Shyam Metalics and Energy IPO – will Rise and Shine

  • Date: 12th June 2021
  • Small Cap: ₹7,800 cr. Mkt cap
  • Sector –  Steel industry
  • IPO Opens 14-16th Jun, at ₹303-306/share
  • Valuations: P/E – 12.8, EV/EBITDA – 8.1
  • Advice: SUBSCRIBE


  • The global steel cycle is on an upswing. Global and domestic demand for steel is rising, and many India based steel plants are running at good capacity utilizations.
  • SMEL have a good financial strength, low debt, fair cash and ability to invest in their balance sheet.
  • Integrated operations, proximity to RM sources, in house power generation and captive railway sidings build into a low cost operating model, which is good in a commodity industry.
  • Growth plans are good including new products launch and doubling of mfg. capacity over 5 years.
  • This IPO will also help SMEL to reduce debt and strengthen the balance sheet for planned growth.
  • Key risks are 1) dip in steel cycle or Indian steel prices 2) high competition 3) steel price control by GoI 4) Rising iron ore and power costs.
  • Opinion: Investors can SUBSCRIBE to this IPO with a 1-2 year perspective.

JainMatrix Investments Service – PRICING OPTIONS

IPO Offering highlights

  • The IPO opens from 14-16th Jun 2021 in a Price Band of ₹303-306 per share
  • Total IPO size is ₹909 cr. of 2.97 cr. shares, about 12% of the equity shares. The IPO includes a fresh issue of ₹657 cr. and an Offer for Sale (OFS) of the remaining value, making up 0.82 cr. shares.
  • The lot size is 45 shares and Face Value is ₹10 per share.
  • Objects of the offer: Table 1: The Fresh Issue of up to ₹657 cr. will be utilized in following manner:
Particulars  Amount which will be financed from Net Proceeds Estimated Utilisation of Net Proceeds in Fiscal 2022
Repayment and/or pre-payment of debt of Company and SSPL, one of its Subsidiaries470 cr.470 cr.
General corporate purposes187 cr.187 cr.
  • The promoters own 100 % in SMEL which will fall to 88.35% post-IPO.
  • The IPO share quotas for QIBs: 50%, Non-Institutional Investors 15% and Retail is 35%.
  • In the grey market, the price of SMEL is at ₹436, a 42% premium to IPO price.  

Do read our insightful research, we attach the complete Investment report in PDF format here.


This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. JM has no stake ownership or financial interests in SMEL or any group company. Punit Jain intends to apply for this IPO. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an Investment Advisor. Punit Jain is a registered Research Analyst under SEBI (Research Analysts) Regulations, 2014. JM has been publishing equity research reports since Nov 2012. Any questions should be directed to the director of JainMatrix Investments at


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