German Green Steel and Power, a prominent vertically integrated iron and steel manufacturer based in Gujarat, is set to launch its Initial Public Offering (IPO) on September 25. The public issue will be available for subscription until September 29, with the anchor investor portion opening a day earlier on September 24.
IPO Details and Price Band
The company has fixed the price band for its equity shares at Rs 132 to Rs 139 per share, with a face value of Rs 10 each. Investors can bid for a minimum of 107 shares, with subsequent bids in multiples thereof. At the upper end of the price band, German Green Steel and Power expects to raise Rs 303.9 crore, leading to a post-issue market capitalization of approximately Rs 1,047.35 crore.
The IPO comprises a fresh issue of up to Rs 290 crore and an offer for sale (OFS) of up to Rs 13.9 crore. Allocation for the issue is structured as follows: 50% for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and 35% for retail investors.
Objectives of the Issue
The proceeds from the fresh issue are earmarked for several strategic initiatives. A significant portion will fund capital expenditure for the expansion of its manufacturing facility located at Samakhiali in Kutch, Gujarat. Additionally, funds will be allocated for establishing a hybrid wind-solar power plant, reflecting the company's commitment to reducing its reliance on grid electricity.
A part of the proceeds will also be utilized for the prepayment or repayment of certain outstanding borrowings, with the remaining amount designated for general corporate purposes.
Company Profile and Financial Performance
German Green Steel and Power primarily operates in western India, with a strong presence in Gujarat. The company's product portfolio includes TMT bars (marketed under the popular 'German TMT' brand), mild steel billets, and sponge iron. It operates two manufacturing facilities in Gujarat, one at Samakhiali and another at Viramgam, managed through its material subsidiary, German TMX.
As of December 31, 2024, approximately 67.72% of the company's energy requirements were met through its captive power and renewable energy plants, underscoring its focus on sustainable operations. Plans are in place to further enhance this self-sufficiency with an additional hybrid wind-solar power plant.
Financially, German Green Steel and Power has demonstrated consistent growth. Its revenue from operations grew at a compound annual growth rate (CAGR) of 12.53% from Rs 892.25 crore in FY22 to Rs 1,129.78 crore in FY24. EBITDA saw a substantial CAGR of 43.04%, rising from Rs 39.15 crore in FY22 to Rs 80.11 crore in FY24, with the EBITDA margin improving from 4.39% to 7.09%.
Profit after tax (PAT) increased at a CAGR of 10.43%, from Rs 34.16 crore in FY22 to Rs 41.67 crore in FY24. For the nine-month period ended December 31, 2024, the company reported revenue from operations of Rs 979.79 crore, with EBITDA at Rs 68.18 crore and PAT at Rs 32.07 crore.
Listing and Management
Systematix Corporate Services, Emkay Global, and Pantomath Capital are the book-running lead managers for the issue, while MUFG Intime India serves as the registrar. The equity shares of German Green Steel and Power are proposed to be listed on both the BSE and NSE.