P S Raj Steels Ltd, a leading manufacturer and supplier of stainless-steel pipes and tubes in India, is set to launch its P S Raj Steels Ltd IPO on February 12, 2025.
P S Raj Steels Ltd IPO Details:
- Opening Date: February 12, 2025
- Closing Date: February 14, 2025
- Allotment Date: February 17, 2025
- Listing Date: Tentatively February 19, 2025P S Raj Steels
- Issue Size: The company plans to issue up to 2,020,000 equity shares with a face value of ₹10 each, aiming to raise approximately ₹28.38 crore.
- Price Band: The shares are priced between ₹132 and ₹140 per share.
- Lot Size: Investors can apply for a minimum of 1,000 shares, with subsequent applications in multiples of 1,000 shares.
- Subscription Period: The IPO opens on February 12, 2025, and closes on February 14, 2025.
- Listing: The company intends to list its shares on the NSE Emerge platform.
Promotors:
- Raj Kumar Gupta
- Deepak Kumar
- Vishal Gupta
- Gaurav Gupta
P S Raj Steels Ltd IPO Company Overview:
P S Raj Steels Ltd offers an extensive range of over 250 standard sizes of stainless-steel pipes and tubes, catering to various industries. In addition to manufacturing, the company trades in stainless-steel coils, strips, sheets, plates, and bars. As of March 31, 2024, approximately 30% of its revenue was derived from trading activities.
Financial Highlights:
For the fiscal year 2024, P S Raj Steels reported a revenue of ₹297.74 crore and a net profit of ₹6.36 crore.
Lead Manager and Registrar:
- Lead Manager: Khambatta Securities Ltd is the sole book-running lead manager for the IPO.
- Registrar: Bigshare Services Pvt Ltd is the registrar for the issue.
Investment Considerations:
While P S Raj Steels Ltd has demonstrated steady growth in its operations, investors should assess the company’s financial health, market position, and the IPO’s pricing relative to its earnings and industry peers. The issue appears fully priced based on recent financial performance.
Prospective investors are advised to conduct thorough due diligence or consult with a financial advisor before making investment decisions.
About P S Raj Steels Ltd IPO
P S Raj Steels Ltd is a leading manufacturer and supplier of stainless steel pipes and tubes in India. The company is known for its wide range of stainless-steel products that serve various industries, including automotive, construction, and industrial applications.
Here’s an overview of the company:
Business Overview:
- Products: P S Raj Steels manufactures over 250 standard sizes of stainless-steel pipes and tubes. It also trades in stainless-steel coils, strips, sheets, plates, and bars.
- Market Reach: The company has a strong market presence in India and exports its products to several countries.
- Revenue: As of March 31, 2024, around 30% of the company’s revenue comes from trading activities.
Operations:
- Location: The company operates out of a state-of-the-art manufacturing facility in India.
- Capacity: P S Raj Steels is equipped with advanced production technology to ensure the quality and durability of its products.
Financials:
- For the fiscal year 2024, P S Raj Steels reported a revenue of ₹297.74 crore and a net profit of ₹6.36 crore.
IPO Information:
- P S Raj Steels Ltd is looking to raise funds through its IPO, which is set to launch on February 12, 2025, with a price band of ₹132 to ₹140 per share.
Future Plans:
- The company plans to use the proceeds from the IPO to fund its business expansion, repay debts, and strengthen its financial position.
P S Raj Steels Ltd aims to become a more prominent player in the stainless-steel industry, leveraging its established reputation and expanding its production capacity.
P S Raj Steels Ltd IPO Lot Size
| Application | Lots | Shares | Amount |
| Retail (Minimum) | 1 | 1,000 | ₹1,40,000 |
| Retail (Maximum) | 1 | 1,000 | ₹1,40,00 |
| HNI (Minimum) | 2 | 2,000 | ₹2,80,00 |
Key Points:
- Minimum Lot Size: 1,000 shares.
- Application Multiple: Subsequent applications can be made in multiples of 1,000 shares.
- Price Band: ₹132 to ₹140 per share.
PS Raj Steels Limited Financial Information
Here is a summary of P S Raj Steels Ltd financial information based on their available data:
| Particulars | FY 2024 | 2023 | 2022 |
| Revenue | ₹297.74 Crore | ₹255.56 Crore | ₹218.35 Crore |
| Net Profit | ₹6.36 Crore | ₹5.12 Crore | ₹3.89 Crore |
| EBITDA | ₹12.98 Crore | ₹10.35 Crore | ₹8.47 Crore |
| Earnings per Share (EPS) | ₹4.61 | ₹3.85 | ₹2.97 |
| Net Worth | ₹45.10 Crore | ₹40.20 Crore | ₹35.10 Crore |
| Debt-Equity Ratio | 0.23 | 0.35 | 0.42 |
Key Points:
- Revenue Growth: The company has shown a consistent increase in revenue over the past three years.
- Profit Growth: Net profit has seen steady growth, reflecting strong business performance.
- EBITDA Margin: The company maintains a good EBITDA margin, indicating efficient operations.
- Debt Management: The low debt-equity ratio suggests sound financial health and minimal reliance on debt.
These figures highlight P S Raj Steels Ltd’s financial stability and growth trajectory.
Key Performance Indicator
Here are the Key Performance Indicators (KPIs) for P S Raj Steels Ltd, which help assess the company’s financial health and operational performance:
| KPI | Value for FY 2024 | Explanation |
| Revenue Growth | ₹297.74 Crore | Represents the total income from sales; growth indicates market expansion. |
| Net Profit Margin | 2.1% | Measures profitability after all expenses; calculated as Net Profit / Revenue. |
| EBITDA Margin | 4.4% | Measures operating profitability; calculated as EBITDA / Revenue. |
| Earnings per Share (EPS) | ₹4.61 | Indicates profitability on a per-share basis. |
| Return on Equity (ROE) | 14.1% | Measures how effectively the company generates profit from shareholders’ equity. |
| Debt-to-Equity Ratio | 0.23 | Indicates the company’s financial leverage, with a lower ratio showing lower reliance on debt. |
| Operating Cash Flow | ₹8.34 Crore | Measures the cash generated from operations, important for assessing liquidity. |
| Working Capital | ₹45.10 Crore | Indicates the company’s ability to cover short-term liabilities with short-term assets. |
| Inventory Turnover Ratio | 7.8 times | Measures how efficiently inventory is being turned into sales. |
Key Observations:
- Revenue Growth and Net Profit Margin indicate a healthy and growing business.
- EBITDA Margin reflects solid operational efficiency.
- ROE and Debt-to-Equity Ratio suggest good financial health with effective use of equity and a low reliance on debt.
- EPS gives an indication of profitability for shareholders.
These KPIs are crucial for understanding the financial stability, growth potential, and operational efficiency of P S Raj Steels Ltd.
P S Raj Steels Ltd IPO Objects of the Issue
The Objects of the Issue for the P S Raj Steels Ltd IPO are outlined as follows:
1) To Meet Working Capital Requirements:
- A significant portion of the funds raised from the IPO will be used to support the company’s working capital needs, which are essential for smooth day-to-day operations and meeting production demands.
2) Repayment of Borrowings:
- The company plans to use part of the proceeds to repay or reduce its existing debt. This would help improve the financial leverage and reduce interest expenses.
3) General Corporate Purposes:
- The remaining funds will be utilized for other general corporate purposes, which can include strategic investments, expansion plans, operational improvements, or strengthening the company’s financial position.
These objectives reflect the company’s focus on enhancing operational capacity, reducing debt burdens, and positioning itself for future growth.
P S Raj Steels Ltd Returns
Here’s a summary of P S Raj Steels Ltd’s returns for recent years, including key financial metrics that reflect the company’s performance:
| Return Metric | FY 2024 | 2023 | 2022 |
| Revenue Growth | 16.5% | 17.0% | 12.5% |
| Net Profit Growth | 24.2% | 31.6% | 30.3% |
| Earnings Per Share (EPS) | ₹4.61 | ₹3.85 | ₹2.97 |
| Return on Equity (ROE) | 14.1% | 12.7% | 11.1% |
| Return on Assets (ROA) | 4.2% | 3.9% | 3.4% |
| Dividend Yield | N/A | N/A | N/A |
Key Points:
- Revenue Growth: The company has shown strong and consistent revenue growth, particularly in FY 2024, indicating positive demand for its products.
- Net Profit Growth: There is a strong upward trajectory in profit, reflecting operational efficiency and successful cost management.
- EPS: Earnings per share have steadily increased, benefitting shareholders.
- ROE and ROA: Return on Equity (ROE) and Return on Assets (ROA) reflect the company’s ability to generate profit from both shareholder equity and its assets.
- Dividend Yield: The company has not declared any dividends in the recent years, likely reinvesting profits into growth and expansion.
These metrics demonstrate that P S Raj Steels Ltd has been showing positive growth in terms of revenue, profits, and returns, providing solid financial returns to its stakeholders.
Strengths of P S Raj Steels Ltd IPO:
1) Strong Market Position:
- P S Raj Steels is a well-established player in the stainless-steel pipes and tubes manufacturing industry. The company has built a reputation for quality, which gives it a competitive edge in the market.
2) Consistent Revenue and Profit Growth:
- The company has demonstrated steady revenue and net profit growth over the years, signaling a sound business model and strong demand for its products.
3) Diverse Product Portfolio:
- P S Raj Steels manufactures over 250 standard sizes of stainless-steel pipes and tubes, which allows the company to cater to a wide range of industries such as construction, automotive, and industrial sectors.
4) Experienced Management:
- The promoters and management have extensive experience in the stainless-steel industry, which is crucial for navigating market dynamics and driving business growth.
5) Low Debt-to-Equity Ratio:
- The company has a relatively low debt-to-equity ratio, which indicates good financial health and lower financial risk.
6) Expansion Plans:
- Funds raised from the IPO are aimed at enhancing working capital and reducing debt, positioning the company for future growth and more robust operational capabilities.
Risks of P S Raj Steels Ltd IPO:
1) Dependence on Raw Material Prices:
- The stainless-steel industry is highly sensitive to fluctuations in raw material prices (such as nickel and chromium). Volatility in these prices can adversely affect margins and profitability.
2) Competition in the Industry:
- The company faces stiff competition from both domestic and international players in the stainless-steel manufacturing space, which could impact its market share and pricing power.
3) Economic Sensitivity:
- The company’s performance is closely tied to economic conditions, particularly in the industrial and construction sectors. Any slowdown in these sectors could affect demand for its products.
4) Limited Geographic Diversification:
- While the company has a strong domestic presence, its international footprint may not be as developed, which could limit its growth potential in global markets.
5) Regulatory Risks:
- The company is subject to various government regulations, including environmental regulations, which could impact its operations. Any changes in these laws or increased compliance costs could pose challenges.
6) Profitability Pressure from Debt Repayment:
- While a portion of the IPO proceeds will be used to reduce debt, the company may face profitability pressure from the repayment of borrowings, especially if market conditions do not improve as expected.
Conclusion:
P S Raj Steels Ltd’s IPO presents a promising opportunity for investors, backed by solid growth, market leadership, and strategic plans for expansion. However, potential investors should consider the risks related to industry competition, raw material price fluctuations, and market volatility. It’s advisable to conduct further due diligence or consult with a financial advisor before investing.
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