Purohit Steel India IPO

About Purohit Steel India IPO

Purohit Steel India Limited IPO is an IPO of TBA. It consists of a fresh issue of up to 38,40,000 equity shares. The shares will be allotted on TBA. The credit of shares to the demat account will take place on TBA, and the initiation of refunds will take place on TBA.

Objective of Purohit Steel India IPO

• Funding of capital expenditure towards the setup of a new processing facility.
• Funding the working capital requirements of the company.
• General corporate purpose.

Industry Outlook

The steel industry has emerged as a major focus area given the dependence of a diverse range of sectors on its output as India works to become a manufacturing powerhouse through policy initiatives like Make in India. With the industry accounting for about 2% of the nation's GDP, India ranks as the world's second-largest producer of steel and is poised to overtake China as the world's second-largest consumer of steel. Both the industry and the nation's export manufacturing capacity have the potential to help India regain its favourable steel trade balance. The per capita consumption of steel has increased from 57.6 kg to 74.1 kg during the last five years. The government has a fixed objective of increasing rural consumption of steel from the current 19.6 kg per capita to 38 kg per capita by 2030-31. As per the Indian Steel Association (ISA), steel demand will grow by 7.2% in 2019-20 and 2020-21. Huge scope for growth is offered by India's comparatively low per capita steel consumption and the expected rise in consumption due to increased infrastructure construction and the thriving automobile and railways sectors.

Company Information

Incorporated in 2013, Purohit Steel India Limited processes special-grade alloy steels which include plastic mould steel, hot work tool steel, cold work tool steel, EN Series steel and high-speed steel that are integral to various industrial applications. They serve major industrial end users in sectors such as automotive, aerospace, electronics, telecom, refractories, plastic products, packaging, mining equipment, and machine manufacturing. Their special steel products are crucial for manufacturing moulds and dies used in producing automotive components, home appliances, electronic goods, sheet metal items, plastic items, pipe fittings, and packaging items such as caps, closures, toys, and luggage. Beyond moulds and dies, their specialty steel products are utilised in producing machine components, die casting components, and heavy engineering components.

Risks of Purohit Steel India IPO

• They derived a significant portion of their revenue from the sale of their key product, i.e. plastic mould steel. Any decline in the sales of their key product could have an adverse effect on their business, results of operations, and financial condition : Any decline in the sales of plastic mould steel on account of any reason, including increased competition, pricing pressures, or fluctuations in the demand for or supply of such products, may adversely affect their business, results of operations, and financial condition.

• Their cost of production is exposed to fluctuations in the prices of their raw material, and thus any disruption in the supply of the raw material or volatility in the supply and pricing of their raw material could have an adverse effect on their business, cash flows, financial condition, and results of operations. : In case of an increase in raw material prices, there can be no assurance that they will be able to pass such cost increases to their customers. Any increase in the cost of inputs to their production could lead to higher costs for their products. If they increase the prices of their products to offset the impact of higher costs, this may cause certain of their customers to cancel orders or refrain from purchasing their products, which may materially and adversely reduce the demand for their products and, thus, negatively impact their operating results. If they are unable to pass on cost increases to their customers or are unsuccessful in managing the effects of raw material price fluctuations, their business, financial condition, results of operations, and cash flows could be materially and adversely affected.

• They are exposed to foreign currency fluctuation risks, particularly in relation to import of raw materials, which may adversely affect their results of operations, financial condition, and cash flows : Their global operations expose them to foreign exchange rate risks, arising primarily from their payables and import of goods. Changes in the value of currencies with respect to the Rupee may cause fluctuations in their operating results expressed in Rupees. The exchange rate between the Rupee and other currencies is variable and may continue to fluctuate in the future. Depreciation of the Indian Rupee against the USD may adversely affect their results of operations by increasing the cost of the raw materials they import or any proposed capital expenditure in foreign currencies.

Anchor Investor Information

The Anchor Investor Bid/Issue Period shall be one Working Day prior to the Bid/Issue Opening Date.

IPO Registrar and Book Running Lead Managers

Book running lead managers: Seren Capital Private Limited

Registrar for the IPO: Bigshare Services Private Limited

Business Model

The company earns its revenue through the following sources:

Processing of special-grade alloy steel which includes plastic mould steel, hot work tool steel, cold work tool steel, EN Series steel and high-speed steel that are integral to various industrial applications, serving major industrial end users in sectors such as automotive, aerospace, electronics, telecom, refractories, plastic products, packaging, mining equipment, machine manufacturing etc.

Company Growth Trajectory

The Revenue from Operations for the company grew from ₹92.252 crore in FY23 to ₹101.321 crore in FY24. EBITDA also grew from ₹15.594 crore in FY23 to ₹1,659.74 crore in FY24.

Company Market Position

For fiscal 2024, they served over 850 customers, including renowned listed entities such as Bharat Forge Limited, Dixon Technologies India Limited, VIP Industries Limited, Varroc Engineering Limited, Harsha Engineers International Limited, Polycab India Limited, Maharashtra Scooters Limited, Mahindra EPC Irrigation Limited and Godrej & Boyce Manufacturing Company Limited. During fiscal 2024, they sold their products in India to 14 states and 2 union territories, including Maharashtra, Gujarat, Dadra and Nagar Haveli & Daman and Diu, Karnataka, Telangana, Haryana, Delhi, etc. As of 31 August 2024, their sales & marketing team comprised 12 employees managing the designated regions within India. Their revenue from operations grew at a CAGR of approximately 27.89% from FY 2021-22 to 2023-24, and EBITDA grew at a CAGR ("EBITDA CAGR") of 44.41% during the same period. Their PAT margin expanded to 9.95% of total income in financial year 2022-23 from 5.96% of total income in financial year 2021-22.

How To Check Allotment Status of Purohit Steel India IPO?

You can check the allotment status of shares either on the website of the National Stock Exchange (NSE) or on the website of the registrar Bigshare Services Private Limited. To check the status on the NSE website:

• Visit the NSE website
• Click on “Investor Services” and choose “Application Status Check”
• Choose the issue type — Equity or Debt (Equity in this case)
• Select the Issue Name from the drop-down. The issue name is the company’s name, which is Purohit Steel India Limited
• Enter your application number or PAN number
• Check the box which says “I’m not a Robot” and click on “Search” to know the allotment status

Follow these steps to know the allotment status on the registrar’s website:

• Visit the Bigshare Services Private Limited website
• Choose “Public Issues” from the “Investor Services” drop-down
• Select Purohit Steel India Limited from the drop-down
• Enter your PAN number or Application number
• Click on “Submit” to know the allotment status

How To Apply for Purohit Steel India IPO?

• Step 1: Log in to your Kotak Securities Demat account: Log in to your Demat account to access IPO investments. Next, select the current IPO section.
• Step 2: Specify IPO details: Enter the number of lots and the price you wish to apply for.
• Step 3: Enter UPI ID After entering your UPI ID, click submit. This will place your bid with the exchange.
• Step 4: Mandate Notification: Your UPI app will receive a mandate notification to block funds.
• Step 5: Approve Request Your funds will be blocked once you approve the mandate request on your UPI.