Shree Hare-Krishna Sponge Iron Limited, a manufacturer of sponge iron used as a primary input in steelmaking, successfully closed its ₹29.13 crore SME IPO on June 26, 2025, receiving healthy subscription from investors across categories. Despite the strong 6.43x overall subscription, the Grey Market Premium (GMP) remains at ₹0, suggesting no immediate listing gains for IPO applicants.

About the Company: Shree Hare-Krishna Sponge Iron

Founded with a focus on the manufacturing and sale of sponge iron, Shree Hare-Krishna Sponge Iron caters to the metallic needs of steel producers, particularly electric arc and induction furnace operators. Sponge iron is considered a cost-effective alternative to scrap steel and is crucial in secondary steel production in India.

The company operates in select regional markets, supplying sponge iron as a raw material for steel production, making it an integral part of the steelmaking ecosystem. Their consistent product quality, industry experience, and operational scale give them a competitive edge in a raw-material-driven segment.

IPO Structure and Investment Details

The IPO is entirely a fresh issue of 50.70 lakh shares, raising a total of ₹29.13 crore at the upper band of ₹59 per equity share. The purpose of the fresh issue is to meet working capital needs and for general corporate purposes.

IPO Details:

• Price Band: ₹56 – ₹59

• IPO Size: ₹29.13 crore

• Lot Size: 2,000 shares

• Minimum Investment (Retail): ₹1,18,000

• Minimum Investment (HNI): ₹2,36,000

• Market Capitalisation at IPO Price: ₹113.22 crore

• Book Running Lead Manager: HEM Securities Limited

• Registrar: KFIN Technologies Limited

• Market Maker: Hem Finlease Private Limited

• Listing Exchange: NSE SME

• IPO Allotment Date: June 27, 2025

• Tentative Listing Date: July 1, 2025

IPO Subscription Status

The IPO witnessed decent investor interest, especially from Qualified Institutional Buyers (QIBs) and retail investors.

As of 7:00 PM on June 26, 2025, the overall subscription stood at 6.43 times.

This subscription level indicates a moderate-to-strong appetite, suggesting that investors saw value in the company’s business model, despite no significant grey market interest.

Anchor Investor Participation

Prior to the main subscription window, the company raised ₹8.49 crore from anchor investors, allotting 14.40 lakh equity shares at the upper end of the price band (₹59). The anchor round participation suggests some institutional backing and confidence in the company’s fundamentals.

Grey Market Premium (GMP): No Momentum Observed

As of June 19, 2025, the GMP for Shree Hare-Krishna Sponge Iron IPO stands at ₹0, indicating no premium over the issue price. This trend has remained unchanged and hints at a flat listing.

⚠️ Investors should note: GMP is an unofficial indicator and varies with market sentiment. However, a consistent ₹0 GMP before listing often implies that the market expects no immediate gain post-listing.

Financial Highlights: Consistency in Numbers

While revenue has shown minor fluctuations, the company maintains a solid EBITDA and PAT over the last three years.

Revenue from Operations:

• FY23: ₹9,524.95 lakh

• FY24: ₹8,493.13 lakh

• FY25: ₹8,360.02 lakh

EBITDA:

• FY23: ₹1,507.96 lakh

• FY24: ₹1,491.03 lakh

• FY25: ₹1,399.48 lakh

Profit After Tax (PAT):

• FY23: ₹1,052.23 lakh

• FY24: ₹1,017.44 lakh

• FY25: ₹919.80 lakh

While revenues and profits have slightly declined, the margins remain stable, showcasing a business that has navigated commodity price volatility well.

Valuation and Key Financial Ratios

The company appears reasonably valued compared to peers, but not significantly undervalued to prompt listing gains.

Key Financial Metrics:

• Pre-Issue EPS (FY24): ₹6.51

• Post-Issue EPS (FY24): ₹4.79

• Pre-Issue P/E Ratio: 9.06x

• Post-Issue P/E Ratio: 12.31x

• Industry P/E Benchmark: 24x

• ROCE (FY24): 14.70%

• ROE (FY24): 13.33%

• RoNW: 12.51%

These ratios indicate that the company is fairly priced in relation to industry averages, offering value for long-term holders, but limited scope for immediate upside.

How to Check IPO Allotment Status

Investors looking to know if they received shares can follow these steps after June 27, 2025, through the KFIN Technologies IPO portal.

Steps to Check:

1. Visit the KFIN Technologies IPO allotment page

2. Select Shree Hare-Krishna Sponge Iron IPO from the dropdown

3. Enter either:

   • PAN number

   • Application number

   • Demat/DP ID

4. Submit details and view allotment status

Use of IPO Proceeds

The company has outlined the following objectives for using the net proceeds:

• Meeting Working Capital Requirements

• General Corporate Purposes

• Strengthening operational efficiency and market reach

The capital is not being used for debt repayment or asset expansion, which makes this issue more operationally focused.

Should You Invest? Final Verdict

Despite decent financials and fair valuations, the lack of grey market activity, flat GMP, and slight decline in top-line revenue may lead to no immediate listing pop.

✔️ Investors may consider:

• Holding for long-term returns

• Taking a bet on value stability in cyclical steel input market

• Post-listing accumulation if price dips and fundamentals remain intact

❌ Avoid for listing gains:

• Flat GMP

• High ticket size for retail investors

• Limited visibility of demand beyond anchor round

Conclusion: Avoid for Short-Term, Watch for Long-Term Entry

While the IPO has closed successfully, and anchor participation signals some confidence, the zero GMP and non-growing revenue trend urge caution. The sponge iron business, though essential, is cyclical and driven by steel sector dynamics.

Investors looking for short-term gains should avoid this IPO, while long-term investors may consider it after observing post-listing price movements and market response.

The Upcoming IPOs in this week and coming weeks are Crizac, Silky Overseas, Vandan Foods, Pushpa Jewellers, Cedaar Textile, Marc Loire Fashions.

The Current active IPO are Neetu Yoshi, Adcounty Media India, Moving Media Entertainment, Valencia India, PRO FX Tech, Ace Alpha Tech, Indogulf Cropsciences, Suntech Infra Solutions, Rama Telecom, Supertech EV, Sambhav Steel Tubes, HDB Financials.

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