Vraj Iron and Steel IPO: Massive Investor Demand and Strong Grey Market Premium – Everything You Need to Know!

Vraj Iron and Steel IPO Details:

Raipur-based Vraj Iron and Steel is offering shares priced between Rs 195-207 each. Investors can apply for a minimum of 72 shares and in multiples thereof. The IPO aims to raise Rs 171 crore through the issuance of 82,60,870 new equity shares.

Strong Investor Response:

The IPO has received significant interest, particularly from high-net-worth individuals (HNIs) and retail investors, although institutional investors also participated actively. By 1:05 PM on Friday, June 28, bids were placed for 28,83,29,040 shares, which is 46.97 times the 61,38,462 shares available.

Subscription Breakdown:

Retail investors: Subscribed 37.01 timesNon-institutional investors: Subscribed 113.26 timesQualified institutional buyers (QIBs): Subscribed 15.66 times

Company Background:

Founded in June 2004, Vraj Iron and Steel produces Sponge Iron, M.S. Billets, and TMT bars under the brand name “Vraj.” Their product range includes Sponge Irons, TMT Bars, MS Billets, and by-products such as Dolochar, Pellets, and Pig Iron. They cater to both industrial customers and end-users.

Grey Market Premium:

The grey market premium for Vraj Iron and Steel has been strong since the bidding started, suggesting a potential listing gain of about 42-45%. Before the bidding began, the premium was around Rs 75.

Manufacturing Facilities:

The company operates two integrated steel manufacturing plants in Bilaspur and Raipur, Chhattisgarh. These plants help maintain operational control and contribute to the company’s margins.

Financial Performance

For the nine months ending December 31, 2023, Vraj Iron and Steel reported a net profit of Rs 44.58 crore on a revenue of Rs 304.81 crore. For the financial year ending March 2023, the company posted a net profit of Rs 54 crore and a revenue of Rs 517.42 crore.

Expansion Plans:

Vraj Iron and Steel is expanding its operations to meet the growing demand for its products. The company expects these expansions to be operational from the first quarter of FY26. However, its reliance on manufacturing facilities in Raipur and Bilaspur makes it vulnerable to regional disruptions.

IPO Allocation:

Qualified institutional bidders (QIBs): 50%Non-institutional investors (NIIs): 15%Retail investors: 35%

Lead Managers:

Aryaman Financial Services is the sole book running lead manager for the IPO, with Bigshare Services acting as the registrar. The shares are expected to be listed on both BSE and NSE on Wednesday, July 3.

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