Shyam Metalics & Energy to Float Public Issue on June 14

With the gradual opening of the economy post the second Covid-19 wave induced lockdown of more than two months, there are indications that the primary market too is springing back to normal. After making an attempt to tap the primary market in 2018, Shyam Metalics & Energy Ltd will enter the capital Market on June 14, next week with its initial public offer (IPO). The company has fixed a price band of Rs 303-306 a share for its Rs 909 crore IPO.

The bidding for the Anchor investors for the IPO will begin from Friday June 11, while the IPO will remain open for the subscription for other category of investors from June 14 (Tuesday) to June 16 (Thursday), the company said in a statement.

The company had tried to tap the capital markets in the past too. It had filed draft papers for IPO with Sebi in 2018 and had even received clearance from the regulator too. However, the company deferred its plans to list on the bourses.

The IPO comprises fresh issuance of equity shares worth up to Rs 657 crore and an offer for sale (OFS) to the tune of Rs 252 crore by existing shareholders.

Now, the size of the public issue has been reduced to Rs 909 crore from Rs 1,107 crore as it has been decided to offloaded Rs 252 crore shares through OFS against Rs 450 crore as planned earlier.

As the second wave of Covid-19 hit India two and a half months ago, there was a lull prevailing in the IPO market. The last IPO before the second wave was from Macrotech Developers (erstwhile Lodha Developers) opened during April 7-9. The company offered shares in the price band of Rs 483-486 and mobilised Rs 2,500 crore.

Market players said the turbulence caused due to the second-wave of Covid-19 forced many companies to hold back their listing plans. However, a sharp rebound in the market since May has helped revive the IPO market, they said.

The benchmark Sensex has rallied more than 7 per cent since May 1.

SMEL IPO is coming on the back of a sharp rally in shares of metal companies. The Nifty Metal index has rallied 62 per cent so far this year. The second half of the calendar year 2021 is expected to be the year of start-up IPOs. Lot of start-ups like Paytm, Zomato and edu-tech companies are planning to tap the primary market with their offerings in the later part of the year, sources in the investment banking space said.

Those participating in the SMEL OFS are Subham Capital, Subham Buildwell, Kalpataru Housefin and Trading, Dorite Tracon, Narantak Dealcomm and Toplight Mercantiles.

The company intends to utilise the net proceeds from the fresh issue for repayment or prepayment of Rs 470 crore of its debt and that of its subsidiary, Shyam SEL and Power; and for other general corporate purposes.

Shyam Metalics and Energy, which filed preliminary IPO papers with the capital markets regulator Securities and Exchange Board of India (Sebi) in February, received its go ahead on May 11.

The Kolkata-based long steel products and ferro alloy focused company sells intermediate and final products across the steel value chain catering to institutional and end use customers through 42 distributors, brokers across 13 states and one union territory.

It currently operates three manufacturing plants that are located at Sambalpur in Odisha, and Jamuria and Mangalpur in West Bengal.

ICICI Securities, JM Financial, Axis Capital, IIFL Securities and SBI Capital Markets are the BRLMs (book running lead managers) to the issue.