Loha Ispaat IPO opens on 11th March 2014

The Price Band has been fixed at Rs 77 to Rs 80 per equity share of Rs 10 each and the Issue closes on 20th March 2014.

March 10, 2014 3:27 IST | India Infoline News Service
Loha Ispaat Limited, a company with organized Independent Steel Service Centers having an existing client base of over 500 customers pan India, proposes to enter the capital markets on 11th March 2014 with a public issue of 26,705,476 equity shares of Rs 10 each through 100% book building process.

The Price Band has been fixed at Rs 77 to Rs 80 per equity share of Rs 10 each and the Issue closes on 20th March 2014.  The Issue will constitute 26.44% of the post Issue paid-up equity share capital of the Company. The equity shares are proposed to be listed on the BSE and NSE. The Issue has been graded by CARE as ‘CARE IPO Grade 3’, indicating average fundamentals. Aryaman Finanacial Services Limited is the sole Book Running Lead Manager for the Issue and Bigshare Services Pvt.Ltd is the Registrar to the Issue.
The Company proposes to utilize the net proceeds of the Issue to meet its increasing requirement of working capital. It procures HR Coils, CR Coils in large quantities from major suppliers and upon receiving orders from customers, it process the steel by slitting, shearing and gas cutting as per requirement and dispatch the finished product to the customer. The lead time for procuring steel is high and also in order to ensure readily available customized product along with a low lead time for  customers, it needs to stock different grades and dimensions of steel to meet customers’ varied need. Further, it is required to provide sufficient credit period to customers resulting in high receivables.
Loha Ispaat Ltd  serves a well-diversified base of customers across industries like Automobile, Bearing, Fabrication, Packaging, General Engineering, Pipe manufacturing, White Goods, Infrastructure, Home Appliances etc. Currently it operates from two locations in Western Maharashtra, i.e. at Khopoli and Taloja, both of which are within a range of 100 kms from Mumbai. The quality standards of the processing facilities are ISO 9001:2008 certified. The existing Khopoli Unit provides various lines for Slitting and CTL facilities and has been operating an installed capacity of 900,000 MTPA, which would stand further, augmented to 2,181,900 MTPA post the current expansion project which has started initial commercial production in September 2012.

The Taloja Unit operates manual pickling of HR sheets and plates with an annual capacity of 105,000 TPA and the Company has also commissioned a Cold Rolling Mill (CRM) Complex with a capacity of 30,000 TPA, which will include Automatic Push-Pull Pickling, CRM , Skin Pass Mill, Rewinding cum Slitting Line and Bell Annealing Furnace, at nearby locations in M.I.D.C, Taloja. The proposed CRM complex has started initial commercial production with the automatic push-pull pickling division in September 2012.
In order to consolidate its presence across India, to help  gain a strong foothold in the regional markets having  huge untapped potential, Loha Ispaat has a team of localized marketing personnel for its marketing operations. In addition, the company is supported by two subsidiaries in Dubai & Hong Kong in order to carry out its international business and marketing activities.
Loha Ispaat’s consolidated Revenues have grown from Rs 1523.75 crore in fiscal 2009-10 to Rs 3435.72 crore in fiscal 2012-13, representing a CAGR of 31.13%. The consolidated earnings before interest, tax, depreciation and amortization have increased from Rs 106.396 crore in 2009-10 to Rs 237.42 crore in 2012-13, representing a CAGR of 30.68%. The consolidated profit after tax has increased from Rs 45.97 crore in fiscal 2009-10 to Rs 70.44 crore in fiscal 2012-13, representing a CAGR of 15.29%. The consolidated Revenues, earnings before interest, tax, depreciation and amortization and profit after tax for the six months period ended September 30, 2013, amounted to Rs 2024.41 crore, Rs 140.95 crore and Rs 38.91 crore respectively,

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