NewsCorporate ActionsShah Alloys to Shut Down Entire Iron and Steel Plant in Gujarat, Citing Losses and ObsolescenceShah Alloys to Shut Down Entire Iron and Steel Plant in Gujarat, Citing Losses and Obsolescence
Shah Alloys Limited is closing its Iron and Steel Plant in Santej, Gujarat within a month. The plant, accounting for 100% of operations, generated revenue of Rs 26,728.00 lakh but incurred a loss of Rs 2,729.00 lakh. Reasons include lack of competitiveness, technological obsolescence, higher production costs, and consistent losses. The company plans to explore new options post-closure.
*this image is generated using AI for illustrative purposes only.
Shah Alloys Limited, a Gujarat-based steel manufacturer, has announced the closure of its entire Iron and Steel Plant operations at Santej, Gujarat. The decision, approved by the company's board of directors, marks a significant shift in the company's operations and future strategy.
Closure Details
The company expects to complete the shutdown process within one month. This closure affects the plant situated at Village Santej, Taluka-Kalol, District Gandhinagar, Gujarat-382721.
Financial Impact
The closure of the Santej plant will have a substantial impact on Shah Alloys' operations:
| Particulars | Iron & Steel (Entire Plant) Operation | % of Total Operation |
|---|---|---|
| Revenue | 26,728.00 lakh | 100% |
| Profit after Tax | (2,729.00 lakh) | NA |
| Net Worth | 4,030.00 lakh | 100% |
The plant, which accounted for 100% of the company's operations, generated revenue of Rs 26,728.00 lakh. However, it also recorded a significant loss after tax of Rs 2,729.00 lakh.
Reasons for Closure
Shah Alloys cited several factors contributing to the plant's closure:
- Lack of Competitiveness: The aging plant and machinery have rendered the operations uncompetitive in the current market.
- Technological Obsolescence: The existing technology is outdated, leading to inefficiencies in production.
- Higher Production Costs: The company is unable to recover the increased production costs from customers, making operations financially unsustainable.
- Consistent Losses: The Iron and Steel Plant has been incurring losses for several years, draining the company's resources.
Future Plans
Following the shutdown, Shah Alloys plans to explore new options that align with the company's best interests. The management views this closure as a necessary step to stem ongoing losses and position the company for potential future opportunities.
Regulatory Compliance
The closure decision was made in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has duly informed the BSE Limited and the National Stock Exchange of India Ltd. about this development.
As Shah Alloys Limited moves forward with this significant operational change, stakeholders will be keenly watching the company's next steps and its strategy to navigate the challenges in the steel industry.
Historical Stock Returns for Shah Alloys
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -2.18% | -7.81% | +18.57% | +46.28% | -38.27% | +885.63% |
15
