Shares of this newly listed iron and steel manufacturing stock surged over 3 percent to Rs.253.45 per share after signing a three-year agreement with NTPC Ltd for the supply of iron ore.
Share Price Movement
In Wednesday’s trading session, Vraj Iron and Steel Limited‘s share price reached an intraday high of Rs.253.45 per share, rising 3.3 percent from its previous close of Rs.245.30 apiece. The share has retreated since then and is currently trading at Rs.243.55 per share.
What happened
Vraj Iron & Steel Ltd has signed a Long-Term Agreement (LTA) with NMDC Limited on October 7, 2024, for the procurement of iron ore lump over the next three years.
The agreement aims to meet Vraj Iron & Steel iron ore requirements, with the quantity to be delivered reviewed annually, based on availability at NMDC’s mines. Vraj Iron & Steel holds no shares in NMDC Limited.
The purchase of iron ore is conducted in the normal course of business and on an arm’s length basis. However, the transaction amount under the agreement may exceed the threshold limit depending on the availability of iron ore.
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Capacity Enhancement
Vraj Iron and Steel Ltd is a leading producer of sponge iron, MS billets, and TMT bars, with two plants in Chhattisgarh that have a combined annual capacity of 2,31,600 tons. The company is expanding its operations and plans to increase its captive power plant capacity from 5 MW to 20 MW to support its growing production needs.
Shareholding Pattern
As per the June 2024 shareholding pattern, the promoters of Vraj Iron and Steel Limited hold a 74.96 percent stake, while Foreign Institutional Investors hold a 2.64 percent stake. Domestic Institutional Investors and Retail investors hold a stake of 6.26 percent and 16.14 percent, respectively in the company.
Financial Performance
In its latest financial update, the company reported net sales of Rs.115 crore for Q1 FY25, a 8.5 percent increase from Rs.106 crore in Q1 FY24. Net profits remained stable at Rs.16 crore in Q1 FY25, when compared to the same quarter in FY24.
Company Profile
Vraj Iron and Steel Ltd is a leading manufacturer in the Indian steel sector, specialising in sponge iron, M.S. billets, and TMT bars. The company is dedicated to producing high-quality steel products that meet industry standards and cater to various market needs.
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Written by – Siddesh S Raskar
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