Vraj Iron and Steel IPO Witnesses Strong Demand, Subscribed Over 119 Times on Last Day of Bidding

The Vraj Iron and Steel initial public offering (IPO) has seen exceptional demand from investors, with the subscription reaching over 119 times the offer size by the final day of bidding. This surge in interest is a positive indicator of market confidence in the company’s future prospects.

The IPO of Vraj Iron and Steel, which commenced on June 26, has attracted significant attention from investors in the primary market. The company, known for its production of sponge iron, set a price range of ₹195 to ₹207 per equity share for the IPO, aiming to raise ₹171 crore through the issuance of fresh shares.

The strong subscription numbers on the last day of bidding suggest a favorable sentiment towards the mainboard IPO. Notably, shares of Vraj Iron and Steel were trading at a premium of ₹90 in the grey market, indicating strong demand from investors.

The grey market premium (GMP) for Vraj Iron and Steel IPO stood at ₹90 on the final day of bidding, reflecting a positive outlook on the IPO’s potential performance. Market experts attribute this optimism to the robust trend on Dalal Street and favorable market conditions.

By the end of the third day of bidding, the mainboard IPO had garnered a subscription of 119.04 times, with the non-institutional investors segment oversubscribed by 208.81 times and the qualified institutional buyers (QIBs) portion by 163.9 times. Retail investors also showed strong interest, bidding 54.93 times their allocated quota.

Leading financial firms, including GEPL Capital and Ventura Securities, have recommended a ‘subscribe’ rating for the Vraj Iron and Steel IPO. GEPL Capital highlighted the company’s strategic position in Chhattisgarh, where it manufactures sponge iron, M.S. Billets, and TMT bars. The growth potential of the steel industry in India, driven by urbanization and infrastructure development, further adds to the company’s appeal.

Ventura Securities noted that Vraj Iron and Steel’s current manufacturing plants in Raipur and Bilaspur have an aggregate installed capacity of 2,31,600 tons per annum, and expansion plans are underway to increase this capacity. The company is also enhancing its captive power plant capacity, demonstrating a commitment to future growth.

The overwhelming response to the Vraj Iron and Steel IPO underscores investor confidence in the company’s value proposition and growth potential in the steel industry. With the IPO oversubscribed by a significant margin, the company is poised to leverage its strengths and capitalize on emerging opportunities in the market.