German Green Steel and Power Files DRHP With Sebi for Rs450 Crore IPO
German Green Steel and Power Ltd., situated in Gujarat, has submitted its draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (Sebi) to launch an IPO with a Rs 450 crore valuation.
Promoters Inamulhaq Shamsulhaq Iraki and Abdulhaq Shamsulhaq Iraki are selling 20 lakh equity shares for sale in addition to issuing new shares valued at Rs 450 crore.
The new issue's proceeds include Rs 325.21 crore designated for a hybrid wind and solar power project and capital expenditures (capex) to expand the company's manufacturing facilities in Samakhiyali, Kutch, Gujarat.
The remaining money will be utilized for general business objectives, while Rs 55.01 crore will be used to repay specific borrowings.
With its "German TMT" brand for TMT bars, German Green Steel and Power, a vertically integrated iron and steel company, primarily serves the Gujarat market. TMT Bars, MS Billets, and Sponge Iron are among the products offered by the company.
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The DRHP reports that the company's operating revenue increased from Rs 892.25 crore in Fiscal 2022 to Rs 1,129.78 crore in Fiscal 2024 at a compound annual growth rate (CAGR) of 12.53 percent.
Over the same period, EBITDA improved from Rs 39.15 crore to Rs 80.11 crore, with a compound annual growth rate (CAGR) of 43.04 percent.
This indicates strong operational performance, as the EBITDA margin increased from 4.39 percent to 7.09 percent.
With allocations of up to 50 percent for qualified institutional buyers (QIB), at least 15 percent for non-institutional bids, and 35 percent for retail individual bidders, the initial public offering (IPO) is organized through a book-building process. If the company decides to go forward with a pre-IPO placement of up to 20 percent of the new issue, the size of the new issue will be reduced.
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As of December 31, 2024, captive electricity and renewable energy plants provide about 67.72 percent of German Green Steel's energy requirements. The company intends to build a second hybrid wind and solar plant in order to further reduce its dependency on outside power sources.
The majority of German Green Steel and Power's operations are B2B, catering to distributors, dealers, and institutional clients in industries like real estate, engineering services, and roads. The business uses a targeted marketing approach to directly contact institutional and corporate clients.
The operating revenue of German Green Steel and Power increased from Rs 892.25 crore in Fiscal 2022 to Rs 1,129.78 crore in Fiscal 2024 at a compound annual growth rate (CAGR) of 12.53 percent. The EBITDA margin increased from 4.39 percent in Fiscal 2022 to 7.09 percent in Fiscal 2024, indicating outstanding operating performance. EBITDA grew at a CAGR of 43.04 percent from Rs 39.15 crore in Fiscal 2022 to Rs 80.11 crore in Fiscal 2024. From Rs 34.16 crore in Fiscal 2022 to Rs 41.67 crore in Fiscal 2024, Profit After Tax increased at a CAGR of 10.43 percent.