SAL Steel Limited , a prominent player in the Indian steel industry, has announced a significant change in its ownership structure and a substantial capital infusion through a preferential issue. The company's board of directors approved these strategic moves in a meeting held on September 4, 2025.

Share Purchase Agreement

SAL Steel's current promoters, Shah Alloys Limited and SAL Care Private Limited, have entered into a Share Purchase Agreement (SPA) with Sree Metaliks Limited. Under this agreement, Sree Metaliks will acquire:

• 3,02,56,989 equity shares from Shah Alloys Limited
• 1,27,02,506 equity shares and 48,00,000 share warrants from SAL Care Private Limited

This transaction will result in a change of control, with Sree Metaliks becoming the new promoter of SAL Steel Limited.

Preferential Issue

Simultaneously, SAL Steel's board has approved a preferential issue to Sree Metaliks Limited, comprising:

1. 1,92,50,000 equity shares at ₹18.00 per share, totaling ₹34.65 crore
2. 3,57,50,000 fully convertible warrants at ₹18.00 per warrant, amounting to ₹64.35 crore

The total fund raise through this preferential issue will be ₹99.00 crore. Each warrant is convertible into one equity share within 18 months from the date of allotment.

Pricing and Valuation

The issue price of ₹18.00 per share represents a premium to the current market price and has been determined based on the SEBI ICDR Regulations and a valuation report from an independent registered valuer.

Use of Proceeds

SAL Steel plans to utilize the funds raised for:

1. Working capital requirements
2. Establishment of a new pellet plant facility
3. Refurbishment and upgradation of furnace facilities
4. Strengthening and upkeep of plant infrastructure
5. General corporate purposes

Mandatory Open Offer

As required by SEBI regulations, Sree Metaliks will make a mandatory open offer to the public shareholders of SAL Steel following this transaction.

Change in Promoter Classification

Upon completion of the transaction, Sree Metaliks Limited will be classified as the new promoter of SAL Steel, while the existing promoters will be reclassified as public shareholders.

Increase in Authorized Share Capital

To facilitate the preferential issue, SAL Steel's board has approved an increase in the authorized share capital from ₹140.00 crore to ₹145.00 crore.

Management Comments

Babulal M. Singhal, Whole Time Director of SAL Steel, stated, "This strategic investment by Sree Metaliks marks a new chapter for SAL Steel. The capital infusion will strengthen our balance sheet and provide resources for expansion and modernization of our facilities. We believe this partnership will create significant value for all stakeholders."

The proposed transactions are subject to necessary regulatory approvals and shareholders' consent, which will be sought at the upcoming Annual General Meeting scheduled for September 26, 2025.

SAL Steel's shares closed at ₹17.86 on the National Stock Exchange prior to this announcement.

SAL Steel Limited , a prominent player in the Indian steel industry, has announced significant strategic moves that will reshape its ownership structure and potentially boost its financial position. The company's board has approved two key agreements with Sree Metaliks Limited, marking a major shift in its corporate landscape.

Share Purchase Agreement: A Change in Ownership

The board has given the green light to a Share Purchase Agreement (SPA) that will see the current promoter shareholders, Shah Alloys Limited and SAL CARE Private Limited, sell a substantial portion of their stakes to Sree Metaliks Limited. Specifically:

• Shah Alloys Limited will divest 3,02,56,989 equity shares, representing 33.71% of the diluted equity share capital.
• SAL CARE Private Limited will sell 1,27,02,506 equity shares and 48,00,000 share warrants.

This transaction will result in Sree Metaliks Limited becoming the new promoter of SAL Steel, while the existing promoters will be reclassified as public shareholders.

Share Subscription Agreement: Infusion of Fresh Capital

Simultaneously, the board has approved a Share Subscription Agreement (SSA) with Sree Metaliks Limited. Under this agreement, SAL Steel will issue:

• 1,92,50,000 equity shares at ₹18.00 per share, raising ₹34.65 crores.
• 3,57,50,000 warrants at an exercise price of ₹18.00 per warrant, potentially bringing in an additional ₹64.35 crores.

This preferential allotment aims to raise a total of ₹99.00 crores, significantly strengthening SAL Steel's financial position.

Increase in Authorized Share Capital

To accommodate the new share issuance, the board has approved an increase in the company's authorized share capital from ₹140.00 crores to ₹145.00 crores.

Implications and Next Steps

Post-transaction, Sree Metaliks Limited is expected to hold a 37.99% stake in SAL Steel, cementing its position as the new promoter. This change triggers a mandatory open offer under SEBI regulations, allowing other shareholders an opportunity to exit or stay invested under the new management.

The deals are subject to shareholder approval, which will be sought at the upcoming 22nd Annual General Meeting scheduled for September 26, 2025. Regulatory approvals, including those from SEBI and other relevant authorities, will also be required to complete the transaction.

Financial Considerations

The equity shares and warrants will be issued at ₹18.00 per share, which includes a premium of ₹8.00 over the face value of ₹10.00. For the warrants, 25% of the price will be payable at allotment, with the remaining 75% due upon conversion into equity shares within 18 months.

Market Impact

These strategic moves are likely to have a significant impact on SAL Steel's market position and future growth prospects. The infusion of fresh capital could provide the company with the resources needed for expansion or debt reduction, while the change in promotership might bring new strategic direction and management expertise.

As the steel industry continues to evolve, SAL Steel's new partnership with Sree Metaliks could potentially enhance its competitiveness and market presence. Shareholders and market observers will be keenly watching how this transition unfolds and its implications for the company's performance in the coming years.

The company has emphasized that all disclosures related to these agreements will be available on its website, ensuring transparency for all stakeholders as this significant corporate restructuring moves forward.