Shree Hare-Krishna Sponge Iron Limited, a Gujarat-based company engaged in manufacturing of sponge iron (direct reduced iron or DRI), is set to launch its Initial Public Offering (IPO) on the NSE SME platform. The IPO will open for subscription on June 26, 2025, and close on June 28, 2025.

The company aims to raise ₹43.30 crore through a fresh issue of 49.2 lakh equity shares, with no offer for sale (OFS) component.

IPO Details

• IPO Opening Date: June 26, 2025

• IPO Closing Date: June 28, 2025

• Price Band: ₹85 – ₹88 per share

• Face Value: ₹10 per share

• Issue Size: ₹43.30 crore (fresh issue only)

• Lot Size: 1,600 shares

• Retail Investment Minimum: ₹1,40,800

• Listing Exchange: NSE SME

• Tentative Listing Date: July 3, 2025

• Registrar: Bigshare Services Pvt Ltd

• Lead Manager: Beeline Capital Advisors Pvt Ltd

• Market Maker: Spread X Securities Pvt Ltd

About the Company

Established in 2005, Shree Hare-Krishna Sponge Iron Limited is engaged in the production of sponge iron using coal-based DRI technology. Sponge iron is a critical raw material used in the manufacturing of steel through electric arc furnaces and induction furnaces.

The company operates a manufacturing plant in Gandhidham, Kutch (Gujarat) with an annual capacity of 72,000 metric tonnes.

Management Team

• Mr. Bhikhubhai Kanjibhai Gol, Chairman and Managing Director, has more than 20 years of experience in the iron and steel industry.

• The company is run by a promoter-driven leadership with in-depth knowledge of operations and regional market dynamics.

Financial Performance

• Pre-Issue EPS (FY24): ₹5.28

• Post-Issue EPS: ₹3.46

• P/E Ratio: ~25.43x (post-issue at ₹88)

• Industry P/E Average: ~17x–20x

• ROE (FY24): 18.65%

• ROCE (FY24): 20.54%

• RoNW (FY24): 18.65%

Use of IPO Proceeds

• Capital expenditure for plant upgrades and capacity enhancement

• Working capital requirements

• General corporate purposes

Strengths

• Consistent revenue and profit growth over last three fiscal years

• Located in an industrial hub (Gandhidham) close to ports and raw material sources

• Debt-light structure with improving return ratios

• Growing demand in domestic infrastructure driving sponge iron demand

Risks

• Highly commoditised product, sensitive to iron ore and coal price fluctuations

• Dependent on a single manufacturing facility

• Low PAT margins (below 4%) make earnings volatile

• Competitive industry with cyclical pricing dynamics

GMP & Listing Expectations

• GMP (as of June 19): ₹4–₹6 per share

• Expected listing premium: 4.5%–6.8%

• GMP is unofficial and volatile; should not be the sole basis for investment

Verdict

While the IPO is priced on the higher side of valuation compared to industry P/E, the consistent financial performance, strategic location, and stable growth outlook support the case for long-term investment.

Investors should apply only if they can withstand commodity-sector risks and are seeking longer-term exposure to India’s steel value chain.

Disclaimer:
This article is for educational and informational purposes only and does not constitute financial advice. Investment decisions should be based on individual risk tolerance and consultation with SEBI-registered advisors. Market conditions are volatile and subject to change. Neither the author nor the platform is responsible for losses arising from use of this information.

The Upcoming IPOs in this week and coming weeks are Suntech Infra Solutions, Shri Hare-Krishna Sponge Iron, Icon Facilitators, Ace Alpha Tech, Aakaar Medical Technologies, Safe Enterprises Retail Fixtures, Globe Civil Projects, Sambhav Steel Tubes, Ellenbarrie Indutrial Gases, Kalpataru, HDB Financials, AJC Jewel, Mayasheel Ventures.

The Current active IPO are  ArisInfra Solutions, Influx Healthtech, Eppeltone Engineers.

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