Abha Power and Steel Limited, a Chhattisgarh-based manufacturer of iron and steel products, has debuted on the NSE SME platform with a premium of 9.2%, marking a strong listing.

Listing Performance

• Issue Price: ₹75 per share
• Listing Price: ₹81.90 per share
• Premium: 9.2%

This reflects the market's confidence in the company despite a lower-than-expected premium, as the grey market premium (GMP) prior to listing suggested a 20% premium.

IPO Details

The company's IPO, which opened from November 27 to November 29, raised ₹38.54 crore through a combination of:

1. Fresh Issue: 41.39 lakh shares worth ₹31.04 crore.
2. Offer-for-Sale (OFS): 10 lakh shares worth ₹7.5 crore.

The issue was priced at ₹75 per share, aiming to fund modernization and expansion initiatives.

Utilization of Funds

Abha Power and Steel plans to deploy the proceeds from the IPO toward the following:

• Modernization and Upgradation: Enhance manufacturing facilities in Bilaspur, ensuring operational efficiency and product diversity.
• Working Capital Requirements: To support the company's growing operations and maintain liquidity.
• General Corporate Purposes: To ensure smooth functioning and meet strategic needs.

Industry and Market Context

Abha Power operates in a competitive iron and steel manufacturing sector. Its modernization drive aligns with the increasing demand for high-quality steel products in domestic and international markets.

The successful listing highlights investor confidence in the company’s growth potential, though the modest premium suggests that broader market conditions or valuation concerns may have tempered enthusiasm.

Conclusion

The listing of Abha Power and Steel Limited at a premium of 9.2% showcases the strength of its business model and growth outlook. While the debut was below grey market expectations, the funds raised will be instrumental in driving modernization and scaling operations, paving the way for sustained growth in a competitive industry.

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