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Siyaram Recycling Industries IPO

13 Dec 2023

Introduction:

Small and medium-sized enterprises (SMEs) are the driving forces behind India’s continuous economic growth in the last few decades. Like mainboard companies, these SMEs often float their Initial Public Offerings (IPOs) to raise capital for their expansion. SME IPOs allow investors to invest in growing companies and seek long-term profits.

One SME planning to launch its IPO soon is Siyaram Recycling Industries Ltd. The company plans to raise up to Rs. 23 crores through the IPO, which opens for public subscription on Thursday, 14 December 2023. Continue reading to delve deep into the details of Siyaram Recycling Industries IPO, including the issue size, price band, essential dates, and more. 

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About Siyaram Recycling Industries Limited

Siyaram Recycling Industries Limited is an established brass recycling and manufacturing player. The company’s primary business activities include segregating brass scrap, manufacturing brass ingots, billets, and rods, and using them to produce brass-based components, specifically for the plumbing and sanitation industry. The company was incorporated in 2007.

Siyaram Recycling Industries Ltd. carries out its brass recycling and manufacturing activities across the three facilities in the Jamnagar district in Gujarat. The company’s products are marketed and supplied to more than 18 states and union territories in India as well as a few international destinations, including China, Belgium, Oman, and Germany.

Key Strengths of the Company

Examining the strengths of the issuing company can provide valuable insights into its potential for future growth and assist you in making a well-informed decision when considering an investment in its IPO. The following are the primary strengths of Siyaram Recycling Industries Limited, as outlined in the company's Red Herring Prospectus (RHP):

  • The company's three manufacturing facilities are strategically located in Jamnagar, Gujarat. Its proximity to ports facilitates the seamless export of products
  • The company follows a stringent quality control mechanism to ensure the best quality products. It has received numerous certifications for quality adherence
  • The company has a well-diversified client base, spreading across international borders. It has long-standing relationships with marquee customers
  • The company draws raw materials for brass processing from robust suppliers across the country

Key Risks or Weaknesses

Evaluating risks and weaknesses can help you get an idea of the potential threats that could impede a company's sustained growth. The primary risks and weaknesses linked to Siyaram Recycling Industries Ltd. comprise:

  • There are outstanding legal proceedings against the company
  • The company is highly dependent on a few suppliers to source raw materials
  • The company derives a significant portion of its revenue from limited customers
  • The company requires specific permits, licenses, and approvals from the government to carry out industrial operations

Core Financials of the Company

Before investing in an IPO, you must analyze the issuing company’s financials. Doing so aids in determining the company's potential for substantial future profits, facilitating an informed investment decision. The table below illustrates the fundamental financials of Siyaram Recycling Industries Ltd. for the last three concluded financial years:

Particulars As of and for FY Ended March 31
2023 2022 2021
Equity Share Capital 14 14 14
Total Net Worth 46 39 36
Total Borrowings 67 28 29
Revenue From Operations 498 426 140
Profit After Tax 8 3 1
Earnings Per Share (Diluted) 5.54 2.34 1.03
Return on Net Worth (%) 16.49% 8.32% 4%

*Amount in Crores

Source – RHP Dated 23 November 2023 on BSE website

Details of the IPO

Siyaram Recycling Industries IPO will open for public subscription on Thursday, 14 December 2023, and closes on Monday, 18 December 2023. It will be a book-built IPO, comprising only a fresh issue of 49.92 lakh equity shares worth Rs. 22.96 crores. Retail investors can apply for a minimum of 3,000 shares (and in multiples thereof) in the price band of Rs. 43 to Rs. 46 per share. 

The table below illustrates more IPO details:

IPO Date 14 December to 18 December 2023
Basis of Allotment 19-Dec-23
Listing Date 21-Dec-23
Face Value Rs. 10 per share
Price Band Rs. 43 to Rs. 46
Lot Size 3,000 shares
Total Issue Size 4,992,000 equity shares (Worth Rs. 22.96 crores)
Fresh Issue 4,992,000 equity shares (Worth Rs. 22.96 crores)
Listing At NSE SME

To conclude

Considering robust financials and fair valuation, Siyaram Recycling Industries IPO seems attractive. It can be an opportunity for investors to become a part of the growing industry and seek long-term profit. But before investing, you must carefully analyse factors such as the issuing company’s fundamentals, your risk appetite, investment goals, and the prevailing market conditions.

In case you need to open a Demat account to invest in this IPO, you can do so online for free with Motilal Oswal. 

 

Related Articles:  How to Analyse an IPO | What is IPO Grading? | S J Logistics IPO: Check Issue Size, Date, and Price Band 

 

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