Shree Hare-Krishna Sponge Iron Limited, engaged in the manufacturing and sale of sponge iron, opened its initial public offering (IPO) on June 24, 2025, and will close it on June 26, 2025. The company aims to raise ₹29.13 crores via a Book Built Issue that consists entirely of a fresh issue of 50.70 lakh equity shares.

The IPO is priced in the band of ₹56 to ₹59 per share, with a projected market capitalisation of ₹113.22 crores at the upper end. The lot size is 2,000 shares, requiring a minimum investment of ₹1,18,000 from retail investors and ₹2,36,000 for HNIs applying for 2 lots.

The issue is being managed by HEM SECURITIES LIMITED as the book-running lead manager, with KFIN TECHNOLOGIES LIMITED as the registrar, and Hem Finlease Private Limited as the market maker.

Company Overview

Shree Hare-Krishna Sponge Iron Limited is primarily involved in the manufacturing and sale of sponge iron, a critical raw material for steel production in electric arc and induction furnaces. The company caters to the metallic requirements of steel producers in select geographies, offering high-quality sponge iron crucial for secondary steel manufacturing.

The promoter group includes Mr. Manoj Parasrampuria, with over 36 years of industry experience, Mr. Anubhav Parsrampuria with 7 years, and Mr. Manish Parasrampuria with over 32 years in the steel sector, showcasing deep-rooted sectoral expertise and operational leadership.

Grey Market Premium (GMP) Analysis

As of June 19, 2025, the Grey Market Premium (GMP) for Shree Hare-Krishna Sponge Iron IPO stands at ₹0, reflecting zero premium expectations in the unregulated market.

With no GMP activity, the IPO appears to be lacking speculative demand, suggesting muted listing day interest.

IPO Subscription Status

As of 11:00 AM on June 24, 2025, the IPO had been subscribed only 0.69 times, pointing to a slow start to the three-day offering. This reflects moderate retail and institutional participation, often seen in commodity-based businesses with cyclical revenues.

Anchor Investment

On the institutional front, ₹8.49 crores were raised via Anchor Investors at the upper band of ₹59 per share, with 14,40,000 equity shares allocated. This shows a modest level of institutional confidence, though not robust enough to trigger high retail momentum.

Company Financials

Despite tepid market response, the company boasts stable financials across recent fiscal years:

• Revenue from Operations:

  • FY2023: ₹9,524.95 lakh

  • FY2024: ₹8,493.13 lakh

  • FY2025: ₹8,360.02 lakh

• EBITDA:

  • FY2023: ₹1,507.96 lakh

  • FY2024: ₹1,491.03 lakh

  • FY2025: ₹1,399.48 lakh

• Profit After Tax (PAT):

  • FY2023: ₹1,052.23 lakh

  • FY2024: ₹1,017.44 lakh

  • FY2025: ₹919.80 lakh

While revenues and profits have slightly declined year-over-year, the company has remained consistently profitable, which is a strong point given the volatile nature of the steel sector.

Valuation Analysis

The IPO pricing suggests the issue is moderately valued:

• Pre-issue EPS: ₹6.51

• Post-issue EPS: ₹4.79

• Pre-issue P/E Ratio: 9.06x

• Post-issue P/E Ratio: 12.31x

• Industry P/E Benchmark: 24x

• ROCE: 14.70%

• ROE: 13.33%

• RoNW: 12.51%

Compared to its industry peers, Shree Hare-Krishna Sponge Iron’s IPO is not overpriced, but neither is it undervalued enough to generate strong retail or speculative interest. The post-issue P/E is roughly half the industry average, but this discount may be attributed to sectoral risk and limited scale.

IPO Objectives

The net proceeds of the issue are primarily intended for:

1. ₹2,300.00 lakhs towards setting up a Captive Power Plant at Siltara, Raipur, to support production efficiency

2. General corporate purposes to strengthen the company’s operational capabilities

This capital expenditure reflects a forward-looking investment, aimed at improving energy cost efficiency and production continuity, a key driver in sponge iron manufacturing.

Allotment and Listing Schedule

• Allotment Finalization: Friday, June 27, 2025

• Tentative Listing Date: Tuesday, July 01, 2025

• Listing Exchange: NSE SME

Investors can check their allotment status on the KFIN TECHNOLOGIES LIMITED website using any of the following:

• Application Number

• PAN

• DP Client ID

Analyst Verdict

Despite reasonable valuation and a sectoral niche, Shree Hare-Krishna Sponge Iron IPO is currently witnessing lukewarm market reception. The absence of Grey Market Premium (GMP) and below-par subscription rates suggest no momentum in the IPO for short-term listing gains.

The steady but flat revenue performance, in combination with moderate returns on capital, positions the company as a stable business, but without compelling upside for listing-based investors.

Conclusion

The Shree Hare-Krishna Sponge Iron IPO offers exposure to India’s core manufacturing sector, particularly in the steel and metal value chain. However, the current market sentiment, lack of GMP, and limited investor enthusiasm raise red flags for those targeting listing-day profits.

Recommendation:
For those looking at short-term gains, this IPO does not present a favorable risk-reward ratio. Long-term investors may monitor listing performance and consider secondary market entry if valuations remain attractive.

Disclaimer:
This article is for informational purposes only and does not constitute investment advice. Readers should consult a certified financial advisor before investing. All market investments are subject to risks, and past performance is not indicative of future results.

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