at ₹69.90, Aditya Ultra Steel's share price declined to ₹66.40 by 10:40 AM, down 5.01% from its opening price but still significantly above the issue price.
• Market Capitalisation: As of 10:40 AM, the company's market capitalisation stood at ₹164.91 crore.
• Trading Volume: The traded volume was 7.72 lakh shares with a traded value of ₹5.31 crore, indicating significant investor interest on the first day of listing.

Market Sentiment and Analysis

• Market Reaction: The market initially reacted very positively to Aditya Ultra Steel's listing, but the stock saw some profit-booking during early trading.
• Subscription Rate: The IPO was oversubscribed by 10.58 times, with retail investors leading at 23.26 times subscription.

Growth Drivers and Challenges 

Expected drivers of future performance:

• Strong brand presence with "Kamdhenu" TMT bars
• Focus on construction and infrastructure sectors
• Manufacturing capacity of 1,08,000 MT for TMT bars

Potential challenges:

• Volatility in steel prices
• Competition in the steel industry
• Dependence on construction and infrastructure growth

Utilisation of IPO Proceeds 

Aditya Ultra Steel plans to use the funds for:

• Meeting capital expenditure requirements
• Fulfilling working capital needs
• General corporate purposes
• Public issue expenses

Financial Performance 

The company has demonstrated strong financial growth:

• Revenue increased by 11% to ₹58,856.29 lakhs in FY2024 from ₹53,048.91 lakhs in FY2023
• Profit After Tax (PAT) rose by 185% to ₹792.34 lakhs in FY2024 from ₹277.66 lakhs in FY2023

As Aditya Ultra Steel begins its journey as a listed entity, market participants will closely monitor its ability to leverage its position in the steel industry to drive future growth and shareholder value.