The data has been compiled from various sources and might have small difference but overall theme is to subscribe or not — we will focus on that

Shyam Metalics IPO– Shyam Metalics and Energy Ltd (SMEL), company in a cyclical business

Business — An integrated metal producing company with focus on long steel products and ferro alloys

~50% business comes from finished steel

Offer purpose —  Fresh issuance of equity shares worth up to ₹657 crore and a ₹252 crore offer for sale by existing shareholders.

Risks —

Being in a cyclical industry is the biggest risk

Commodity cycle if dies down early may inflate the risk

Strength

Diversified nature of product portfolio

Low debt with effective cost control measures

Future

Company plans to double finished steel capacity but that’s still 3 yr away

Any slowdown in coming years in commodity cycle may cause the company financials to go bad

Valuations

Although no direct peers, but valuations are not cheap

Should we apply?

People can only subscribe for possible listing gains only

Recommended to sell if getting 10-30% gains on listing day

One can wait to enter at low prices for investment purposes and review holdings with each quarter earnings

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