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Monday, April 10, 2006

A quick look at AML Steel FPO



AML Steel has filed a draft red herring prospectus, DRHP, with the Securities & Exchange Board of India, Sebi for its forthcoming follow-on public issue, FPO, of equity shares of Rs 10 each for cash at a premium aggregating to Rs 120 crore (Rs 1.20 billion), as per company announcements.

The issue is to be made through a 100% book building process to be conducted on the Mumbai, BSE and National Stock Exchange, NSE.

Of the Rs 120 crore (Rs 1.20 billion) to be raised through the issue, Rs 20 crore (Rs 200 million) would be raised as promoter’s contribution and the balance Rs 100 crore (Rs 1 billion) would be the net offer to public.

The company is raising the money to part finance its wholly owned subsidiary's, integrated steel project being set up in Jharkhand, acquisition of existing steel plants and to fund the working capital requirements of the company and its wholly owned subsidiaries.

The subsidiary has already been allotted 384 acres of iron ore mine in Bokna village in Jharkhand to feed iron ore requirements to the above project.

The book-running lead managers to the issue are Karvy Investor Services and Centrum Capital.

A quick look at AML Steel FPO:

Issue snapshot
Total issue size of Rs 120 crore (Rs 1.2 billion)
Rs 20 crore (Rs 200 million) to be raised through Promotors
Rs 100 crore (Rs 1 billion) to be raised through public
Promoter's holding pre-issue - 74.78%

Company snapshot
Listed on MSE since 1996
Name changed from Ashok Magnetics to AML Steel in 2005

Latest developments
WOS signed a MOU with Jharkhand government for setting up a steel plant
To set up a two million tpa integrated steel plant at Jharkhand
Project to be completed in three phases
Subsidiary has been allotted 384 acres of iron ore mine in Jharkhand

Objects of the issue
Investment in WOS's integrated steel project being set up in Jharkhand
Acquisition of existing steel plants

Financial details

FY05
Net sales at Rs 57.55 crore versus Rs 30.38 crore
Net profit at Rs 2.95 crore versus Rs 0.52 crore
EPS at Rs 9.83

9M FY06
Net sales at Rs 110.97 crore
Net profit at Rs 8.81 crore
EPS at Rs 11.75

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