Earthstahl & Alloys Limited launches its IPO on January 27, 2023: Should you Invest?

Earthstahl & Alloys Limited IPO (Earthstahl & Alloys IPO): Should you Invest?

Earthstahl and Alloys Limited

Earthstahl & Alloys Limited is all set to launch its IPO on January 27, 2023. Earthstahl & Alloys IPO will close on January 31, 2023. With the help of this initial public offer (BSE SME IPO), the company aims to raise ₹12.96 crores. Reports say that Earthstahl & Alloys Limited will dilute 3,000 of its shares. This IPO’s price band has been fixed at ₹38 to ₹40. 

Why is Earthstahl & Alloys Limited Raising ₹12.96 Crores?

The ₹12.96 crores that the company wants to raise through the Earthstahl & Alloys IPO will be to:

  • Fund capital expenditure for increasing its manufacturing unit’s electricity supply voltage by 4-times. The company plans to increase the electricity supply voltage of the Duldula manufacturing plant (at Chattisgarh’s Baloda Bazar) to 132 KV from 33 KV. 
  • Meet expense related issues.
  • Meet the general purpose of the corporation.
  • Meet the working capital needs.

Now, let’s learn more about the company.

About Earthstahl & Alloys Limited

Earthstahl & Alloys Ltd. (EAL) is a Chhattisgarh based company, which was incorporated in 2009. The manufacturing plant of EAL is located in Chhattisgarh’s Duldula, which is a village near Raipur. The company manufactures Ductile Iron Pipe Fittings as well as Cast Iron Lumps. 

As per the end-user’s need, they produce a wide range of castings with varied sizes and chemicals. They mostly produce:

  • Alloy Castings
  • Steel Castings
  • DI Castings 

They are capable of producing multifarious parts of:

  • Engineering items
  • Pipes and fittings
  • Mining Equipment
  • Railway Equipment
  • Agriculture Equipment
  • Automobile Equipment
  • Sinter Plant
  • Power Plants
  • Sponge Iron Plants
  • Cement Plants
  • Pellet Plants, and many more

The cast iron lumps manufactured by Earthstahl & Alloys Limited are used by steel foundries as raw material for manufacturing a wide range of products including:

  • cast iron pipe fitting
  • decorative cast iron pieces
  • manhole covers
  • fan components
  • latch machines

Public water supply systems use ductile iron pipe fittings as pipe connectors. As per the available records till September 30, 2022, one hundred and sixty one people worked in the company’s payroll. 

Earthstahl & Alloys Limited: Financial Performance

The financial performance of Earthstahl & Alloys Limited (EAL) in the last 3 financial years are:

1. Financial Year 2022

  • Turnover = ₹ 49.08 crore
  • Net Profit = ₹ 7.46 crore

2. Financial Year 2021

  • Turnover = ₹ 24.58 crore
  • Net Profit = ₹ 2.67 crore

3. Financial Year 2022

  • Turnover = ₹ 31.82 crore
  • Net Profit = - ₹ 0.34 crore

In the current financial year 2023’s first half, EAL’s financial performance are:

  • Turnover = ₹ 48.25 crore
  • Net Profit = ₹ 5.81 crore

Final Words

The issue seems lucratively priced, especially by looking at the annualised earnings of Earthstahl & Alloys Limited in the last one and half years. However, experts have a major concern about the sustainability of their earnings. If you are well-funded, you can invest in this Earthstahl & Alloys Limited IPO (Earthstahl & Alloys IPO) for a medium-to-long term investment horizon.

Highlights

  • Earthstahl & Alloys Limited (EAL) manufactures ductile iron pipe fittings and cast iron lumps.
  • The company has earned exceptionally good earnings in the last one and half years (18 months). When compared to the previous fiscals, the earnings are too steep. This factor raised concern among short term investors as they fear the company may not be able to maintain this trajectory.
  • The IPO share price band of ₹38 to ₹40 looks lucrative, especially when the FY23 are taken into account.
  • Analysts believe that the medium to long term investors can invest their money in this Earthstahl & Alloys IPO, especially if they are well-funded.

Earthstahl & Alloys Limited is all set to launch its IPO on January 27, 2023. Earthstahl & Alloys IPO will close on January 31, 2023. With the help of this initial public offer (BSE SME IPO), the company aims to raise ₹12.96 crores. Reports say that Earthstahl & Alloys Limited will dilute 3,000 of its shares. This IPO’s price band has been fixed at ₹38 to ₹40. 

Why is Earthstahl & Alloys Limited Raising ₹12.96 Crores?

The ₹12.96 crores that the company wants to raise through the Earthstahl & Alloys IPO will be to:

  • Fund capital expenditure for increasing its manufacturing unit’s electricity supply voltage by 4-times. The company plans to increase the electricity supply voltage of the Duldula manufacturing plant (at Chattisgarh’s Baloda Bazar) to 132 KV from 33 KV. 
  • Meet expense related issues.
  • Meet the general purpose of the corporation.
  • Meet the working capital needs.

Now, let’s learn more about the company.

About Earthstahl & Alloys Limited

Earthstahl & Alloys Ltd. (EAL) is a Chhattisgarh based company, which was incorporated in 2009. The manufacturing plant of EAL is located in Chhattisgarh’s Duldula, which is a village near Raipur. The company manufactures Ductile Iron Pipe Fittings as well as Cast Iron Lumps. 

As per the end-user’s need, they produce a wide range of castings with varied sizes and chemicals. They mostly produce:

  • Alloy Castings
  • Steel Castings
  • DI Castings 

They are capable of producing multifarious parts of:

  • Engineering items
  • Pipes and fittings
  • Mining Equipment
  • Railway Equipment
  • Agriculture Equipment
  • Automobile Equipment
  • Sinter Plant
  • Power Plants
  • Sponge Iron Plants
  • Cement Plants
  • Pellet Plants, and many more

The cast iron lumps manufactured by Earthstahl & Alloys Limited are used by steel foundries as raw material for manufacturing a wide range of products including:

  • cast iron pipe fitting
  • decorative cast iron pieces
  • manhole covers
  • fan components
  • latch machines

Public water supply systems use ductile iron pipe fittings as pipe connectors. As per the available records till September 30, 2022, one hundred and sixty one people worked in the company’s payroll. 

Earthstahl & Alloys Limited: Financial Performance

The financial performance of Earthstahl & Alloys Limited (EAL) in the last 3 financial years are:

1. Financial Year 2022

  • Turnover = ₹ 49.08 crore
  • Net Profit = ₹ 7.46 crore

2. Financial Year 2021

  • Turnover = ₹ 24.58 crore
  • Net Profit = ₹ 2.67 crore

3. Financial Year 2022

  • Turnover = ₹ 31.82 crore
  • Net Profit = - ₹ 0.34 crore

In the current financial year 2023’s first half, EAL’s financial performance are:

  • Turnover = ₹ 48.25 crore
  • Net Profit = ₹ 5.81 crore

Final Words

The issue seems lucratively priced, especially by looking at the annualised earnings of Earthstahl & Alloys Limited in the last one and half years. However, experts have a major concern about the sustainability of their earnings. If you are well-funded, you can invest in this Earthstahl & Alloys Limited IPO (Earthstahl & Alloys IPO) for a medium-to-long term investment horizon.

Highlights

  • Earthstahl & Alloys Limited (EAL) manufactures ductile iron pipe fittings and cast iron lumps.
  • The company has earned exceptionally good earnings in the last one and half years (18 months). When compared to the previous fiscals, the earnings are too steep. This factor raised concern among short term investors as they fear the company may not be able to maintain this trajectory.
  • The IPO share price band of ₹38 to ₹40 looks lucrative, especially when the FY23 are taken into account.
  • Analysts believe that the medium to long term investors can invest their money in this Earthstahl & Alloys IPO, especially if they are well-funded.

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