Avtar Steel files draft IPO papers with Sebi to raise Rs 585 crore through fresh issue

Avtar Steel Ltd, a manufacturer of stainless-steel long and wire products, has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (Sebi), proposing to raise Rs 585 crore through a fresh issue of equity shares. The issue will also include an Offer for Sale (OFS) of up to 50 lakh equity shares by a promoter selling shareholder.

According to the DRHP, the company's key customers include Bansal Wire Industries Ltd, Goodluck India Ltd, Stellaris Specialities India Ltd, Vividh Wires Ltd, Ivy Creations UK Ltd, Goodluck Defense and Aerospace Ltd, and Victura Technologies Pvt Ltd.

The company plans to use the net proceeds from the fresh issue for three purposes.

A portion will be used to part-finance capital expenditure for the construction of a Specialty Steel Melting Division. The proposed facility will manufacture special steel, including alloy steel, carbon steel and valve steel, as well as stainless-steel blocks and blooms.

The proceeds will also be used for expansion of stainless-steel wire capacity at the company's existing Wire Rod and Bar Division.

Another portion of the proceeds will go towards repayment or pre-payment, in full or in part, of certain outstanding borrowings availed by the company. The remaining funds will be used for general corporate purposes.

The equity shares offered through the issue are proposed to be listed on BSE and NSE. Systematix Corporate Services Ltd and Elara Capital (India) Pvt Ltd are the book-running lead managers to the issue.

Avtar Steel has more than three decades of experience in manufacturing and developing stainless-steel long and wire products, including special grades. The company expanded into international markets in 2010.

Its product portfolio includes stainless-steel long and wire products used across industries such as automobiles, oil and gas, defence, aerospace, water solutions, energy, shipping, fabrication and construction, chemicals, and food and dairy.