VRAJ IRON AND STEEL IPO Review

VRAJ IRON AND STEEL LIMITED (formerly known as Phil Ispat Pvt. Ltd.) is one of the leading Iron and steel manufacturers of Central India. Vraj Iron And Steel Limited has currently two manufacturing units at Raipur and Bilaspur in Chhattisgarh.

The Company is backed by strong and professional Promoters named, VIJAY ANAND JHANWAR and KUSUM LATA MAHESHWARI, in which Vijay Anand Jhanwar has approximately 22 years of experience in the iron and steel industry.

Financially, Vraj Iron revenue increased from ₹2,909.32 Millions in FY21 to ₹4,143.84 Millions in FY22 and further increased at ₹5,174.21 Millions in FY23 and currently at ₹3,048.08 Millions in 9MFY24. Similarly, EBITDA increased from ₹291.00 Millions in FY21 to ₹496.61 Millions in FY22 and further ₹813.14 Millions in FY23 and currently at ₹651.04 Millions in 9MFY24. The PAT increased from ₹109.85 Millions in FY21 to ₹287.04 Million in FY22 and further increased ₹539.97 Millions in FY23 and currently at ₹445.80 Millions in 9MFY24. This indicates a steady growth in financial performance.

For the Vraj Iron IPO, the company is issuing shares at a pre-issue EPS of ₹21.84 and a post-issue EPS of ₹16.37. The pre-issue P/E ratio is 9.47x, while the post-issue P/E ratio is 12.64x against the industry P/E ratio of 19.2x. The company's ROCE for 9MFY24 is 25.34%, and ROE for 9MFY24 is 23.78%. These metrics suggest that the IPO is fairly priced.

The Grey Market Premium (GMP) of Vraj Iron and Steel indicates potential listing gains of 45% - 50%. Given the company's financial performance and the valuation of the IPO, we recommend Investors to apply to the IPO for listing gains or long term Investment purposes.