SAL Steel Limited, a major player in the manufacturing of Direct Reduced Iron, Ferro Alloys, and Iron Ore pellets, is the target of a significant open offer by Sree Metaliks Limited.

Open Offer Details

The open offer, valued at approximately ₹94.09 crore, aims to acquire up to 3,76,39,342 fully paid-up equity shares of SAL Steel at a price of ₹25.00 per share. This represents 26% of the expanded share capital of SAL Steel.

Background of the Acquisition

The open offer follows a series of strategic agreements between Sree Metaliks, SAL Steel, and its current promoters:

1. Share Purchase Agreement (SPA): Sree Metaliks has agreed to purchase 4,29,59,495 equity shares from the current promoters of SAL Steel at ₹25.00 per share, totaling ₹107.39 crore.

2. Share Subscription Agreement (SSA): SAL Steel will issue 1,92,50,000 new equity shares and 3,57,50,000 convertible warrants to Sree Metaliks on a preferential basis.

Impact on Shareholding

Upon completion of these transactions and assuming full acceptance of the open offer, Sree Metaliks is poised to hold a substantial 96.98% stake in SAL Steel, signaling a significant change in the company's ownership structure.

Strategic Implications

This acquisition is expected to strengthen Sree Metaliks' presence in the steel industry and potentially improve operational efficiencies. The company has expressed its intention to continue SAL Steel's existing business operations while exploring opportunities for diversification and improvement.

Management Changes

Following the completion of the first tranche of share purchases, the current promoters of SAL Steel will cease to be in control of the company. Sree Metaliks will acquire control, and the existing promoters will be reclassified from 'promoter' to 'public' shareholders.

Offer Timeline

Key dates for the open offer include:

Conclusion

This open offer marks a significant development in the Indian steel industry, potentially reshaping the competitive landscape. Shareholders of SAL Steel now have an opportunity to evaluate this offer in light of the company's future prospects under new management.

Investors and industry observers will be keenly watching how this acquisition unfolds and its impact on the broader steel sector in India.

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.