German Green Steel files draft papers with Sebi for Rs 450 crore IPO

Gujarat-based German Green Steel and Power Ltd has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) to initiate an initial public offering (IPO) valued at Rs 450 crore. The offering comprises a fresh issue of shares worth Rs 450 crore and an offer for sale of 20 lakh equity shares by promoters Inamulhaq Shamsulhaq Iraki and Abdulhaq Shamsulhaq Iraki.

The proceeds from the fresh issue include Rs 325.21 crore earmarked for capital expenditure (capex) to expand the company's manufacturing facility at Samakhiyali, Kutch, Gujarat, and a hybrid wind and solar power project. In addition, Rs 55.01 crore will be used to repay certain borrowings, with the remaining funds allocated for general corporate purposes.

German Green Steel and Power, a vertically integrated iron and steel manufacturer, operates mainly in Gujarat with a significant market presence through its brand "German TMT" for TMT Bars. The company's product portfolio includes TMT Bars, MS Billets and Sponge Iron.

According to the DRHP, the company's revenue from operations has grown at a CAGR of 12.53 per cent from Rs 892.25 crore in Fiscal 2022 to Rs 1,129.78 crore in Fiscal 2024. EBITDA saw a CAGR of 43.04 per cent, improving from Rs 39.15 crore to Rs 80.11 crore over the same period, showcasing robust operational performance with an EBITDA margin increase from 4.39 per cent to 7.09 per cent.

The IPO is structured through a book-building process, with allocations of up to 50 per cent for qualified institutional buyers (QIB), a minimum of 15 per cent for non-institutional bidders and 35 per cent for retail individual bidders. The company may consider a pre-IPO placement of up to 20 per cent of the fresh issue, which would reduce the fresh issue size if undertaken.

As of December 31, 2024, around 67.72 per cent of German Green Steel's energy needs are met by its captive power and renewable energy plants. The company plans to further decrease reliance on external power sources by constructing an additional hybrid wind and solar plant.

German Green Steel and Power conducts most of its business on a B2B basis, serving distributors, dealers and institutional customers in sectors like roadways, engineering services and real estate. The company has a focused marketing strategy to reach corporate and institutional clients directly.

Syestematix Corporate Services Ltd and Emkay Global Financial Services Ltd are acting as the book-running lead managers to the offer, while Bigshare Services Pvt Ltd is the registrar. The equity shares are proposed to be listed on both BSE and NSE.