Shri Bajrang Power and Ispat plan to raise 700 yen through IPO
Shri Bajrang Power and Ispat plan to raise â¹ 700 crore through the issuance of new shares via an initial public offering scheduled by the end of this month.
The company proposes to use the net proceeds of the issuance to prepay the existing debt of 400 crore and free itself from any debt on a stand-alone basis, in addition to using the funds for additional working capital. On a consolidated basis, the company will have a debt of 180 crore.
Shri Bajrang has already invested 270 crore in internal credit over the past two years to expand its capacity of spongy iron, steel smelting, rolling mill, ferroalloys and captive energy in addition to setting up a galvanizing plant. . All of these projects will go into production by March.
The company’s products
The company currently operates three manufacturing units which are strategically located in Raipur in Chhattisgarh, which has abundant reserves of iron ore, iron ore fines and coal mines.
It manufactures intermediate and long steel products such as TMT bars (thermomechanical treatments), electric resistance welded tubes, wire rods, hb (shiny hard) wires including binding wires, ferroalloys, billets of steel, iron pellets and spongy iron.
It has installed an iron ore enrichment and palletizing capacity of 2 mtpa and 1.4 mtpa respectively, as well as a captive power capacity of 83 MW in its units, including 50 MW of waste heat recovery. The company also has an installed hydropower capacity of 36 MW at Chamba in Himachal Pradesh.
Shri Bajrang holds an exclusive right to mine the manganese ore mine in Vizianagaram, Andhra Pradesh, to extract 13,114 tonnes per year. For coal, the company has secured ties with South Eastern Coalfields, a subsidiary of Coal India, for an annual supply of 6.03 MTPA based on several fuel supply agreements.
The company uses low grade iron ore chunks and fines at its beneficiation plant to take advantage of the price difference between lower and higher grade iron ore fines.
Access to integrated iron ore and manganese mines reduces costs and provides stability.
On the reason for self-reliance debt relief, Srinivasan Manoharan, President (Finance and Accounts), Shri Bajrang said the company is conservative and believes in growing the business with your own money rather than stretch it too long.
With part of the brownfield expansion completed by March, the company will generate more free cash flow for future expansion. Although commodity prices have increased, captive sourcing has helped to expand the margin and show better profits, he added.