Earthstahl Alloys SME
Listing performance
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 27 Jan 2023 – 31 Jan 2023
- Listing date
- 08 Feb 2023
- Face value
- ₹10 per share
- Issue price
- ₹40 per share
- Lot size
- 3,000 shares
- Total issue size
- ₹12.96 Cr
- Market cap at offer price
- ₹48.96 Cr
- Promoter holding
- 100.00% → 73.53% pre-issue → post-issue
- ISIN
- INE0O4V01010
- Registrar
- Bigshare Services Pvt.Ltd.
- Lead managers
- Hem Securities Ltd.
- Registered office
- Merlin Jayshree Vihar, Mohani 5 B, Pandri Tarai, Mandi Gate, Chhattisgarh
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Market maker | 1,68,000 | — | — |
Application size
Minimum 3,000 shares per lot, in multiples, at ₹40
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 3,000 | ₹1,20,000 |
| S-HNI (min) | 2 | 6,000 | ₹2,40,000 |
| S-HNI (max) | 8 | 24,000 | ₹9,60,000 |
| B-HNI (min) | 9 | 27,000 | ₹10,80,000 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Valuation and performance
Valuation at offer price
| Metric | Pre-issue | Post-issue |
|---|---|---|
| EPS (₹) | 8.28 | — |
| P/E (×) | 4.83 | — |
| Market cap | — | ₹48.96 Cr |
Key performance indicators
- Return on net worth
- 70.53%
- ROCE
- 37.41%
- Debt / equity
- 0.93
- PAT margin
- 15.19%
- EBITDA margin
- 27.43%
- NAV per share
- ₹11.74
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About Earthstahl Alloys SME
Earthstahl & Alloys Limited is engaged in the business of manufacturing Cast Iron Lumps and Ductile Iron Pipe Fittings. Cast Iron Lumps are used as raw material in steel foundries to manufacture products like cast iron pipe fittings, machine components such as lathe machines, fan components, manhole covers, decorative cast iron pieces, and other steel or cast iron products. Ductile Iron Pipe Fittings are used in public water supply systems as connectors of pipes. The company operates a manufacturing facility in Duldula, Baloda Bazar, Chhattisgarh, using submerged electric arc furnaces for production. The company was originally incorporated as a Private Limited Company on December 09, 2009, and was converted into a Public Limited Company on September 21, 2022.
Company Analysis
from RHPEarthstahl & Alloys Limited manufactures Cast Iron Lumps and Ductile Iron Pipe Fittings for use in steel foundries and public water supply systems.
Earthstahl & Alloys Limited is engaged in the business of manufacturing Cast Iron Lumps and Ductile Iron Pipe Fittings. Cast Iron Lumps are used as raw material in steel foundries to manufacture products like cast iron pipe fittings, machine components such as lathe machines, fan components, manhole covers, decorative cast iron pieces, and other steel or cast iron products. Ductile Iron Pipe Fittings are used in public water supply systems as connectors of pipes. The company operates a manufacturing facility in Duldula, Baloda Bazar, Chhattisgarh, using submerged electric arc furnaces for production. The company was originally incorporated as a Private Limited Company on December 09, 2009, and was converted into a Public Limited Company on September 21, 2022.
Objects of the Issue
- Funding capital expenditure towards change in electricity supply voltage from 33 KV to 132 KV at our manufacturing facility at Village Duldula, Baloda Bazar (C.G.) ₹944.45 Lakhs p.21
- To meet Working Capital requirements ₹100.00 Lakhs p.21
- General Corporate Purpose ₹119.13 Lakhs p.21
- To meet Issue Expenses ₹132.42 Lakhs p.21
- Funding capital expenditure towards change in electricity supply voltage from 33 KV to 132 KV at our manufacturing facility at Village Duldula, Baloda Bazar (C.G.) 944.45 p.71
- To meet Working Capital requirements 100.00 p.71
- General Corporate Purpose 119.13 p.71
Issue Structure
- Total Issue
- ₹1296.00 Lakhs
- Fresh Issue
- 32,40,000 Equity Shares of face value of ₹10 each at ₹40 per share aggregating to ₹1296.00 Lakhs
- Offer for Sale
- Not Applicable - Entire issue constitutes fresh issue of equity shares
- Price Band
- ₹38 to ₹40 per equity share (Floor Price ₹38, Cap Price ₹40)
- Lot Size
- 3,000 Equity Shares and in multiples of 3,000 equity shares thereafter
- Face Value
- ₹10 per Equity Share
Business Model
The company manufactures Cast Iron Lumps and Ductile Iron Pipe Fittings and sells them to customers primarily in the steel foundry and water supply sectors. Cast Iron Lumps constituted 85.62%, 80.43%, 77.20%, and 98% of revenue from manufactured goods for the stub period ended September 30, 2022, and fiscal years 2021-22, 2020-21, and 2019-20 respectively. Revenue is generated through short-term purchase orders from customers rather than long-term supply agreements.
Business Segments
SWOT Analysis
- • Strategic location near raw material sources reduces logistics costs(p.94)
- • Environment-friendly manufacturing using waste materials from steel plants(p.94)
- • Quality certifications and BIS compliance for products(p.95)
- • Diversified customer base with long-standing relationships(p.95)
- • Experienced management with relevant industry expertise(p.95)
- • Strategic location near raw material sources reduces logistic costs(p.176)
- • Environment-friendly manufacturing process using electricity instead of coke(p.176)
- • In-house testing laboratory ensures quality control(p.176)
- • BIS certification for ductile iron pipe fittings up to 600mm(p.176)
- • Diversified product capability for multiple industrial sectors(p.176)
- • Improved profitability with strong EBITDA margin(p.177)
- • History of debt default and operational shutdown(p.27)
- • Operating losses in FY 2019-20(p.30)
- • Audit qualification on financial statements for FY 19-20(p.30)
- • Heavy dependence on single lender for working capital(p.31)
- • Significant contingent liabilities(p.33)
- • Unregistered logo and lack of intellectual property protection(p.35)
- • Non-compliance with statutory provisions(p.31)
- • Unsecured loans subject to recall(p.40)
- • High electricity cost as primary manufacturing input(p.93)
- • Plant experienced shutdown from March 2015 to March 2018 due to losses(p.93)
- • Limited geographical market penetration(p.93)
- • Significant reliance on few major customers in cast iron segment(p.102)
- • Ductile Iron Pipe Fittings production capacity utilization below 56%(p.101)
- • High customer concentration risk with top 10 customers representing majority of revenue(p.184)
- • Significant contingent liabilities from pending tax disputes(p.163)
- • Substantial unsecured loans from related parties(p.175)
- • Pending litigation involving promoter Padam Kumar Jain(p.186)
- • Material tax disputes with significant amounts involved(p.187)
- • Capital expenditure for grid voltage upgrade to 132 KV(p.21)
- • Expansion through briquetting plant for backward integration(p.32)
- • Commissioning of new 5.5 MVA furnace for increased cast iron production(p.32)
- • Expansion into international markets with UK and European approvals(p.102)
- • Growing steel sector demand and infrastructure projects in India(p.84)
- • Strong government focus on water supply infrastructure through Jal Jeevan Mission(p.85)
- • Increasing demand for ductile iron pipes replacing older CI pipes(p.90)
- • Backward integration opportunity through briquetting plant installation(p.96)
- • Growing water infrastructure requirements driving demand for ductile iron pipe fittings(p.176)
- • Expansion through commissioning of additional furnace capacity(p.176)
- • Recovery and utilization of waste from integrated steel plants and sponge iron plants(p.176)
- • Diversification into components for pellet plants, cement plants and power plants(p.176)
- • Cyclical downturn in steel industry affecting demand(p.28)
- • High concentration risk with top 10 customers(p.29)
- • Under-utilization of ductile iron pipe fittings capacity(p.28)
- • Electricity cost volatility and dependency on state grid(p.29)
- • Competitive pressure from organized and unorganized players(p.33)
- • Raw material supply concentration and price volatility(p.34)
- • COVID-19 pandemic uncertainty(p.43)
- • Macroeconomic slowdown in India(p.42)
- • Volatile electricity prices as primary cost driver(p.93)
- • Significant competition from established players in ductile iron segment(p.102)
- • Dependence on steel plant waste availability and pricing(p.94)
- • Vulnerability to commodity price fluctuations in steel and scrap(p.102)
- • Insurance coverage gaps for operational risks(p.103)
- • Electricity price volatility impacts production costs significantly(p.176)
- • Steel price volatility affecting profitability(p.176)
- • General economic and business conditions risks(p.177)
- • Changes in consumer demand and preferences(p.177)
- • Regulatory and policy changes affecting taxes(p.177)
- • Raw material price inflation and supply constraints(p.177)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Ravi Thakurdasji Laddha | Promoter | 12.27% | 9.02% |
| Rajesh Somani | Promoter | 13.23% | 9.73% |
| Prawin Somani | Promoter | 13.13% | 9.66% |
| Padam Kumar Jain | Promoter | 4.77% | 3.50% |
| Jaiguru Vintrade Private Limited | Promoter Group | 35.33% | 25.98% |
| Aayush Steelco Private Limited | Promoter Group | 6.17% | 4.53% |
| Somani Processors Private Limited | Promoter Group | 5.67% | 4.17% |
| Jaiguru Vintrade Private Limited | Promoter Group | 35.33% | 25.98% |
| Rajesh Somani | Promoter | 13.23% | 9.73% |
| Prawin Somani | Promoter | 13.13% | 9.66% |
| Ravi Thakurdasji Laddha | Promoter | 12.26% | 9.02% |
| Aayush Steelco Private Limited | Promoter Group | 6.17% | 4.53% |
| Somani Processors Private Limited | Promoter Group | 5.67% | 4.17% |
| Padam Kumar Jain | Promoter | 4.77% | 3.50% |
| Kusum Jain | Promoter Group | 4.00% | 2.94% |
| Shreyance Jain | Promoter Group | 3.33% | 2.45% |
| Ravi Thakurdasji Laddha | Promoter and Non-Executive Director | 11.27% | — |
| Rajesh Somani | Promoter and Whole-Time Director | 13.23% | — |
| Prawin Somani | Promoter and Whole-Time Director | 13.13% | — |
| Padam Kumar Jain | Promoter | — | — |
| Rajesh Somani | Promoter | — | — |
| Prawin Somani | Promoter | — | — |
| Ravi Thakurdasji Laddha | Promoter | — | — |
Leadership
Auto-extracted from the company's RHP using AI, with each fact linked to its source passage (hover any row to see the quote & page). Provided for research only, not investment advice — verify against the official RHP before relying on it.