NewsIPOMittal Sections IPO Closes with Moderate Subscription, No Grey Market Premium Ahead of ListingMittal Sections IPO Closes with Moderate Subscription, No Grey Market Premium Ahead of Listing
Mittal Sections, a steel manufacturer, completed its SME IPO with a 2.25 times overall subscription. The company raised Rs 52.90 crore and is set to list on the BSE SME platform on October 14. Retail investors showed the highest interest with a 4.08x subscription rate. The IPO's proceeds will be used for capacity expansion, working capital, and partial debt repayment. Despite a 15% revenue decline, the company reported a 91% increase in profit. However, the absence of a grey market premium suggests tempered market expectations for the listing.
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Mittal Sections, a steel manufacturer, has concluded its Small and Medium Enterprise (SME) Initial Public Offering (IPO) with a moderate overall subscription of 2.25 times. The company, set to list on the BSE SME platform on October 14, raised Rs 52.90 crore through the fresh issue of shares. However, the absence of a grey market premium suggests tempered expectations for the listing.
Subscription Details
The IPO garnered varied interest across investor categories:
| Investor Category | Subscription Rate |
|---|---|
| Retail Investors | 4.08x |
| Qualified Institutional Buyers | 1.13x |
| Non-Institutional Investors | 0.55x |
IPO Specifics
- Issue Size: 37 lakh shares
- Price Band: Rs 136-143 per share
- Post-Issue Market Cap: Rs 165.00 crore
Fund Utilization
The company plans to use the IPO proceeds for:
- Capacity expansion from 36,000 MTPA to 96,000 MTPA
- Meeting working capital requirements
- Partial debt repayment
Company Overview
Mittal Sections manufactures mild steel and structural steel products under the MSL-Mittal brand. Their products cater to the construction, infrastructure, and engineering sectors.
Financial Performance
Despite a 15% decline in revenue to Rs 137.00 crore, the company reported a significant jump in profit:
| Metric | Value |
|---|---|
| Profit Increase | 91% |
| Net Profit | Rs 3.61 crore |
| Return on Equity (ROE) | 34.90% |
| Return on Capital Employed (ROCE) | 31.30% |
| Debt-to-Equity Ratio | 2.04 |
Market Expectations
The zero grey market premium indicates muted expectations for the stock's debut on the BSE SME platform. Investors and market watchers will be closely monitoring the listing performance on October 14.
While the IPO has managed to secure full subscription, the varying interest across investor categories and the absence of a grey market premium suggest a cautious approach from the market. The company's plans for expansion and its recent financial performance will be key factors to watch as it transitions to a publicly-traded entity.
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