In a welcome development for small investors and market participants tracking SME listings, Shree Hare-Krishna Sponge Iron made its debut on NSE SME platform on July 1, 2025, listing at ₹65 per share, marking a 10% premium over its upper IPO price band of ₹59. The listing performance of Shree Hare-Krishna Sponge Iron shares has brought attention back to the SME segment, which has witnessed mixed investor sentiment in recent weeks.

The initial public offering (IPO) of Shree Hare-Krishna Sponge Iron was a book-built issue of ₹29.13 crore, consisting entirely of a fresh issue of 50.70 lakh equity shares. The price band was set between ₹56 to ₹59, with a minimum investment requirement of ₹1,18,000 for retail investors (one lot of 2,000 shares) and ₹2,36,000 for high-net-worth individuals (HNIs) for two lots.

Despite the grey market premium (GMP) showing no trading interest prior to listing, the stock's strong debut indicated substantial backing from anchor investors and retail demand. On June 26, 2025, at the close of the subscription period, the IPO was subscribed 6.43 times, showing notable investor interest. Notably, ₹8.49 crore was raised from anchor investors at ₹59 per share, with 14.40 lakh shares allotted, adding further credibility to the offer.

The market capitalisation at the IPO price stood at ₹113.22 crore, and HEM Securities Limited acted as the book-running lead manager, with KFin Technologies Limited functioning as the registrar and Hem Finlease Private Limited appointed as the market maker.

Company Overview

Shree Hare-Krishna Sponge Iron Limited, based in Siltara, Raipur, Chhattisgarh, is primarily engaged in the manufacturing and sale of sponge iron, a crucial raw material used in electric arc and induction furnaces for steel production. The company caters to steel producers in Maharashtra, Madhya Pradesh, and Chhattisgarh, addressing their metallic requirements through its consistent supply of high-quality sponge iron.

The company operates a 13.45-acre manufacturing facility with an annual production capacity of 30,000 metric tonnes. The location is strategically chosen for its proximity to abundant local raw materials such as iron ore, pellets, coal, and dolomite, ensuring low procurement and logistics costs.

Financial Performance and Business Operations

In Fiscal Year 2025, Shree Hare-Krishna Sponge Iron reported a revenue of ₹8,047 lakh, with sponge iron contributing 95.67% to the topline. The rest came from iron ore fines (2.86%), dolochar (1.02%), and miscellaneous scrap sales (0.45%).

Despite having infrastructure for mild steel ingots, steel shots, and grits, the company halted these operations in 2020 due to rising power costs. To mitigate this challenge, it plans to establish a 5MW captive power plant using IPO proceeds, allowing it to resume operations and ensure cost-effective power supply.

The company also maintains an in-house testing laboratory equipped with modern tools like muffle furnaces and combustion furnaces, and adheres to certifications such as ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018, reflecting its commitment to quality, environmental responsibility, and occupational safety.

Industry Landscape

India’s iron and steel sector is on a strong growth trajectory, bolstered by rising domestic demand and infrastructure expansion. Crude steel production in FY23 stood at 193.16 million tonnes, with projections aiming for 300 million tonnes by FY31 under the National Steel Policy.

The Pradhan Mantri Awas Yojana (Urban), Smart Cities Mission, and Industrial Corridors are major government initiatives expected to fuel demand. As per sector analysis, infrastructure consumption of steel is expected to rise to 11% by FY26, while the Vehicle Scrappage Policy will boost steel recycling and manufacturing.

India remains the second-largest global crude steel producer since 2019, and companies like Shree Hare-Krishna Sponge Iron are well-positioned to tap into this opportunity through reliable sponge iron production.

Strengths of Shree Hare-Krishna Sponge Iron

1. In-house Manufacturing Facility – Located in Raipur with proximity to raw materials, enabling cost efficiency and scalable operations.

2. Quality Control Systems – Equipped with an in-house lab to monitor material and product quality ensuring regulatory compliance.

3. Strong Customer Relationships – Repeat clients in Maharashtra, MP, and Chhattisgarh drive consistent demand.

4. Experienced Leadership – Led by promoter Mr. Manoj Parasrampuria, supported by a skilled operational team.

Strategic Objectives

The company aims to:

• Establish a 5MW captive green energy power plant using kiln emissions and rice husk for fuel.

• Enhance operational efficiency to improve output and margins.

• Focus on quality compliance and brand building to retain customer trust.

• Strengthen supplier and customer relationships for a more robust supply chain.

Risk Factors

While Shree Hare-Krishna Sponge Iron shows strong fundamentals, investors should consider the business risks:

• Power Dependency – Historic power cost fluctuations have previously halted operations.

• Raw Material Price Volatility – Costs of iron ore and coal contribute over 74-77% of expenses, and supplier concentration raises risks.

• Geographic Concentration – Heavy dependence on three Indian states may impact business during regional disruptions.

• Product Concentration – Over 95% revenue from sponge iron makes the business vulnerable to any demand or regulatory shifts in this segment.

• Cyclical Steel Industry Exposure – The sponge iron market is directly tied to broader trends in steel production.

Conclusion

The positive debut of Shree Hare-Krishna Sponge Iron shares on the NSE SME platform at a 10% premium reflects growing investor confidence in fundamentally strong SME companies in India’s iron and steel sector. With a well-defined growth strategy, green energy integration, and a focus on quality, the company is well-poised to tap into India’s steel boom over the coming decade.

However, like all SME investments, investors should remain vigilant about market risks, raw material dependency, and sectoral cycles. Given the company’s strategic investments in power infrastructure, strong anchor participation, and consistent financials, Shree Hare-Krishna Sponge Iron holds the potential for long-term value creation in the sponge iron manufacturing space.

This article captures all crucial details including the IPO subscription, anchor investor allocation, business profile, industry background, and the risks and opportunities associated with Shree Hare-Krishna Sponge Iron—making it a must-read for anyone tracking SME IPOs, steel sector companies, or upcoming listing opportunities in India's vibrant primary market.

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