Vraj Iron and Steel Limited (MAINBOARD)

Financial Statement (Restated)

About Company

Vraj Iron and Steel Limited, incorporated in June 2004, is a prominent manufacturer of Sponge Iron, M.S. Billets, and TMT bars under the Vraj brand. Operating two manufacturing plants in Raipur and Bilaspur, Chhattisgarh, the company covers a sprawling 52.93 acres. As of March 31, 2023, the total installed capacity of these plants was 231,600 tons per year, encompassing both intermediate and final products. Vraj boasts a production capacity of 57,600 TPA of MS Billets, utilized by its rolling mills to produce TMT Bars with a capacity of 54,000 TPA. Their product portfolio includes Sponge Irons, TMT Bars, MS Billets, and by-products like Dolochar, Pellets, and Pig Iron, serving a diverse clientele of industrial customers and end-users. The Raipur Plant has achieved the ISO 14001:2015 Environmental Management System Certification, underscoring its commitment to environmental standards. As of June 30, 2023, the company employs a workforce of 533, comprising 298 permanent employees (7 at the Registered Office, 200 at the Raipur Plant, 87 at the Bilaspur Plant) and 235 contract workers.

Strength Factors

Integrated Manufacturing Setup: Vraj Iron and Steel Limited benefits from a well-established, integrated manufacturing setup, with strategically located plants in Raipur and Bilaspur, Chhattisgarh. This strategic location, supported by robust architecture, enhances cost efficiencies and ensures a stable supply chain.

Diverse Product Portfolio: The company's diverse product portfolio, which includes Sponge Iron, TMT Bars, MS Billets, and by-products like Dolochar, Pellets, and Pig Iron, caters to a broad mix of industrial customers and end-users, providing a balanced revenue stream and market resilience.

Environmental Certification and Skilled Workforce: The Raipur Plant's ISO 14001:2015 Environmental Management System Certification highlights Vraj's commitment to environmental standards. Additionally, a skilled workforce of 533 employees, including 298 permanent staff, supports efficient operations and consistent production quality.

Risk Factors

Geographical Concentration: Both existing manufacturing facilities and the upcoming Expansion Project are located in Raipur and Bilaspur, Chhattisgarh, which exposes Vraj Iron and Steel Limited to geographical concentration risks, including regional economic downturns, natural disasters, and political instability.

Negative Cash Flows: The Company has experienced negative cash flows from operating, investing, and financing activities in the recent past, with potential for continued negative cash flows in the future. This financial instability poses risks to ongoing operations and future growth.

Funding Risks for Expansion: the Expansion Project at Bilaspur is dependent on raising sufficient funds from the Net Proceeds of the Issue. Any shortfall in funding could adversely impact the company's growth plans, operations, and overall financial performance.