Super Iron Foundry shares hit 5% lower circuit after a flat market debut on BSE SME

Shares of West Bengal-based small and medium enterprise (SME) Super Iron Foundry Ltd made a lacklustre trading debut today, March 19, with the stock listing flat compared to its issue price.

The Super Iron Foundry stock opened the session at ₹107.95 apiece on the BSE SME platform against its initial public offering (IPO) price of ₹108 per share. Within minutes of the opening of the session, the share price dropped as much as 5% to hit the lower circuit limit of ₹102.6 apiece.

Soon after listing, as many as 22.08 lakh shares of the company changed hands on the bourse, leading to a total turnover value of ₹23.8 crore. The market capitalisation of Super Iron Foundry Ltd stood at ₹240.02 crore.

As the minimum bid quantity to apply for the Super Iron Foundry IPO was 1,200 shares, bidders, who were allotted shares in the primary issue, saw value erosion of ₹60 per lot (₹0.05 x 1,200) as soon as the stock listed on exchanges.

The ₹68.05-crore BSE SME IPO of Super Iron Foundry was open for bidding from March 11 to March 13. The issue was subscribed just around 1.61 times during the three-day window, with bids received for over 96.79 lakh shares against 59.85 lakh shares on offer.

The Super Iron Foundry IPO was a fixed-price issue. It was made up entirely of a fresh issuance of 63.01 lakh shares of face value of ₹10 each, with no offer-for-sale (OFS) component.

The company had fixed the price of shares at ₹108 apiece, while the lot size was kept at 1,200.

Horizon Management Pvt. Ltd was the book-running lead manager of the issue, while Link Intime India Pvt. Ltd was the registrar. Meanwhile, the company had appointed Giriraj Stock Broking Pvt. Ltd as the market maker.

Super Iron Foundry is a producer of various iron casting products used in sectors such as construction, roadway construction, telecom and utility networks. These products are also used in agricultural and automotive equipment.

The company manufactures foundry cast-iron counterweights, municipal castings, ductile iron pipe fittings, railway castings, ductile iron automotive castings, and ductile iron agricultural castings.

Super Iron Foundry had said earlier that it would use the IPO proceeds for funding working capital needs, debt repayment and for general corporate purposes.

As per the red herring prospectus (RHP) filed by the company to the Securities and Exchange Board of India (Sebi), the company will utilise ₹29 crore for meeting working capital requirements and around ₹16 crore for pre-payment or scheduled repayment of secured loans availed from UCO Bank and Tata Capital Ltd. The remaining ₹15.2 crore would be allocated for general corporate purposes.

For the first nine months of the current financial year 2024-25, Super Iron Foundry reported a profit after tax (PAT) of ₹9.52 crore on revenue of ₹44.98 crore for the period.

Before that, for the full financial year 2023-24, Super Iron Foundry had posted a PAT of ₹3.94 crore compared to ₹1.28 crore in FY 2022-23. Revenue stood at ₹68.04 crore in FY24 against ₹55.32 crore in FY23.