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Gallant Metal enters capital market with maiden IPO of Rs 37.12 cr

Written by: Staff
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New Delhi, Mar 3 (UNI) Gallant Metal Limited (GML) will hit the capital market with its maiden issue of 371.20 lakh equity shares with a face value of Rs 10 each for cash at par aggregating Rs 37.12 crore to part finance its vertically-integrated greenfield steel plant in Gujarat.

The project has a participation of Rs 114.50 crore as Term Loans from consortium of Banks and Rs 45.20 crore from its promoters.

The public issue which opens on March 6, 2006 and closes on March 10, 2006 is comprising of 60 lakh equity shares as contribution from the promoters and prompter group and has a 5 per cent reservation for its permanent employees. Thus the net offer to public is of 295.64 lakh equity shares aggregating to Rs 29.56 crore of which 10 per cent is mandatory to be allotted to qualified institutions bidders (QIBs).

The shares are proposed to be listed on the BSE and NSE.

GML is setting up the integrated steel plant, with an 18 MW Captive Power Plant, in two phases, at Samakhayali Village, Kutch, Gujarat on 122 acres of land involving a total investment of Rs 190.82 crore.

Briefing mediapersons here today, Mr Chandra Prakash Agrawal, Chairman and Managing Director of GML, said that the phase-I of the project consists of a Sponge Iron division with a capactiy of 99,000 tonnes per annum, a MS Billets division with a capacity of 1,68,300 tonnes per annum. The commercial production of Phase-I has already commenced from December 2005.

''Enthused by the successful commissioning of the project within a short span of nine months, GML has begun the implementation of the second phase for installing an 18 MW Captive Power Plant, scheduled to be commissioned by October 2006,'' Mr Agrawal said.

The GML will surely benefit from this plant to meet the substantial gap between demand and supply of finished steel in the western region. The company plans to market the bulk of their products in Gujarat, Maharashtra and Rajasthan taking advantage of the lower freight charges, he added.

The 18 MW Captive Power Plant will ensure uninterrupted power supply and would almost eliminate the dependence on the State electricity Board. Further, the power would be available to the unit at a considerably cheaper cost of Re 1 per unit against the SEB's Rs 4.20 per unit in turn improving the company's profitability. The raw material required for generation of power like lignite, is available in plenty locally in the Kutch region.

GML will also be able to sell the surplus power to the grid.

The project site has been chosen in view of its proximity to the Kandla Port, and the regional tax and excise incentives such as refund of Excise Duty for a period of 5 years and Salex Tax exemption for 10 years, offered to projects in the area by the Gujarat government, Mr Agrawal said adding that the savings because of these would add to the revenue of the company considerably.

UNI BBS ARB BS1535

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