Aditya Ultra Steel IPO Review

Aditya Ultra Steel is engaged in the business of manufacturing of rolled steel product i.e. TMT bars under the Kamdhenu brand catering mainly to the construction industry and for infrastructure development. The Company manufactures TMT bars from billets through reheating furnace and rolling mill.

The Company is promoted by team of young and experienced entrepreneurs viz. Mr. Varun Manojkumar Jain, Mr. Sunny Sunil Singhi and Mrs. Varuna Jain having combined experience of more than 17 years in the Steel Industry with proven track records. 

Financially, Aditya Ultra Steel revenue increased from ₹51,598.34 Lakhs in FY22 to ₹53,048.91 Lakhs in FY23 and currently at ₹58,856.29 Lakhs in FY24. Similarly, EBITDA increased from ₹1,091.53 Lakhs in FY22 to ₹986.79 Lakhs in FY23 and currently at ₹1,801.39 Lakhs in FY24. The PAT also increased from ₹488.90 Lakhs in FY22 to ₹277.66 Lakhs in FY23 and currently at ₹792.34 Lakhs in FY24. This indicates a steady financial performance.

For the Aditya Ultra Steel IPO, the company is issuing shares at a pre-issue EPS of ₹4.62 and a post-issue EPS of ₹3.19. The pre-issue P/E ratio is 13.41x, while the post-issue P/E ratio is 19.43x against Industry P/E ratio is 20.61x. The company's ROCE for FY24 is 18.75% and ROE for FY24 is 23.92%. These metrics suggest that the IPO is fairly priced.

The Grey Market Premium (GMP) of Aditya Ultra Steel listing gains of 12% - 16%. Given the company's financial performance and the valuation of the IPO, we recommend Investors to Avoid to the Aditya Ultra Steel Limited IPO for Listing gain or long term investment purposes.