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.
Being in a cyclical industry is the biggest risk
Commodity cycle if dies down early may inflate the risk
Diversified nature of product portfolio
Low debt with effective cost control measures
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
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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