Newmalayalam Steel, a fast-growing player in the construction materials sector in Kerala, is preparing for its IPO (Initial Public Offering), aiming to raise ₹41.76 Crores. The fresh issue of 46.4 lakh shares will be offered at a price band of ₹85 to ₹90 per share. The subscription period for the Newmalayalam Steel IPO opens on December 19, 2024, and closes on December 23, 2024. The allotment date is set for December 24, 2024, and the shares are expected to list on the NSE SME on December 27, 2024.

The market capitalization of Newmalayalam Steel at the upper end of the price band will be approximately ₹155.59 Crores. The lot size for the IPO is 1,600 shares, requiring a minimum investment of ₹1,44,000 for retail investors. High-Net-Worth Individuals (HNIs) are required to invest in 2 lots (3,200 shares), totaling ₹2,88,000.

Newmalayalam Steel IPO Subscription Status

As of December 20, 2024, the Newmalayalam Steel IPO has been subscribed 5.45 times on the second day of its subscription period. This shows strong demand for the shares, reflecting investor confidence in the company's growth prospects.

Grey Market Premium (GMP) and Expected Listing Price

The Grey Market Premium (GMP) for the Newmalayalam Steel IPO stands at ₹14, which indicates an expected listing gain of 15.23%. Given this GMP, the shares could list at around ₹95, based on current market expectations. However, investors should exercise caution when considering GMP, as it is unregulated and based on informal market trading.

Newmalayalam Steel IPO Allotment Process

The allotment date for the Newmalayalam Steel IPO is December 24, 2024. To check the allotment status, follow these steps:

1. Go to the IPO allotment status page.
2. Select Newmalayalam Steel IPO from the dropdown list.
3. Enter your application number, PAN, or DP Client ID.
4. Submit the details to check your allotment status.

Objectives of the Newmalayalam Steel IPO

The proceeds from the Newmalayalam Steel IPO will be utilized for several key initiatives:

1. IT/Technological Upgradation: ₹287.62 lakh for enhancing the existing manufacturing facility.
2. Expansion of Solar Facility: ₹234.33 lakh for expanding the solar power generation facility.
3. Factory Expansion: ₹255.95 lakh for civil construction of a new factory shed and storage facility in Kerala.
4. Marketing and Brand Building: ₹505.55 lakh for advertising and brand development.
5. Working Capital: ₹1,420.00 lakh for financing incremental working capital needs.
6. General Corporate Purposes: Remaining funds will be used for general corporate requirements.

Financial Performance and Valuation Metrics

For the period ending September 30, 2024, Newmalayalam Steel reported revenues of ₹15,533.82 lakh and an EBITDA of ₹958.34 lakh. The Profit after Tax (PAT) for the period was a loss of ₹519.30 lakh.

The pre-issue EPS stands at ₹3.38, and the post-issue EPS is ₹2.50. The P/E ratio for the IPO is 25.63x (pre-issue) and 35.96x (post-issue), compared to the industry P/E ratio of 39x. With a ROCE of 17.60% and RoE of 10.55% for FY24, the IPO is priced fairly relative to its industry peers.

IPO Review and Recommendation

Newmalayalam Steel operates as one of the top galvanized steel pipe manufacturers in Kerala, catering to the growing construction sector. While the company has strong financials and an established market presence, it faces challenges due to its recent loss and relatively high P/E ratio compared to industry norms.

The Grey Market Premium (GMP) of ₹14 suggests potential listing gains of around 15.23%. However, given the financial performance and the valuation, we recommend avoiding the IPO for listing gains. For long-term investors, the company's growth prospects in the construction materials sector and its investment in renewable energy make it worth considering for future growth.

The Upcoming IPOs in this week and coming weeks are Solar91 Cleantech, Unimech Aerospace, Anya Polytech, Rosmerta Digital, Indo Farm, and Avanse Financial. The Current active IPO is Ventive Hospitality, Senores Pharmaceuticals, Carraro India, Transrail Lighting, Mamata Machinery, DAM Capital, Sanathan Textiles, Concord Enviro and Newmalayan Steel. For more details on upcoming IPOs, you can visit our page at  and stay updated with the latest news on IPO updates on . Join our  for regular Stock Market Trading and Investment Calls by  - SEBI Registered Research Analyst &  for Regular Share Market, News & IPO Updates. Start your Stock Market Journey and Apply in IPO by opening a Free Demat Account in .Best IPO to Apply Now - IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News, Live IPO GMP Today - Finance SaathiTop News Headlines - Share Market News, Latest IPO News, Business News, Economy News - Finance SaathiTrading with CA Abhay Telegram ChannelCA Abhay VarnFinance Saathi Telegram ChannelChoice Broking FinX