Shyam Metalics is officially opening season two of IPO later next week. The offer comes after lean months of April and May and will be followed by at least three other IPOs (check our IPO calendar for more details). Although the offer size has been reduced, it is still decent at INR909 crore. Another interesting figure to keep an eye on is Shyam Metalics IPO GMP which has started on a strong note.
Shyam Metalics IPO details
| Subscription Dates | 14 – 16 June 2021 |
| Price Band | INR303 – 306 per share |
| Fresh issue | INR657 crore |
| Offer For Sale | INR252 crore |
| Total IPO size | INR909 crore |
| Minimum bid (lot size) | 45 shares |
| Face Value | INR10 per share |
| Retail Allocation | 35% |
| Listing On | NSE, BSE |
The offer price of INR303 – 306 per share means that the company is valued at a P/E ratio of 20.8 – 21 based on FY2020 earnings. Although the company has reported only nine months figures in FY2021, it is a safe assumption that P/E ratio for full year will be somewhat closer to these numbers. Shyam Metalics has been profitable in each of the last four years and considering its strong fundamentals, this is attractive valuation.
Read Also: Shyam Metalics IPO explained in 10 points
Shyam Metalics IPO GMP (Grey Market Premium) rates
| Date | GMP (in INR) | Kostak (in INR) | Subject to Sauda (in INR) |
| 23 June 2021 | 130 | – | – |
| 22 June 2021 | 135 | – | – |
| 21 June 2021 | 130 | 500 | 4,800 |
| 18 June 2021 | 135 | 500 | 5,000 |
| 17 June 2021 | 150 | 500 | 5,000 |
| 16 June 2021 | 140 | 450 | 4,500 |
| 15 June 2021 | 150 | 450 | 4,500 |
| 14 June 2021 | 140 | 410 | 4,500 |
| 12 June 2021 | 150 | 430 | 5,000 |
| 11 June 2021 | 160 | 450 | 5,000 |
| 10 June 2021 | 140 | 400 | 5,000 |
| 9 June 2021 | 130 | 350 | – |
| 8 June 2021 | 140 | 400 | – |
Meanwhile, its Return on Net Worth (RONW) stood at 12% which is better than industry leaders such as JSW Steel and Tata Steel. Shyam Metalics also boasts of double digit net profit margins. Such high margins in a commodity product are often indicative of highly refined and optimized back-end operations.
Considering these positives, it is no wonder that the grey premium activity started at nearly 45% of offer price. The rates have further strengthened in the recent days amid buoyancy in broader markets.
Shyam Metalics’ financial performance (in INR crore)
| FY2018 | FY2019 | FY2020 | 9M FY2021 | |
| Revenue | 3,920.4 | 4,684.6 | 4,395.3 | 3,995.6 |
| Expenses | 3,405.5 | 3,920.7 | 4,099.9 | 3,489.5 |
| Comprehensive income | 521.9 | 641.8 | 340.8 | 460.2 |
| Margin (%) | 13.3 | 13.7 | 7.8 | 11.5 |
