RK Steel Manufacturing IPO gets SEBI nod - From issue size to objectives, 3 key details

The steel manufacturer’s IPO comprises solely fresh equity of 2 crore shares, as the company aims to utilize the fresh proceeds for funding its capital requirements and repaying its borrowings.

Here are some details on the RK Steel Manufacturing IPO

RK Steel Manufacturing IPO: Issue details and lead manager

The company will issue 2 crore fresh equity shares and has not disclosed the offer size yet, Other important details pertaining to share price band, lot size and listing dates too have not been announced.

The offer will be handled by GYR Capital Advisors, while MUFG Intime India is the registrar to the issue.

RK Steel Manufacturing IPO: Utilization of funds

According to its DRHP, the steel manufacturer will deploy upto Rs 76 lakh for funding its working capital requirements, and around Rs 43.23 lakh will be utilized for the repayment and pre-repayment of its borrowings.

While the remaining proceeds will be used for funding general corporate purposes. The proceeds mentioned will be deployed by the company. The raised proceeds will also be utilized to meet issue related expenses, including, fee paid to BRLM, fees paid to regulator and stock exchanges etc.

RK Steel Manufacturing IPO: Key Risk

The offer is subject to many risks as well, the business related risks include: high dependency on limited number of geographies as the company primarily operates in Southern India, and derived more than 98% of its revenue from the region over the past fiscal years.

The steel manufacturer is highly dependent on its top 10 clients for the procurement of raw materials, any disruption with these clients may adversely affect its operations. Also the company operates from its single manufacturing facility located in Tamil Nadu, any disruptions here would hamper with its operations

Additionally high revenue derivation from certain products, decline in net profit, low-business margins, and risks associated with operating in hazardous industry, and related party transactions are some other factors that should be monitored.