Shyam Metalics IPO opens TODAY: Should you apply? Check what Market Guru Anil Singhvi says about this Initial Public offering
Shyam Metalics IPO open date: Zee Business Managing Editor Anil Singhvi on Monday said that Shyam Metalics is a fantastic company and Investors should apply for this IPO, not only for listing gains but also for the long term. Singhvi highlights that the promoters of the company have good experience in the business for the past 15 to 20 years. The track record of the company is extremely impressive
Shyam Metalics IPO open date: Zee Business Managing Editor Anil Singhvi on Monday said that Shyam Metalics is a fantastic company and Investors should apply for this IPO, not only for listing gains but also for the long term. Singhvi highlights that the promoters of the company have good experience in the business for the past 15 to 20 years. The track record of the company is extremely impressive.
Singhvi said that Shyam Metalics is making profits for the past 10 years and expanding consistently. This shows that the company is growth oriented. This indicates that the management and the promoters of the company are extremely focussed on growth.
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Singhvi said it has been seen previously that steel / metals companies create a lot of pressure on their Balance Sheet, due to high debt levels due to over expansion. Many such companies get sold when the commodity cycle weakens. The debt equity ratio of the Shyam Metalics is 0.11, which is one of the lowest in the Industry which indicates the debt situation is extremely comfortable.
Singhvi said that the Return on Equity (RoE) is more than 26% which is very impressive with such a low Debt to Equity ratio. This indicates that the financials of the company are extremely good and strong.
The Market Guru said that the company intends to double its capacity by 2025 from 5.7 mtpa to 11.5 mtpa. The company is available at attractive valuations and the growth outlook of the company for next 3 to 5 years is extremely strong. Singhvi said that the key thing to understand is that the company will be expanding its capacities via internal accruals and will not be increasing their debt levels.
Singhvi said that strong management, strong balance sheet and focus on growth are the 3 key reasons which make this company attractive.
Singhvi said that after this IPO, the promoter’s stake will be 88.35%. The promoters of the company will have to bring their stake down to 75% to meet SEBI’s requirements in the next 2 to 3 years. Singhvi said with the strong growth as well as execution, the management will not face issues diluting stake later.
Singhvi said that not only will the company give strong listing gains but can see levels of Rs 800 – Rs 1000 in the long term.
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