SAL Steel Limited has announced that its Committee of Independent Directors has recommended accepting the open offer by Sree Metaliks Limited for the acquisition of equity shares from public shareholders.

Open Offer Details

According to the latest information:

• Sree Metaliks Limited has initiated an open offer to acquire up to 3,76,39,342 equity shares, representing 26% of the expanded share capital of SAL Steel.
• The offer price is set at ₹25.00 per equity share for cash consideration.
• The tendering period runs from November 28, 2025 to December 12, 2025.

Committee Recommendation

The Committee of Independent Directors has recommended accepting the open offer, describing the offer price as fair and reasonable to public shareholders. This recommendation comes despite the offer price being lower than recent market prices.

Committee Composition

The committee of independent directors comprises three members:

1. Mitesh Vasanibha Fariwala
2. Bipinbhai Amulakhbhai Goslia
3. Nipalraj Shah

Implications for Shareholders

Public shareholders of SAL Steel should carefully consider the committee's recommendation. Shareholders are advised to consult their financial advisors and carefully review all offer documents before making any decisions regarding their shareholdings in SAL Steel.

Corporate Governance

The formation of the independent committee and its recommendation demonstrate SAL Steel's commitment to corporate governance and shareholder protection. The committee's role in evaluating the open offer provides an additional layer of scrutiny in the takeover process.

SAL Steel Limited , a key player in the ferro alloys and sponge iron manufacturing sector, has reported a net profit of Rs 3.73 crore for the quarter ended September 30, 2023. This marks a significant turnaround from the previous quarter's loss of Rs 9.68 crore. However, the company's financial results come with notable auditor qualifications and amid a major ownership transition.

Financial Performance

The company's financial results for the quarter show:

The total revenue for the quarter stood at Rs 65.73 crore, a significant decrease from Rs 127.68 crore in the previous quarter. Despite the revenue decline, the company managed to turn a profit, largely due to a substantial reduction in expenses.

Auditor Qualifications

The company's auditors, Parikh & Majmudar, have issued a qualified opinion on the financial results, highlighting two key issues:

1. Unprovided Electricity Duty: The company has not made provisions for electricity duty amounting to Rs 12.69 lakh for the quarter. If accounted for, this would reduce the reported profit by the same amount.

2. Capital Work in Progress Impairment: The auditors noted that the company has not impaired its entire Capital Work in Progress. This non-impairment amounts to Rs 100.94 lakh, which, if recognized, would further reduce the reported profit.

These qualifications suggest that the actual financial position of the company may be less favorable than the reported figures indicate.

Ownership Transition

A significant development is underway regarding the company's ownership structure. The current promoters, Shah Alloys Limited and SAL Care Private Limited, have entered into a Share Purchase Agreement with Sree Metaliks Limited. This agreement involves:

• The sale of 4,29,59,495 equity shares and 48,00,000 share warrants held by the current promoters to Sree Metaliks Limited.
• A separate Share Subscription Agreement for Sree Metaliks to subscribe to 1,92,50,000 fresh equity shares and 3,57,50,000 share warrants for Rs 99 crore.

This transition is currently in process, with an open offer to public shareholders underway in compliance with SEBI regulations.

Market Implications

The company's return to profitability, despite reduced revenue, may be viewed positively by investors. However, the auditor qualifications raise concerns about the accuracy of the reported financial position. The ongoing ownership transition adds another layer of complexity to the company's future prospects.

Investors and market analysts will likely keep a close watch on how the new ownership, once finalized, might influence the company's strategic direction and financial management practices. The resolution of the issues highlighted by the auditors will also be crucial for building investor confidence in the coming quarters.

As SAL Steel navigates through these financial and structural changes, stakeholders will be keen to see how the company addresses the auditors' concerns and leverages the potential synergies from the new ownership structure to drive sustainable growth and profitability.