Aditya Ultra Steel Ltd IPO

The IPO opens on 09 Sept 2024 & closes on 11 Sept 2024.

Aditya Ultra Steel Limited was incorporated as a Private Limited Company on July 27, 2011 with the Registrar of Companies, Gujarat and later on converted into a Public Limited Company on July 26, 2018. The Company started the business in commercial production in year 2012-13. Then later on in 2016-17, Company was acquired by Mr. Varun Manojkumar Jain and Mrs. Varuna Jain as a going concern effective on May 1, 2016. The Company is engaged in the business of manufacturing of rolled steel product i.e. TMT bars under the 'Kamdhenu' brand catering mainly to the construction industry and for infrastructure development. The Company manufactures TMT bars from billets through reheating furnace and rolling mill. The manufacturing plant is located at Bhalgam, in Rajkot District of Gujarat. At present, it has an integrated production capacity of 1,08,000 MT for TMT Bars. A team of qualified and skilled personnel in combination with state-of-the-art quality testing equipment undertakes complete testing like Impact, Tensile, Hardness, Microstructure, Elasticity & Yield Stress. During Financial year 2023-24, Company upgraded its furnace by replacing existing bricks with high quality brick which would help maintaining the high temperature. In addition to that the rolling section underwent an upgrade with the installation of more efficient machinery and high speed rolls which will enhance the movement of TMT Bars on rolling line. As a result of these two significant upgrades, the production plant was collectively non-operational for approximately one month. The Company made an IPO of 74,00,000 Equity Shares having the face value of Rs 10 each by raising Rs 45.88 crores in September, 2024.

Aditya Ultra Steel Ltd IPO will close on 11 Sept 2024.

<ul><li>Qualified and experienced management team.</li><li>Skilled and dedicated manpower.</li><li>Strategically located Manufacturing Plant.</li><li>Existing customer relationship.</li><li>Cordial relationship between management and labour.</li><li>Flit of Company Owned Vehicle.</li></ul>

<table class="table"> <thead> <tr> <th>S.No</th> <th>Promoters Name</th> <th>Pre Issue Shares</th> <th>Pre Issue Percentage</th> <th>Post Issue Shares</th> <th>Post Issue Percentage</th> </tr> </thead> <tbody> <tr> <td>1</td> <td>Sunny Sunil Singhi</td> <td>6148800</td> <td>35.27</td> <td>6148800</td> <td>24.76</td> </tr> <tr> <td>2</td> <td>Varun Manojkumar Jain</td> <td>4124260</td> <td>23.65</td> <td>4124260</td> <td>16.61</td> </tr> <tr> <td>3</td> <td>Varun Jain</td> <td>6804000</td> <td>39.02</td> <td>6804000</td> <td>27.4</td> </tr> </tbody> </table>

<ul><li>Business of the Company is dependent on Kamdhenu Brand.</li><li>The company has given corporate guarantee in relation to certain debt facilities to its group company which if claimed, may requires the company to pay the guaranteed amount.</li><li>Almost entire operations of the Company is limited in the state of Gujarat. Any adverse development affecting its operations in this region could have an adverse impact on its business, financial condition and results of operations.</li><li>Its Managing Director Mr. Sunny Sunil Singhi has limited experience in the steel industry in which the Company is operating.</li><li>The Company is dependent on few numbers of customers for sales. Loss of any of this large customer may affect its revenues and profitability.</li><li>The Company is dependent on a few suppliers for purchase of product. Loss of any of these large suppliers may affect its business operations.</li><li>Its business is dependent on the company manufacturing facility. The loss of or shutdown of operations of its manufacturing facility may have a material adverse effect on the company's business, financial condition and results of operations.</li><li>Steel Manufacturing Plants involve hazardous processes that can cause personal injury and loss of life, severe damage to and destruction of property and equipment, which could result in incurring material liabilities, loss of revenues and increased expenses.</li><li>The company will continue to be controlled by its Promoters after the completion of the Issue.</li><li>The Company has not entered into any agreements/ contracts for the supply of raw material and other utilities. Risks related to shortfall or non- availability of raw material and other utilities may adversely affect its manufacturing processes and have an adverse impact on its operations and financial condition.</li><li>The Company is dependent on third party manufacturer for manufacturing of TMT Bars.</li><li>The steel industry is highly cyclical and adverse variation in steel prices may have an adverse effect on the Company's results of operations and financial condition.</li><li>The Company, Promoter, Directors and Group Company are involved in certain legal proceedings. Any adverse decision in such proceedings may render it/them liable to liabilities/penalties and may adversely affect its business and results of operations.</li><li>The company has experienced significant working capital requirements in past and may continue to experience in future also. If the company experience insufficient cash flows from its operations or are unable to borrow to meet the company working capital requirements, it may materially and adversely affect its business, cash flows and results of operations.</li><li>There are certain discrepancies/errors/non-filings which have occurred in some of its corporate secretarial records relating to forms filed with the RoC and other provisions of Companies Act, 2013. Any penalty or action taken by any regulatory authorities in future, for non- compliance with provisions of corporate or any other law could impact the financial position of the Company to that extent.</li><li>The company does not have access to records and data pertaining to certain historical legal and secretarial information in relation to certain disclosures.</li><li>The company has offered Equity Shares during the last one year at a price below the Issue Price.</li><li>One of its Group Company VMS Industries Limited was subject to the penalties imposed by Stock Exchanges.</li><li>Its insurance coverage may not adequately protect the company against certain operating risks and this may have an adverse effect on the results of its business.</li><li>One of its Group Company and also Promoter Group Entity is engaged in similar line of business. Any conflict of interest may occur between its group company or the company promoter group entities and its may adversely affect the company's business, prospects, results of operations and financial condition.</li><li>The company is dependent on third party transportation providers for procuring raw material from its suppliers and delivery of trading goods and materials to its clients. Any failures on the part of such service providers to meet their obligations could have a material adverse effect on its business, financial condition and results of operation.</li><li>Failures to manage its appropriate level of inventory could have an adverse effect on its net sales, profitability, cash flow and liquidity.</li><li>The company could be exposed to risks arising from misconduct, fraud and trading errors by its employees and Business Associates.</li><li>A shortage or non-availability of electricity or water may adversely affect its manufacturing operations and have an adverse effect on the company's business, results of operations and financial condition.</li><li>Its inability to effectively manage the company's growth or to successfully implement its business plan and growth strategy could have an adverse effect on its business, results of operations and financial condition.</li><li>Dependence on debt and outflow of finance cost leads to outflow of cash flows and reduce overall profitability.</li><li>Its manufacturing activities are dependent upon availability of skilled and unskilled labour.</li><li>The company's success depends on its ability to attract and retain its key management personnel. If the company is unable to do so, it would adversely affect its business and results of operations.</li><li>In addition to regular remuneration, other benefits and expense reimbursement its Promoters, Directors, KMPs and SMPs hold a vested interest in the Company; to the extent of their shareholding and associated dividend entitlements. They also have a stake in transactions involving the Company, whether with themselves individually or with its group companies/entities. The Company in future may enter in related party transactions subject to necessary compliances.</li><li>There are certain discrepancies and non- compliances noticed in some of its corporate records relating to forms filed with taxation authorities and other public authorities.</li><li>Strikes, work stoppages or increased wage demands by its employees or any other kind of disputes with the company employees/workmen in future could adversely affect its business and results of operations.</li><li>Its business requires the company to obtain and renew certain registrations, licenses and permits from government and regulatory authorities and the failure to obtain and renew them in a timely manner may adversely affect its business operations.</li><li>Compliance with and changes in safety, health and environmental laws and various labour, workplace and related laws and regulations impose additional costs and may increase its compliance costs and a such adversely affect the company's results of operations and its financial condition.</li><li>The company has experienced negative cash flows from operations in the recent past, and its may have negative cash flows in the future.</li><li>The company is subject to the restrictive covenants of banks in respect of the Loan/Credit Limit and other banking facilities availed from them. Further as on the date of this Draft Red Herring Prospectus the Company has not received "No objection" certificate from its lenders to undertake this issue. Non receipt of such "No- Objection" certificate could lead to non- compliance of the terms of loan agreements entered into by the Company with said lenders.</li><li>If the company is unable to service its debt obligations in a timely manner or to comply with various financial and other covenants and other terms and conditions of its financing agreements, it may adversely affect the company's business, prospects, results of operations and financial condition.</li><li>Its lenders have charge over the company movable and immovable properties in respect of finance availed by it and the company group company, promoters, Directors and member of promoters group have provided their personal guarantee for such debt facility availed by it.</li><li>Its contingent liabilities as stated in the company Restated Financial Statements could affect its financial condition.</li><li>Changes in technology may render its current technologies obsolete or require the company to make substantial investments.</li><li>The average cost of acquisition of Equity shares by its Promoters is lower than the Issue price.</li><li>Fraud, theft, employee negligence or similar incidents may adversely affect the results of operations and financial condition.</li><li>Its ability to pay any dividends will depends upon future earnings, financial condition, cash flows, working capital requirements and capital expenditures.</li><li>There is no monitoring agency appointed by the Company to monitor the utilization of the Issue proceeds.</li><li>Any variation in the utilization of the Net Proceeds as disclosed in this Draft Red Herring Prospectus shall be subject to certain compliance requirements, including prior approval of the shareholders of the Company.</li><li>Any future issuance of its Equity Shares may dilute prospective investors' shareholding, and sales of its Equity Shares by the company major shareholders may adversely affect the trading price of its Equity Shares.</li><li>The Issue price of its Equity Shares may not be indicative of the market price of the company Equity Shares after the Issue and the market price of its Equity Shares may decline below the Issue Price and you may not be able to sell your Equity Shares at or above the Issue Price.</li><li>The Objects of the Issue for which funds are being raised, are based on its management estimates and the same have not been appraised by any bank or financial institution or any independent agency. The deployment of funds in the project is entirely at its discretion, based on the parameters as mentioned in the chapter titled as "Objects of the Issue".</li><li>In the event there is any delay in the completion of the Issue, or delay in schedule of implementation, there would be a corresponding delay in the completion of the objects of this Issue which would in turn affect its revenues and results of operations.</li><li>The company has not identified any alternate source of raising the funds required for the object of the Issue and the deployment of funds is entirely at its discretion and as per the details mentioned in the section titled "Objects of the Issue".</li><li>The requirements of being a public listed company may strain its resources and impose additional requirements.</li><li>Certain data mentioned in this Red Herring Prospectus has not been independently verified.</li></ul>

The Issue type of Aditya Ultra Steel Ltd is Book Building - SME.

The minimum application for shares of Aditya Ultra Steel Ltd is 2000.

The total shares issue of Aditya Ultra Steel Ltd is 7400000.

Initial public offer of 74,00,000 equity shares of face value of Rs. 10 each (the "Equity Shares") of Aditya Ultra Steel Limited ("The Company" or "The Issuer") at an issue price of Rs. 62 per equity share (including share premium of Rs. 52 per equity share) for cash, aggregating up to Rs. 45.88 crores ("Public Issue") out of which 3,70,000 equity shares of face value of Rs. 10 each, at an issue price of Rs. 62 per equity share for cash, aggregating Rs. 2.29 crores will be reserved for subscription by the market maker to the issue (the "Market Maker Reservation Portion"). The public issue less market maker reservation portion i.e. issue of 70,30,000 equity shares of face value of Rs. 10 each, at an issue price of Rs. 62 per equity share for cash, aggregating upto Rs. 43.59 crores is herein after referred to as the "Net Issue". The public issue and net issue will constitute 29.80 % and 28.31 % respectively of the post-issue paid-up equity share capital of the company.