About Abha Power and Steel Limited

Strategically located in mineral reach, densely industrialized and one of the steel hubs of central India i.e. state of Chhattisgarh, Abha Power and Steel are engaged in the business of iron and steel foundry, more particularly in the business of casting and manufacturing customised products in mostly all grades of iron and steel. Their versatile product portfolio covers all grades of mild steel, spheroidal graphite cast iron, manganese steel, stainless steel, low alloy and high alloy castings (high CR & high Ni), HRCS & WRCS, from as small as 0.5 Kgs to 6 Tonnes single finished casting. They are a RDSO certified vendor for supply of certain casting products to Indian Railways and an approved vendor for supply of certain casting products to National Mineral Development Corporation and Integral Coach Factory, Chennai. They are also holding a PED Certificate from TUV-Nord which certifies their quality management system for manufacturing of castings and makes them eligible for supply of pressure equipment to European nations. 

The Company had a diverse product portfolio of over 1000+ product supplemented by their ability to make customised products, demonstrates their capability as an emerging supplier for a diverse range of products and positions them as a strategic and preferred supplier. With around 20 years of experience, in understanding customer specific requirements, and have a strong focus on quality, safety, value proposition, and the price competitiveness of their offerings. The Company sell its products to domestic customers and also export them to over 6 countries, such as UAE, Germany, Canada, Italy and Netherlands.

As on April 30, 2024, the Company had workforce of 65 employees including senior management. The Bankers of the Abha Power and Steel are ICICI Bank Limited.

The Steel and Iron Industry
One of the primary forces behind industrialization has been the use of metals. Steel has traditionally occupied a top spot among metals. Steel production and consumption are frequently seen as measures of a country's economic development because it is both a raw material and an intermediary product. Therefore, it would not be an exaggeration to argue that the steel sector has always been at the forefront of industrial progress and that it is the foundation of any economy. In the past 10–12 years, India's steel sector has expanded significantly. Production has increased by 75% since 2008, while domestic steel demand has increased by almost 80%. The capacity for producing steel has grown concurrently, and the rise has been largely organic.

India is the world’s second-largest producer of crude steel, with an output of 125.32 MT of crude steel and finished steel production of 121.29 MT in FY23. India’s steel production is estimated to grow 4-7% to 123-127 MT in FY24. In FY24 (until November 2023), the production of crude steel and finished steel stood at 94.01 MT and 88.81 MT respectively. In FY24 (until November 2023), the consumption of finished steel stood at 86.97 MT. The per-capita consumption of steel stood at 86.7 kgs in FY23.

In FY23, exports and imports of finished steel stood at 6.7 MT and 6.02 MT, respectively. In November 2023 exports of finished steel stood at 2.34 lakh metric tonnes (LMT), while imports stood at 7.82 LMT. In FY24 (until November 2023), the exports and imports of finished steel stood at 4.03 MT and 4.25 MT, respectively.

The annual production of steel is anticipated to exceed 300 million tonnes by 2030-31. By 2030-31, crude steel production is projected to reach 255 million tonnes at 85% capacity utilisation achieving 230 million tonnes of finished steel production, assuming a 10% yield loss or a 90% conversion ratio for the conversion of raw steel to finished steel. With net exports of 24 million tonnes, consumption is expected to reach 206 million tonnes by the years 2030–1931. As a result, it is anticipated that per-person steel consumption will grow to 160 kg.

The steel industry has emerged as a major focus area given the dependence of a diverse range of sectors on its output as India works to become a manufacturing powerhouse through policy initiatives like Make in India. With the industry accounting for about 2% of the nation's GDP, India ranks as the world's second-largest producer of steel and is poised to overtake China as the world's second-largest consumer of steel. Both the industry and the nation's export manufacturing capacity have the potential to help India regain its favourable steel trade balance.

The National Steel Policy, 2017 envisage 300 million tonnes of production capacity by 2030-31. The per capita consumption of steel has increased from 57.6 kgs to 74.1 kgs during the last five years. The government has a fixed objective of increasing rural consumption of steel from the current 19.6 kg/per capita to 38 kg/per capita by 2030-31. As per Indian Steel Association (ISA), steel demand will grow by 7.2% in 2019-20 and 2020-21.

Huge scope for growth is offered by India's comparatively low per capita steel consumption and the expected rise in consumption due to increased infrastructure construction and the thriving automobile and railways sectors.

THE FOUNDRY INDUSTRY IN INDIA
The forging industry is a key link between critical manufacturing segments--metal suppliers (both ferrous and nonferrous) and end user industries. Forging units are usually classified basis the installed capacity of the forging unit. Over the years, the Indian forging industry has evolved from being a labour-intensive industry to capitalintensive manufacturing sector.

Small and medium scale foundry industry is a vital part in the Indian industries and would keep on playing an important part in the Indian economy later on. It has been watched that a many of the small-scale industry in this area today, are not intrigued with innovative upgrades and their quality, effectiveness and because of this benefit have really declined throughout the years. Globally, numerous new organizations are coming into the field and the competition is currently expanding rivalry from bigger units. To stay in the market the units thus, need to embrace more up to date and innovative ways to deal with update their technological capacities and hence stay focused. The small-scale units, in any case, have constrained limit and assets to put resources into the innovative capacity improvement. The contextual analyses in the small-scale areas easily demonstrate the advantages of vitality effective process.

The Indian foundry industry manufacturers metal cast components for applications in Auto, Tractor, Railways, Machine tools, Sanitary, Pipe Fittings, Defence, Aerospace, Earth Moving, Textile, Cement, Electrical, Power machinery, Pumps / Valves, Wind turbine generators etc. However, Grey iron castings have the major share i.e. approx. 68% of total castings produced. 

India is 2nd largest producer of castings in the world and has ambitious growth plans with new capacities being added at rapid pace. The Indian Foundry Industry is producing estimated 12 million MT of various grades of Castings as per International standards. There are approx. 4500 units out of which 85% can be classified as smallscale units & 10% as medium & 5% as large-scale units. Foundry Industry has a turnover of approx. USD 20 billion with exports approx. USD 3.54 billion. India's casting industry expected to reach USD 25 billion by 2025. The Indian forging Industry is second in total quantity to China who produces 11 million tonnes that occupies 39 per cent of the market. The China plus one factor and the spiralling energy costs in Europe have enhanced the prospects for Indian players and in the next three years the industry’s capacity is expected to increase to 3.5-4 million tonnes.

It can be concluded that the foundry business in India is an essential contributor to the economy of the nation. This sector is responsible for the employment of millions of people and the production of castings of superior quality at more affordable prices. With the assistance of the government, the sector has been able to compete successfully on a worldwide scale thanks to its ongoing efforts to modernize and innovate on a consistent basis. Because of the growing demand from a variety of industries and the widespread use of technologies that are cleaner and more environmentally friendly, the industry has the potential for continuing development and innovation. 

ABHA POWER AND STEEL LIMITED COMPETITIVE STRENGTHS
1. Diversified product mix with strong focus on customised products
2. Fully equipped manufacturing facility
3. Strategically located Manufacturing Facility
4. Captive Power plant
5. Diversified customer base and long-standing relationship with their customers.
6. Quality assurance and accreditations
7. Well experienced management team with proven project management and implementation skills
8. Healthy Growth in profitability 

ABHA POWER AND STEEL LIMITED ATRATEGIES
1. Upgradation of existing manufacturing facility
2. Continue to focus on improving operational efficiencies
3. Expand their customer base and geographic reach
4. Focus on Advanced Technology Products
5. Increasing operational efficiency
6. Strengthen their marketing network
7. Value proposition for consumers

ABHA POWER AND STEEL RISK FACTORS & CONCERNS
1. Their Manufacturing Facility is located in Bilaspur, Chhattisgarh and they are dependent upon local suppliers for the procurement of their raw materials.
2. The revenue is majorly concentrated from the State of Madhya Pradesh and Chhattisgarh.
3. Their  ability to access capital at attractive costs depends on their credit ratings.
4. Stringent environmental, health and safety laws and regulations or stringent enforcement of existing environmental, health and safety laws and regulations may result in increased liabilities and increased capital expenditures.
5. They may be affected by competition law, the adverse application or interpretation of which could adversely affect their business.
6. They are subject to operational risks on account of obsolescence, destruction, breakdown of their equipment or failure to repair or maintain such equipment.