At a Glance
Shri Hare-Krishna Sponge Iron Ltd is tapping NSE SME with a ₹29.91 crore IPO between June 24–26, 2025. They make sponge iron—aka the lump of metal that steelmakers can’t live without. But with declining profits, rising debt, and a need for their own power plant just to survive, is this IPO an “iron”-ic offering in disguise?
🏭 1. What Do They Do (Besides Get Electrocuted by Power Bills)?
- 🎯 Core Business: Manufacturing sponge iron – a raw material used to make steel in induction and arc furnaces.
- 🏗️ Plant Location: Siltara, Raipur, Chhattisgarh (in the heart of India’s steel corridor)
- 🌱 Capacity: 30,000 MTPA
- 📜 Certifications: ISO 9001, ISO 14001, ISO 45001. Fancy badges, but no EBITDA growth.
Sponge Iron = Steel ke aloo. Ubiquitous, essential, and soggy if you lose power.
💸 2. IPO Structure – Just Enough To Buy a Power Plant?
| Details | Info |
|---|---|
| Issue Size | ₹29.91 Cr (100% fresh) |
| Shares Offered | 50.70 lakh |
| Price Band | ₹56 – ₹59 |
| Lot Size (Retail) | 2,000 shares |
| Min Investment (Retail) | ₹1.18 lakh |
| HNI Min Investment | ₹2.36 lakh |
| Listing Platform | NSE SME |
| Market Maker | Hem Finlease Pvt Ltd |
| Lead Manager | Hem Securities Ltd |
🎯 Use of Funds:
- ₹23 Cr → To build a Captive Power Plant
- Rest → General corporate “Shaktimaan” expenses
🪫 Translation: They’re tired of Chhattisgarh’s electricity cuts and want to generate their own. Capitalism meets voltage.
📉 3. Financials – Weak Current, Weak Profits
| ₹ in Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 95.25 | 84.93 | 83.60 |
| PAT | 10.53 | 10.17 | 9.20 |
| EBITDA | 13.97 | 12.11 | 10.78 |
| Borrowing | 0.75 | 7.24 | 11.39 |
| Net Worth | 54.22 | 64.39 | 73.59 |
📉 Key Issues:
- Revenue is shrinking (down 12% in 2 years)
- PAT fell 10% in FY25
- Debt up 15x since FY23 — blame the power bills
🧯Their sponge iron is hot, but their margins are not.
🧮 4. Valuation – Iron Price, Premium Hopes
- EPS (Post IPO): ₹4.79
- P/E at ₹59: 12.31x
- Book Value: ₹45.84 → P/B = 1.29x
- Market Cap: ₹113.23 Cr
📊 Comparison:
- Sponge iron players like Godawari Power, Prakash Industries, etc. trade between 6–9x earnings.
- SHKSIL demands a premium despite falling revenue and no power backup till now.
🔎 EduFair Value Range: ₹40 – ₹50
- At 10x EPS = ₹48
- At 1.2x Book = ₹55
- Powerless profitability doesn’t deserve market premium
🎯 Asking price = ₹59
⚠️ Our FV range = ₹40–₹50
🧔♂️ 5. Promoters, Power & Precarious Planning
👑 Promoters:
- Anita Tradelinks Pvt Ltd
- Buxom Trexim Pvt Ltd
- Shyam Sunder, Manoj & Manish Parasrampuria
🎯 Pre-IPO holding: 100%
📉 Post IPO: 73.58%
Not bad… but remember — they’re offloading ownership to raise cash not for growth, but to plug a power hole.
⛏️ Employees: 92 full-time workers as of April 2025.
📊 6. Subscription Outlook – No Sparks Yet
(No live bids as of writing.)
Anchor investors have committed ₹8.5 Cr (great), but don’t mistake that for conviction. It’s a “let’s park funds till lock-in ends” type move.
Expect Day 2/3 to tell the real story. For now: caution > compulsion.
🧠 7. EduInvesting Verdict: Powerless or a Dark Horse?
👎 What we don’t like:
- ❌ Topline and PAT decline in a commodity boom year (FY25)
- ❌ Fully priced IPO (12.3x P/E) for a company hit by power issues
- ❌ Asking investors to pay for basic infra (captive power)
- ❌ SME liquidity risk + ₹1.18L min bid
👍 What we like:
- ✅ ROCE: 14.70%, Debt/Equity: low at 0.15
- ✅ In-house manufacturing with ISO credibility
- ✅ High PAT Margin (11.43%) for an iron maker
- ✅ ₹45 Book Value gives cushion at lower band
🔌 Final Verdict: Needs a Spark (and a Power Plant)
This isn’t a bad business. But it’s a business held hostage by electricity bills, asking you to pay the ransom via IPO. Until the power plant lights up (and margins along with it), we’d call this a “hold the bid” play.
Don’t get shocked later.
🧾 Tags: Shri Hare-Krishna IPO, Sponge Iron SME IPO, Power Plant IPO, Iron Manufacturing IPO, NSE SME IPO June 2025, EduInvesting SME Coverage
✍️ Written by Prashant | 📅 June 23, 2025
