A-One Steel India Files DRHP For Rs 650-Crore IPO; Check Details
A-One Steel India Ltd. filed its draft red herring prospectus with the Securities and Exchange Board of India for Rs 650-crore initial public offer. The offer consists of a fresh issue worth Rs 600 crore and Rs 50 crore offer for sale.
Promoters Sandeep Kumar, Sunil Jallan, and Krishnan Kumar Jalan will offload shares with a face value of Rs 10 up to Rs 50 crore or 25.13% of their total holding, according to the DRHP. Post the initial offer, A-One Steel India will be listed on National Stock Exchange Ltd. and BSE Ltd.
PL Capital Markets Pvt. Ltd., Khambatta Securities Ltd., Bigshare Services Pvt. are the book running lead managers for the initial public offer issue.
A-One Steel India is raising funds via initial public offer to expand its subsidiary Vanya Steels Pvt. Ltd. facility and purchase equipment and machineries, the company said in the DRHP. The estimated requirement for this purpose is Rs 344.37 crore.
A-One Steel India has bought 85.34 acres land adjacent to Koppal Facility in Karnataka for the expansion. The company intends to manufacture stainless steel roads at the new facility, which will add to the advantage of the company as apart from Steel Authority of India nobody manufactures stainless steel rod. It's also in process of acquiring approval to set up a railway siding line. "We proposed to purchase additional 31.17 acres in terms of multiple sale agreements to set up this railway siding line out of which for 3.37 acres sale deed has been executed," the company said.
A-One Steel India will also use the proceeds to fund the required Rs 400 crore for equity investment in Vaanya Steels to invest in Group Captive Companies to procure solar energy, the DRHP said.
Apart from expansion activities, A-One Steel India will use the proceeds from the IPO to fund outstanding borrowing of Rs 100 crore.
A-One Steel India is a backward integrated steel manufacturer in the South India with diversified portfolio in both long and flat steel products and industrial products used in steel manufacturing, the company said in the DRHP.
It's one of the top five steel producers in South India, in terms of crude steel capacity, A-One Steel India said citing Crisil report. It's also the only company manufacturing 10 steel products and industrial products.
A-One Steel India also sources significant amount of green energy in comparison to its peers. "Our TMT bars of grading Fe 550 D CRS, Fe 500 D CRS, Fe 550 CRS of sizes (8 mm, 10 mm,12 mm, 16 mm, 20 mm, 25 mm, 32 mm) produced at our Gauribidanur and Hindupur plants, have been certified as a green product by the CII – Green Products and Services Council."
The company has also made eight power purchase agreement for solar power, and seven power purchase agreement for wind power on long-term contractual basis for its manufacturing energy requirement, the DRHP said.
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