About Shree Hare-Krishna Sponge Iron Limited
BUSINESS OVERVIEW
Shree Hare-Krishna Sponge Iron is engaged in the manufacturing and sale of sponge iron, primarily used as a raw material in electric arc and induction furnaces for steel production. The company serves the metallic requirements of steel producers across selected geographies.
The sponge iron manufacturing facility is strategically located, ensuring access to key raw materials such as high-quality iron ore, iron ore pellets, coal, and dolomite. A by-product of this process is dolochar, a solid waste material.
In Fiscal 2025, the revenue from operations stood at ₹8,047 lakhs, with sponge iron contributing 95.67%, followed by iron ore fines (2.86%), dolochar (1.02%), and other scrap items (0.45%).
Operations for mild steel ingots, steel shots, grits, and other steel products have been halted since 2020 due to rising power costs, despite existing infrastructure and machinery. To address this, the company plans to install a captive power plant using IPO proceeds, aimed at resuming and sustaining operations.
The facility is equipped with modern technology, a testing laboratory, and handling equipment. A dedicated in-house laboratory assesses the chemical and physical properties of raw materials to ensure product quality and conformity with standards. The company currently markets its products in Maharashtra, Madhya Pradesh, and Chhattisgarh. As of April 30, 2025, the company employs 92 full time employees at various levels within the organization
INDUSTRY ANALYSIS
Industry Scenario – India’s Iron and Steel Sector
India’s iron and steel industry continues to witness significant growth, driven by rising domestic demand and government-backed infrastructure initiatives.
Iron ore production in FY23 reached 257.85 million tonnes (MT), marking an increase from 253.97 MT in FY22 and a sharp 23% rise from 205.04 MT in FY21. However, iron ore exports declined to US$1.75 billion in FY23, down from US$3.18 billion in FY22.
In terms of steel, crude steel production stood at 193.16 MT in FY23, while finished steel output was 89.55 MT. During FY24 (up to January 2024), crude and finished steel production reached 118 MT and 114 MT, respectively. In April 2024 alone, India produced 11.9 MT of crude steel and 11.2 MT of finished steel.
Steel Authority of India Limited (SAIL) achieved a record performance in FY23 with 18.29 MT of crude steel, a 5.3% growth over its previous best. In FY24, SAIL’s crude steel output rose to 19.23 MT, with 18.4 MT of saleable steel.
India, the world’s second-largest crude steel producer since 2019, is on a path of expanding its capacity. From 142.2 MT in FY20, steel production capacity is projected to reach 300 MT by 2030-31.
The National Steel Policy aims to boost per capita steel consumption to 160 kg by 2030-31, up from current levels, with a targeted increase in rural consumption from 19.6 kg to 38 kg per capita. This is expected to be supported by rapid industrial growth and infrastructure investments in sectors like railways, roads, and highways.
Sector-wise demand is also rising:
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Infrastructure sector steel consumption is projected to rise to 11% by FY26.
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Automotive demand is expected to grow, aided by the Vehicle Scrappage Policy, which promotes material recycling and cost efficiency.
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On the healthcare front, steel producers have increased output of oxygen cylinders for medical needs.
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Government initiatives such as the Smart Cities Mission, Affordable Housing, and Industrial Corridors continue to drive steel consumption.
Notably, the Pradhan Mantri Awas Yojana (Urban) alone is expected to consume about 158 lakh MT of steel for housing projects sanctioned under the scheme.
BUSINESS STRENGTHS
1. In-House Manufacturing Facility:
The manufacturing operations are carried out at a facility located in Siltara, Raipur, Chhattisgarh, spread over 13.45 acres with an annual production capacity of 30,000 metric tonnes. Strategically located near abundant local sources of coal, iron ore, and dolomite, the facility benefits from reduced logistics and procurement costs, supporting cost efficiency and scalability.
2. Stringent Quality Control:
A dedicated in-house testing laboratory ensures consistent product quality by evaluating the chemical and physical properties of key raw materials. The facility is equipped with precision instruments such as muffle furnaces, combustion furnaces, and hot air ovens to maintain quality throughout the manufacturing process. Sponge iron is produced with high metallic content and consistent characteristics, and products are moved via trucks to avoid re-oxidation. The company holds ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018 certifications, underscoring its commitment to quality, environment, and safety standards.
3. Strong Customer Relationships:
Sponge iron is supplied to steel manufacturers in Maharashtra, Chhattisgarh, and Madhya Pradesh. Although long-term contracts are not in place, the company has built longstanding client relationships, ensuring repeat business and consistent demand, which provides a competitive edge in acquiring new customers.
4. Experienced Management Team:
The company is led by Promoter Mr. Manoj Parasrampuria, who has extensive experience in the steel industry, supported by a skilled technical and commercial team. The management’s expertise helps address industry challenges, formulate business strategies, and capitalize on market opportunities, contributing to the company's sustained growth and operational effectiveness
BUSINESS STRATEGIES
1. Investment in Green Energy Infrastructure:
The company plans to establish a 5MW captive power plant at its Siltara, Raipur facility, powered entirely by green energy. The plant will utilize hot gases from kiln operations and solid waste from the DRI plant, along with rice husk as boiler fuel. This initiative aims to reduce power costs, ensure uninterrupted energy supply, and minimize environmental impact by repurposing emissions and reducing waste.
2. Commitment to Quality and Brand Enhancement:
Focus remains on maintaining high product and service quality while optimizing costs. Continuous process evaluation and technological upgradation are central to delivering consistent customer satisfaction and building a strong brand image through repeat business.
3. Operational Efficiency and Cost Control:
Efforts are directed towards scaling operations and enhancing productivity, which will contribute to higher output, reduced fixed costs, and improved profit margins. Achieving economies of scale is targeted to strengthen procurement negotiations and overall cost competitiveness.
4. Focus on Product Quality Compliance:
Strict adherence to product quality standards is maintained through ongoing quality reviews and timely corrective measures, ensuring regulatory compliance and long-term customer trust.
5. Strong Stakeholder Relationships:
The company emphasizes mutually beneficial relationships with suppliers, customers, and employees. Efficient product delivery and collaborative partnerships are recognized as key drivers of supply chain performance, cost efficiency, and sustainable business growth
BUSINESS RISK FACTORS & CONCERNS
1. Dependence on Power and Fuel Costs:
The viability of steel product operations is highly dependent on power and fuel costs. Historical volatility in energy prices led to the shutdown of steel ingots and related product manufacturing since 2020, despite having infrastructure in place. A captive green energy power plant is proposed to stabilize energy supply and reduce cost unpredictability.
2. Raw Material Price and Supply Volatility:
Sponge iron production relies heavily on iron ore and coal, with raw material costs forming over 74–77% of operational revenue in FY23–FY25. The business is dependent on a limited number of suppliers, and any disruption or price volatility may adversely affect operations and profitability.
3. Geographic Concentration Risk:
Sales are primarily concentrated in Maharashtra, Madhya Pradesh, and Chhattisgarh. This regional dependency increases exposure to local economic, competitive, and demographic changes, which could negatively affect business performance.
4. Revenue Dependency on Sponge Iron Segment:
The company’s revenue is largely reliant on sponge iron, accounting for over 95% of revenue in the past three financial years. Any decline in demand, increased competition, technological shifts, or regulatory changes in this segment could severely impact revenue and growth.
5. Exposure to Steel Industry Cycles:
The business is closely tied to the steel sector, as sponge iron is primarily used in electric arc and induction furnaces. Any downturn in the steel market, driven by factors like raw material costs, import/export dynamics, global capacity, and economic shifts, could result in lower product demand, affecting overall financial health.
Shree Hare-Krishna Sponge Iron faces key risks related to energy cost volatility, raw material dependency, geographic concentration, segment reliance, and the cyclical nature of the steel industry. These factors may impact operational continuity, revenue stability, and future growth prospects.
