Prakash industries long products
Wire rods ,TMT rods ,structurals and ferro alloys
Some recent price trends
while this is an old news (Oct’17), can someone explain how much it wud benefit Prakash Industries?
Very detailed report by Mckinsey on Global Steel Industry https://www.mckinsey.com/~/media/McKinsey/Industries/Metals%20and%20Mining/Our%20Insights/The%20current%20capacity%20shake%20up%20in%20steel%20and%20how%20the%20industry%20is%20adapting/The-current-capacity-shake-up-in-steel-and-how-the-industry-is-adapting.ashx
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9C8A5959_ACE1_4F0B_B2B7_7304C1B0616E_081329.pdf (1.1 MB)
Looks like promoters have pledged shares again. Would be helpful if someone can explain this.
They have been talking about reducing debt every quarter!!!
The QIP was supposed to happen but the prices crashed due to Fccb conversion followed by global meltdown. Instead of doing QIP at lower level the probably management decided to take a short term loan which shall be repaid after the QIP. I dont see anything negative and the debt to equity is just 0.3 while other steel companies are in excess of 1. While other steel companies are ready pay higher prices for a stressed asset like Bhushan steel I dont see why a QIP won`t go thru at levels of 250-275.
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Even if this is true, still why take loan from an obscure NBFC and why pledge shares?
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The loan has been taken from Indo Star
IndoStar Capital Finance Limited, a non-banking financial company, provides various financing services to large and mid-sized corporates in India. The company offers secured corporate lending products, including secured structured term loans; and real estate financing products, such as structured loans, as well as loans at project level for construction of commercial and residential properties, including late stage financing for inventory funding. It also provides capital market financing products comprising loans to promoters against listed securities, various unlisted securities, and other tangible collaterals. In addition, the company offers special situation and acquisition financing products consisting of acquisition funding, promoter funding for equity buy back/take outs, family settlements, and asset financing products; and debt capital market products, as well as asset advisory services for debt funds. Further, it provides term loans against property to small and medium enterprises, businessmen, traders, manufacturers, and self-employed professionals. Furthermore, the company provides vehicle finance, including financing new and second hand commercial vehicles, passenger vehicles, and various types of two-wheelers; and affordable home loan products. IndoStar Capital Finance Limited offers its services to the real estate, cement, power, media, entertainment, dairy, financial services, and infrastructure sectors. The company was incorporated in 2009 and is based in Mumbai, India. IndoStar Capital Finance Limited is a subsidiary of IndoStar Capital (Mauritius).
IndoStar Capital Finance has launched vehicle finance and affordable home loan products, which it says will be part of its key business segments.
The Mumbai-based company’s vehicle finance business will be headquartered in Chennai as the company believes it has a favourable business eco-system with the presence of automobile companies and truck financing institutions. “The office was opened today,” said R Sridhar, Executive Vice-Chairman & CEO, IndoStar Capital Finance.
It will focus on financing new and used commercial vehicles, passenger vehicles and some categories of two-wheelers.
In CVs, it intends to focus on mid-segment customers. Also, demand recovery in the CV segment is seen as a positive to grow the business.
The company will open five-six branches in Chennai and has chalked out plans to open about 50 branches across Tamil Nadu by next year. “Overall, our aim is to reach 15 States by 2018,” he added. In September, Indostar launched its housing finance arm, IndoStar Home Finance, headquartered in Mumbai, to focus on affordable and other home loan portfolios.
“The five businesses which we are going to do is corporate lending, vehicle finance, affordable home finance, SME lending and retail home loans,” said Sridhar.
Over the past six years, the company has been lending to corporates and SMEs. Of its asset book size of more than ₹5,000 crore, ₹4,000 crore has been lent to corporates and the rest to the retail business.
Over the last six years, the company has recorded 39 per cent CAGR in total assets and 52 per cent CAGR in total income, which was ₹720 crore in 2016-17. Its profit after tax was ₹211 crore in the previous fiscal.
Published on December 01, 2017
Indostar Reportedly In Talks To Buy 70% Stake In ICICI Home Finance
Jul 4 17
Indostar Capital Finance Limited is reportedly negotiating to acquire as much as a 70% stake in ICICI Home Finance Company Limited. Indostar has offered to pay INR 20 billion for the stake.
I think it is relatively good finance company. The main thing is that at what rate they are borrowing, on the contrary if I am getting loan from any non reputed financial institution at 7% and from SBI or HDFC at at 8% , i would prefer the former.
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In my opinion whatever happens, happens for the good.
The company might have proposed to bring the QIP at around Rs 250, however due to market turmoil the price went down to levels below 200. It is obvious that the institutions subscribing for QIP would have no longer been interested for QIP @250. (when the market price is around Rs 200)
In my opinion the company would be generating sufficient cash flows to take care of the debt raised by it. So it is good that there is no dilution of equity.
Secondly those institution who had proposed for subscribing for QIP would have directly purchased or are still purchasing directly from the market which has helped the stock to resist any fall below 200. The recovery was also very sharp and I think the stock may also reach back to levels of 240 to 250 because the institutions had already assessed their investment @250. For them it hardly matters whether they buy shares directly from the market or from QIP route.
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Nice digging. But one thing, no NBFC can offer better rates than a deposit accepting bank. This loan must be priced somewhere between cost of debt and equity, around 11-13%.
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China city to extend winter bans https://mobile.reuters.com/article/amp/idUSKBN1FT1OD?__twitter_impression=true
Meeting on 15th to announce warrants issue.
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Tata Steel EBIDTA per ton was around Rs 14092 per Ton ,even if we discount it by 30% i.e Rs 10000 per ton for Prakash and at 90% capacity utilisation we can get EBIDTA of 800 to 900 Cr.
Research report on steel sector
http://www.motilaloswal.com/site/rreports/HTML/636522091293709678/index.htm
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That seems to be a research report on PSUs and not steel.
Prakash Industries to set up new plant to produce Pellets, this might be the reason of promoters pledging shares recently to take the loan.
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Thanks for pointing now edited was reading both reports at same time
Think this is in line with guidance shared for the first time via Q3 presentation:
@hafizul88/All: By any chance someone has paid subscritption to steelMint? Will be interesting to know overall as well as yearly projection of capex. Also what is the phase wise ramp plan?
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Though company is making profit, why it does not pay any taxes? When will it be required for company to pay?
