Mittal Sections Launches Rs 53 Crore IPO to Fuel Expansion Plans
Ahmedabad-based Mittal Sections opened its IPO to raise Rs 53 crore, with a price band of Rs 136-143 per share. The subscription period is from October 3-9, 2023, with listing on BSE SME platform on October 14. The company plans to expand manufacturing capacity from 36,000 to 96,000 metric tonnes annually, meet increased working capital needs, and partially repay debts. Mittal Sections, operating under the MSL-Mittal brand, specializes in mild steel and structural steel products. Despite a slight decrease in total income, the company's profit after tax more than tripled in FY 2024 compared to FY 2023.
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Ahmedabad-based steel manufacturer Mittal Sections has opened its Initial Public Offering (IPO) to raise Rs 53 crore, marking a significant step in the company's growth strategy. The IPO, which opened for subscription on Tuesday, aims to fund the company's ambitious expansion plans and strengthen its financial position.
IPO Details
| Particulars | Details |
|---|---|
| Issue Size | Rs 53 crore |
| Price Band | Rs 136 - 143 per share |
| Minimum Investment | 2,000 shares (Rs 2.86 lakh) |
| Subscription Period | October 3 - October 9, 2023 |
| Listing Date | October 14, 2023 |
| Listing Platform | BSE SME |
| Grey Market Premium | 0% |
Company Overview
Mittal Sections, operating under the MSL-Mittal brand, specializes in manufacturing mild steel and structural steel products. The company caters to various industries, including construction, automotive, and engineering sectors.
Financial Performance
| Metric | FY 2024 | FY 2023 |
|---|---|---|
| Total Income | 161.65 | 167.53 |
| Profit After Tax | 1.89 | 0.56 |
All figures in Rs crore
Despite a slight decrease in total income, Mittal Sections has shown a significant improvement in profitability, with its profit after tax more than tripling in FY 2024 compared to the previous year.
Expansion Plans
The primary objective of this IPO is to fuel the company's growth strategy. Mittal Sections plans to utilize the funds raised for:
- Capacity Expansion: Increasing manufacturing capacity from 36,000 to 96,000 metric tonnes annually.
- Working Capital: Meeting the increased working capital requirements resulting from expanded operations.
- Debt Reduction: Partial repayment of existing debts to improve the company's financial position.
This strategic move to expand capacity by nearly threefold indicates Mittal Sections' confidence in market demand and its ability to scale operations effectively.
Market Outlook
The IPO comes at a time when the Indian steel industry is showing signs of robust growth, driven by increased infrastructure spending and a recovering automotive sector. However, investors should note that the grey market premium currently stands at 0%, suggesting a neutral market sentiment towards the issue.
As Mittal Sections prepares to list on the BSE SME platform, potential investors should carefully consider the company's growth prospects, industry dynamics, and their own risk appetite before making an investment decision.
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