Vraj Iron and Steel's ?171-crore IPO opens tomorrow: What GMP signals ahead of subscription

Raipur-based Vraj Iron and Steel Ltd. is set to raise ?171 crore through its initial public offering (IPO), opening for public subscription on Wednesday, June 26. The three-day initial share sale will conclude on Friday, June 28, with bidding for anchor investors starting later today.

The company's shares are currently trading at a premium of ?53 in the grey market, an unofficial platform where shares begin trading before the IPO allotment and continue until the listing day. Investors often monitor the Grey Market Premium (GMP) to gauge the potential listing price.

The IPO consists solely of a fresh issue with no offer-for-sale component. Shares will be sold in the range of ?195 to ?207 per share, with investors able to bid for a minimum of 72 equity shares per lot and in multiples thereof.

Proceeds from the IPO will be utilized for the expansion project at the Bilaspur facility and for general corporate purposes. Vraj Iron and Steel, engaged in the manufacturing of sponge iron, MS billets, and TMT bars, operates two manufacturing plants in Raipur and Bilaspur, Chhattisgarh.

Following the expansion, the company anticipates increasing its aggregate installed capacity from 231,600 tonnes per annum (TPA) to 500,100 TPA, and its captive power plants’ capacity from 5 MW to 20 MW.

For the fiscal year ending March FY23, Vraj Iron and Steel reported a substantial 88% year-on-year growth in net profit at ?54 crore, driven by robust operating performance. Revenue from operations rose by 24.5% to ?515.7 crore compared to the previous year.

Aryaman Financial Services is the sole book-running lead manager for the IPO, with Bigshare Services as the registrar. The equity shares of Vraj Iron and Steel are proposed to be listed on both the NSE and the BSE.