Shri Hare-Krishna Sponge Iron IPO: Unveiling an Investment Opportunity
The Indian primary market continues to buzz with activity, presenting diverse opportunities for investors. Among the latest to capture attention is the SME IPO of Shri Hare-Krishna Sponge Iron Limited. For those considering an investment, a thorough understanding of the company's business, financial health, and the specifics of the IPO is crucial. Let's delve into the details to help you make an informed decision.
Key Details of the Initial Public Offering
The Shri Hare-Krishna Sponge Iron IPO is structured as a Book Building issue, exclusively comprising a fresh issue of shares.
| Particular | Detail |
|---|---|
| Issue Type | Bookbuilding IPO, Fresh Capital |
| Face Value | ₹10 per share |
| Price Band | ₹56 to ₹59 per share |
| Total Issue Size | 50,70,000 shares (aggregating up to ₹29.91 Crores) |
| Listing At | NSE SME |
IPO Timeline: A Visual Guide
Understanding the important dates is critical for any IPO participant. Here's a tentative schedule for the Shri Hare-Krishna Sponge Iron IPO:
Please note that these dates are tentative and subject to change.
About Shri Hare-Krishna Sponge Iron Limited
Established in May 2003, Shri Hare-Krishna Sponge Iron Limited specializes in the manufacturing and sale of Sponge Iron. This essential raw material is vital for steel production in both induction and electric arc furnaces.
- Operational Hub: The company's manufacturing facility is strategically located in Siltara - Raipur, Chhattisgarh, spanning 13.45 acres.
- Production Capacity: It boasts an annual production capacity of 30,000 metric tonnes of Sponge Iron.
- Quality & Certifications: The manufacturing unit adheres to high standards, holding ISO 9001:2015 for quality management, ISO 14001:2015 for environmental management, and ISO 45001:2018 for occupational health and safety.
- Market Presence: The company primarily caters to markets in Maharashtra, Madhya Pradesh, and Chhattisgarh.
- Workforce: As of April 30, 2025, the company had a dedicated team of 92 full-time employees.
Core Strengths
Shri Hare-Krishna Sponge Iron Limited highlights several competitive advantages:
- Robust in-house manufacturing capabilities providing control over production.
- Rigorous quality control measures ensuring consistent product quality.
- Established, long-term relationships with customers.
- A highly qualified and experienced management team steering the company.
Financial Performance Overview
A crucial aspect for any potential investor is the company's financial health. Here's a snapshot of Shri Hare-Krishna Sponge Iron Limited's performance over the past three fiscal years:
| Fiscal Year Ending (March 31) | Assets (₹ Crore) | Revenue (₹ Crore) | Profit After Tax (₹ Crore) | EBITDA (₹ Crore) | Net Worth (₹ Crore) | Total Borrowing (₹ Crore) |
|---|---|---|---|---|---|---|
| 2025 | 93.16 | 83.60 | 9.20 | 10.78 | 73.59 | 11.39 |
| 2024 | 75.74 | 84.93 | 10.17 | 12.11 | 64.39 | 7.24 |
| 2023 | 58.58 | 95.25 | 10.53 | 13.97 | 54.22 | 0.75 |
It's important to note that the company experienced a slight decrease in revenue by 2% and a more significant drop in profit after tax (PAT) by 10% between the fiscal years ending March 31, 2024, and March 31, 2025.
Key Performance Indicators (KPIs)
As of March 31, 2025, the company's market capitalization stands at ₹113.23 Crores. Below are some vital performance indicators:
| KPI | Value |
|---|---|
| Return on Equity (ROE) | 13.33% |
| Return on Capital Employed (ROCE) | 14.70% |
| Debt/Equity Ratio | 0.15 |
| Return on Net Worth (RoNW) | 12.51% |
| PAT Margin | 11.43% |
| EBITDA Margin | 13.40% |
| Price to Book Value | 1.29 |
| Metric | Pre-IPO | Post-IPO |
|---|---|---|
| Earnings Per Share (EPS) | 6.51 | 4.79 |
| Price/Earnings (P/E) Ratio | 9.06 | 12.31 |
Purpose of the IPO Proceeds
Shri Hare-Krishna Sponge Iron Limited intends to utilize the net proceeds from this IPO for the following key objectives:
- Capital Expenditure: A significant portion will be allocated to funding the capital expenditure required for setting up a Captive Power Plant at its Siltara – Raipur facility, amounting to approximately ₹230 Million. This initiative aims to address power-related challenges the company has faced.
- General Corporate Purposes: The remaining funds will be used for various general corporate needs, supporting ongoing operations and future growth initiatives.
Understanding the Investment Lot Size
Investors interested in the Shri Hare-Krishna Sponge Iron IPO must bid for a minimum number of shares, which come in specific lot sizes. This applies to both retail investors and High Net-worth Individuals (HNIs).
| Application Category | Minimum Lot Size (Shares) | Minimum Investment Amount (₹) |
|---|---|---|
| Retail (Min) | 2,000 | 1,12,000 (at lower price band) / 1,18,000 (at upper price band) |
| Retail (Max) | 2,000 | 1,12,000 (at lower price band) / 1,18,000 (at upper price band) |
| HNI (Min) | 2 lots (4,000 shares) | 2,36,000 |
It is generally suggested for investors to bid at the cut-off price to maximize their chances of allotment, especially in case of oversubscription.
Share Reservation and Promoter Holding
The total 50,70,000 shares offered in the IPO are distributed among different investor categories:
| Investor Category | Shares Offered | Percentage (%) |
|---|---|---|
| Market Maker | 2,58,000 | 5.09% |
| Qualified Institutional Buyers (QIB) | 24,02,000 | 47.38% |
| Non-Institutional Investors (NII / HNI) | 7,24,000 | 14.28% |
| Retail Individual Investors (RII) | 16,86,000 | 33.25% |
| Total Shares Offered | 50,70,000 | 100.00% |
Promoter Shareholding
The promoters of the company include Anita Tradelinks Private Limited, Buxom Trexim Private Limited, Shyam Sunder Parasrampuria, Manoj Parasrampuria, and Manish Parasrampuria. Their shareholding pattern before and after the IPO is as follows:
| Holding Stage | Percentage of Shares |
|---|---|
| Pre-Issue Shareholding | 100% |
| Post-Issue Shareholding | 73.58% |
Strategic Business Analysis (SWOT)
A strategic analysis helps in understanding the internal and external factors that could impact the company's future performance. Here's a brief SWOT assessment for Shri Hare-Krishna Sponge Iron Limited:
Strengths:
- Strong in-house manufacturing capability providing control over production.
- Adherence to multiple international quality and safety certifications (ISO 9001:2015, 14001:2015, 45001:2018) ensuring product reliability.
- Established customer relationships in key regional markets, potentially leading to stable demand.
- Experienced management team, which is crucial for navigating industry challenges.
Weaknesses:
- Recent financial performance indicates a decline in both revenue and profit after tax.
- Past heavy impact due to power shortages and high power costs, highlighting operational vulnerabilities.
- The IPO appears to be fully valued given the recent de-growth in financials.
Opportunities:
- The ongoing setup of a captive power plant is a significant opportunity to mitigate past power cost issues and enhance operational efficiency and cost control.
- Potential for growth in the sponge iron market driven by increasing steel demand in India.
Threats:
- Intense competition within the highly fragmented sponge iron and steel industry.
- Volatility in raw material prices (e.g., iron ore, coal) can significantly impact profit margins.
- General economic slowdowns or downturns affecting industrial demand.
- Execution risks associated with setting up the new captive power plant, including delays and cost overruns.
- Sustained decline in top and bottom lines could erode investor confidence.
Investment Outlook: A Balanced Perspective
Considering the financial trajectory which shows a de-growth in both top and bottom lines, alongside the valuation, some market observers suggest that this offering may be fully priced. While the company's strategic move to establish a captive power unit aims to address operational challenges like power shortages and high energy costs, the current financial performance might warrant a cautious approach for potential investors. It might be prudent to observe the company's performance post-listing and the successful commissioning of its captive power plant before making an investment decision.
How to Participate in IPOs (General Steps)
If you're looking to apply for an IPO like Shri Hare-Krishna Sponge Iron, here's a general guide on the application process:
- Online Application: Most investors apply online through their brokerage accounts using either the UPI (Unified Payments Interface) mechanism or ASBA (Applications Supported by Blocked Amount) via their bank's net banking portal.
- UPI Method: If your broker does not offer banking services, you can often apply via their platform by providing your UPI ID. You will then receive a mandate request on your UPI app (like Google Pay, PhonePe, BHIM) which needs to be approved to block the funds.
- ASBA Method: For direct bank applications, log in to your bank's net banking portal, navigate to the IPO section, select the desired IPO, enter your bid details, and submit. The amount will be blocked in your account until allotment.
Company and Registrar Contact Details
For further inquiries, here are the contact details for Shri Hare-Krishna Sponge Iron Limited and the IPO registrar:
Company Contact Information
| Detail | Information |
|---|---|
| Address | Flat No 2-D, 2nd Floor, Tower No. 1, Alcove Gloria, Municipal Premises No. 403/1, Dakshindari Road, VIP Road, Sreebhumi, Kolkata, North 24 Parganas district, West Bengal, 700048 |
| Phone | +91-9589116050 |
| cs@shkraipur.com | |
| Website | shkraipur.com |
IPO Registrar Details
The registrar for this IPO is responsible for share allotment and refund processing.
| Detail | Information |
|---|---|
| Name | Kfin Technologies Limited |
| Phone | 04067162222, 04079611000 |
| shrihare.ipo@kfintech.com | |
| Website | kosmic.kfintech.com/ipostatus/ |
Concluding Thoughts
The Shri Hare-Krishna Sponge Iron IPO presents an opportunity to participate in a company within the sponge iron manufacturing sector. While its operational strengths and strategic plans, such as the captive power plant, are notable, the recent financial performance showing a decline in revenue and profitability warrants careful consideration. As with any investment, it's essential to conduct your own due diligence, assess your risk appetite, and align your decision with your overall investment objectives. Stay informed, stay cautious, and make your choices wisely in the dynamic world of stock markets.