(i) Electrosteel Steels Ltd has set up 2.51 Million Ton Per Annum (MTPA) Greenfield Integrated Steel Plant near Siyaljori village, in the Bokaro district of Jharkhand. It primarily consists of a Sinter Plant, Coke Oven, Blast Furnace, Basic Oxygen Furnace, Billet Caster, Wire Rod Mill, Bar Mill, and Power Plant. ESL has established excellence at every stage of production by bringing international expertise and solutions from reputed manufacturers. Along with the latest technology, the plant operates in synchronization with the highest ecological standards.
(ii) The Company’s product range includes Pig Iron, Billets, TMT Bars, Wire Rods and Ductile Iron Pipes.
(iii) NCLT Case:
Due to huge debt on the company, the banks took the company to NCLT as they were unable to pay its debt obligation. And in the NCLT, Vedanta acquired the company. The following restructuring was done in the company.
a) The Board of the Company has been reconstituted on June 4, 2018, i.e. the effective date with nominees of Vedanta being inducted as a member of the Board.
b) Vedanta Star Limited (a wholly-owned subsidiary of Vedanta Limited) has on June 04, 2018, deposited Rs. 532,000.00 lakh in an escrow account (“Escrow Account”) of the Company for payment to financial creditors of the entire amount of sustainable debts in terms of the ARP out of total Outstanding amount of Rs. 12,71,913.21 lakhs and the same has been remitted to them on June 21, 2018.
c) 739,91,32,055 equity shares of Rs. 10 each were allotted on June 6, 2018, to financial creditors converting the non-sustainable debt to equity.
d) On June 14, 2018, the existing 980,83,67,078 equity shares including those allotted on June 6, 2018, to financial creditors as above have been reduced from Rs. 9,80,836.71 lakhs to Rs. 19,616.73 lakhs divided into 980,83,67,078 equity shares of Re. 0.20 each fully paid-up.
Simultaneously, 50 such shares of Re 0.20 each thereafter have been consolidated into 1 fully paid-up equity share of Rs. 10 each. The amount of Rs. 9,61,219.97 lakhs reduced as above in compliance with the Order of Hon’ble NCLT has been credited to Capital Reserve.
e) On June 15, 2018, 176,55,06,078 fully paid equity shares of Rs. 10 each were allotted to Vedanta Star Limited against the money deposited in Escrow Account, leaving the balance of Rs. 355,449.39 lakhs to be considered as long term interest-bearing loan.
f) Consequent to the above allotment and consolidation of shares, the equity share capital of the company stands at Rs. 19,61,67.34 lakhs divided into 196,16,73,420 equity shares of Rs.10 each. (ARP) by NCL
(iv) And finally, the company was acquired by Vendanta in 2018 and delisted the company from exchanges. The delisting price offered was Rs.9 per share. From thereon, the company has performed really well in terms of financials.
(v) When the Electrosteel was delisted, the EV was around 5300 Cr.
Business Performance of ESL Unlisted Share in Fy21-22
1. In FY22, ESL produced the most hot metal ever (1.355 MT, up 5% YoY), as well as the most saleable amount ever (1.260 MT, up 6% YoY).
2. EBITDA margins have shrunk by 20% year over year, mostly as a result of rising iron ore prices and an unusual rise in the price of coking coal over the year.
3. To reduce the cost of iron ore (the raw material used to make a steel) the ESL has acquired 2 mines namely (i) Nandidih Iron ore Block (BICO) & (ii) Nandidih Iron Ore & Manganese Block (FEEGRADE) in Barbil, Odisha through the auction process conducted by government of Odisha. This will give them backward integration facility for making steel.
4. In the year FY22, the prices have been impacted by global economic slowdown, Russia – Ukraine war, the emphasis on development projects, demand-supply forces, and government spends and policies. The company is expecting that Steel demand will remain stable in 2022 and there will be sharp correction in prices of Coking coal and iron ore prices.
5. In the month of May-22, Government has imposed export duty on the products i.e.- Pig iron, TMT & Wires rod and increased export duty on all grades of iron ore. Government has also removed duty on coking coal. Removal of import duties on coking coal and increase in export duty for iron ore will ease cost of production for steel. However, imposition of export duty on steel will have negative effect on domestic steel price sentiment.
|Total Available Shares:||Not Available|
|Face Value:||₹ 10 Per Equity Share|
|Lot Size:||1000 Shares|
|Current Unlisted Share Price:||₹ 44 Per Equity Share|
|Retail Discount:||Bulk Deal (1%)|
|Particulars (in Cr)||Fy22||Fy21|
|Cost of Material Consumed||4591||2682|
|Change in Inventory||-250||130|
|Employee Benefit Expenses||161||154|
|Particulars (in Cr)||Revene||OPM||PAT||NPM||EPS||P/E|
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