Newmalayalam Steel Limited, a manufacturer of galvanized pipes, tubes, and sheets, is gearing up for its market debut with a ₹41.76 crore initial public offering (IPO), featuring a fresh issue of 46.40 lakh shares. The subscription window will open on December 19, 2024, and close on December 23, 2024, offering investors a chance to engage with this emerging industrial player. The company’s shares are slated to list on the NSE SME platform on Tuesday, December 27, 2024, marking a significant step in its growth journey.
Priced within an attractive range of ₹85 to ₹90 per share, the IPO offers equity shares with a face value of ₹10. Retail investors can participate with a minimum investment of ₹1,44,000 for 1 lot (1,600 shares), while High Net-worth Individuals (HNIs) need to subscribe to a minimum of 2 lots, amounting to ₹2,88,000. The post-subscription process is expected to progress swiftly, with allotment notifications scheduled for December 24, 2024, ahead of its listing. For those tracking share market investment opportunities in the SME segment, Newmalayalam Steel’s IPO presents an exciting entry point into the industrial manufacturing space. Keep an eye on this dynamic company as it prepares to make waves in the market.
Newmalayalam Steel Limited IPO is a fundraise worth ₹41.76 crores comprising purely of a fresh issue with 233,000 shares reserved for the market maker Aftertrade Broking Private Limited. Qualified Institutional Buyers are being offered not more than 50% of the net issue, retail investors are being offered not less than 35% of the net issue and Non-Institutional Investors (NIIs) / High Net-worth Individuals (HNIs) are being offered not less than 15% of the net issue. The IPO will be available for subscription from December 19, 2024, to December 23, 2024, providing an opportunity for investors looking to gain a stake in the steel sector.
| Newmalayalam Steel IPO Date | December 19, 2024 - December 23, 2024 |
| Price Band | ₹85 to ₹90 per share |
| Face Value | ₹10 per share |
| Lot Size | 1,600 shares |
| Issue Type | Book Built Issue IPO |
| Fresh Issue Size | 46,40,000 shares worth ₹10 per share (amounting to ₹41.76 crores) |
| Total Issue Size | 46,40,000 shares worth ₹10 per share (amounting to ₹41.76 crores) |
| Listing at | NSE SME |
| Market Maker Portion | 233,600 - Aftertrade Broking Pvt Ltd |
| Share Holding Post Issue | 1,72,87,600 |
| Share Holding Pre Issue | 1,26,47,600 |
The Newmalayalam Steel Limited IPO opens for subscription on December 19, 2024, and closes on December 23, 2024, with allotment scheduled for December 24, 2024.
| IPO Open Date | December 19, 2024 (Thursday) |
| IPO Close Date | December 23, 2024 (Monday) |
| Basis of Allotment | December 24, 2024 (Tuesday) |
| Initiation of Refunds | December 26, 2024 (Thursday) |
| Credit of Shares to Demat Account | December 26, 2024 (Thursday) |
| Listing Date on NSE SME | December 27, 2024 (Friday) |
| Cut-off Time for UPI Mandate Confirmation | 5 PM on December 23, 2024 (Monday) |
NewMalayalam Steel Limited specializes in manufacturing galvanized pipes, tubes, and sheets, with a focus on quality products that have earned it brand equity under the "Demac Steel" name. The company operates an electric resistance welding tube mill with an installed capacity of 3,500 metric tons at its manufacturing unit located in Kerala, India. Its product quality and market reputation have enabled it to establish strong relationships with clients like Jaihind Steel Private Limited, Aashico Ventures LLP, and George Infra Private Limited, among others.
Incorporated in 2017, NewMalayalam Steel Limited took over the operations of Demac Steel, including its assets and liabilities, as a going concern. This acquisition allowed the company to build on an existing foundation and expand its presence in the steel manufacturing sector. With a focus on innovation and consistent quality, the company continues to serve a growing customer base and strengthen its position in the domestic market.
The company plans to utilize the net proceeds from the offer for multiple growth-focused initiatives, including upgrading IT and technological systems at its existing manufacturing facility and expanding its solar power generation capabilities. Funds will also be allocated towards the construction of a new factory shed and storage facility at its Kerala plant, along with advertising, marketing, and brand-building efforts. Additionally, the proceeds will support incremental working capital needs, cover issue-related expenses, and contribute to general corporate purposes, ensuring overall operational growth and brand visibility.
The Newmalayalam Steel Limited IPO has caught the eyes of investors as the company reportedly saw an annual drop of 15.78% in its revenue and 28.91% yearly decline in the Profit After Tax (PAT), during the financial year ended March 31, 2024.
As of March 31, 2024, the key performance indicators reflect the company's financial health with a Return on Equity (RoE) at 10.55%, Return on Capital Employed (RoCE) at 17.60%, Return on Net-Worth (RoNW) stands at 10.55%, and the PAT Margin was 1.41. The Price to Book Value was 2.81. The company’s market capitalisation is ₹155.59 crore.
| Period Ended | September 30, 2024 | March 31, 2024 | March 31, 2023 | March 31, 2022 |
| Revenue | 15,533.82 | 30,314.80 | 35,995.71 | 32,360.91 |
| Assets | 11,032.77 | 11,208.19 | 8,734.83 | 9,001.66 |
| Net Worth | 4,566.44 | 4,047.14 | 3,620.28 | 3,019.79 |
| Profit After Tax | 519.30 | 426.86 | 600.49 | 673.06 |
| Reserves & Surplus | 3,301.68 | 2,782.38 | 2,355.52 | 1,755.03 |
| Total Borrowing | 3,917.94 | 5,911.15 | 2,815.22 | 4,920.06 |
Amount in ₹ crores
Newmalayalam Steel Limited benefits from a diversified product portfolio that spans polyester, cotton, and technical textiles, positioning it to serve a wide array of industries and reduce dependency on any single product category. Its strategically located manufacturing unit in Kerala, combined with modern infrastructure, ensures cost efficiency, scalability, and high-quality production. The company’s strong brand recognition under the "Demac Steel" name and a well-established distribution network, reaching multiple retailers, wholesalers, and distributors, bolsters its market presence. Additionally, long-standing relationships with key clients and suppliers have reinforced its competitive edge, ensuring reliable revenue streams. The company also emphasizes sustainability by investing in solar power generation, which not only reduces energy costs but also aligns with its focus on environmental responsibility.
With a robust financial position, a proven track record of quality assurance, and a committed management team, Newmalayalam Steel has positioned itself as a dependable player in the steel manufacturing sector. The company’s focus on innovation, process development, and product diversification helps mitigate the impact of demand fluctuations. Furthermore, the growing demand for galvanized products across industries such as construction and infrastructure provides an optimistic outlook for its future growth.
Despite its strengths, the company faces some significant challenges. The company’s revenue is still somewhat concentrated on a few key clients, which increases its vulnerability to any loss or reduction in business from these customers. Additionally, the steel manufacturing sector is highly competitive, with constant pressure on margins and raw material costs. Fluctuations in raw material prices, particularly for pre-galvanized coils, could directly impact production costs and profitability. Another challenge is the company’s reliance on its Kerala-based manufacturing unit, which exposes it to regional economic risks and operational disruptions.
The lack of long-term agreements with most clients leaves the company vulnerable to unpredictable demand and cancellations, which could affect its financial stability. Moreover, the company’s operations are subject to the cyclical nature of the steel industry, where fluctuations in steel prices and demand can adversely affect performance. Internal financial control weaknesses and the absence of exclusive contracts with customers could lead to uncertainties in future revenues. Lastly, the company's dependence on its Promoter Group entity, Jaihind Steel Private Limited, for revenue and raw material procurement creates additional risk if business disruptions occur within this relationship.
Becoming an early public investor in Newmalayalam Steel Limited offers a potential opportunity to benefit from the company’s growth in the steel sector. However, investors should thoroughly evaluate key aspects such as the company’s operational performance, financial stability, industry trends, and future growth plans. It’s essential to align the investment with personal financial goals and risk tolerance before committing. Reviewing the offer document carefully and seeking professional financial advice, if required, will help ensure a well-informed decision regarding participation in this IPO.
What is the Newmalayalam Steel IPO?
The Newmalayalam Steel Limited IPO is an NSE SME offering consisting of 46.40 lakh equity shares with a face value of ₹10, aiming to raise to ₹41.76 crore. The price band has been set between ₹85 to ₹90 per share, with a minimum order quantity of 1,600 shares. This IPO will be open for subscription from December 19, 2024, to December 23, 2024. Khandwala Securities Limited is the book-running lead manager, Kfin Technologies Limited is the registrar while Aftertrade Broking Private Limited is the market maker.
When will the Newmalayalam Steel IPO open?
The Newmalayalam Steel Limited IPO will open for subscription on December 19, 2024, and will close on December 23, 2024.
When is the Newmalayalam Steel IPO listing date?
The tentative listing date for the Newmalayalam Steel Limited IPO is Friday, December 27, 2024.
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