On Monday, September 16, Sandur Manganese and Iron Ores announced a significant financial maneuver as its board of directors sanctioned a proposal to raise up to ₹1,000 crore through the issuance of equity shares via a Qualified Institutions Placement (QIP). This decision was made during the board’s 374th meeting and involves issuing equity shares with a face value of ₹10 each. These shares will be distributed in one or more tranches, as per the proposal.
The fundraising endeavor will be executed at a price determined in accordance with prevailing regulations, and the shares will be made available to qualified institutional buyers. The implementation of this proposal is contingent upon receiving the necessary approvals from shareholders as well as regulatory authorities. This strategic move is intended to bolster the company’s financial standing and support its growth initiatives.
Earlier this year, in April, Sandur Manganese’s board had also approved a major strategic acquisition involving Arjas Steel Pvt. Ltd. The company decided to acquire an 80% stake in Arjas Steel, marking a significant expansion in its business portfolio. The remaining 19.12% stake in Arjas Steel will be acquired by BAG Holdings Pvt. Ltd., an entity associated with one of the company’s promoters, Bahirji A. Ghorpade. As of March 31, 2024, Ghorpade held a 3.1% stake in Sandur Manganese.
The financial specifics of this acquisition have not been publicly disclosed. However, the company has noted that the Enterprise Value of Arjas Steel is estimated at approximately ₹3,000 crore. Consequently, the cost to acquire the 80% stake will be determined based on customary and mutually agreed adjustments to the enterprise value on the closing date of the transaction.
Sandur Manganese anticipates finalizing this acquisition within a period of seven months, provided that the customary closing conditions outlined in the Share Purchase Agreement (SPA) are met. Notably, the acquisition is expected to be free from the need for additional regulatory approvals, except for those required by the Competition Commission of India (CCI).
The company, Sandur Manganese and Iron Ores Ltd., operates in the sectors of manganese and iron ore mining, power generation, and the manufacturing of ferroalloys and coke. This diversified business model underpins its strategic decisions and financial maneuvers, reflecting its commitment to expanding its market presence and operational capacity.
As of the latest trading data, shares of Sandur Manganese and Iron Ores Ltd. closed at ₹489.30, reflecting a decline of ₹10.25 or 2.05% on the Bombay Stock Exchange (BSE). This dip in share price underscores the volatile nature of the stock market and the potential impact of major corporate decisions on stock performance.
Sandur Manganese and Iron Ores Ltd. is a diversified firm engaged in the mining of manganese and iron ore, power generation, and the production of ferroalloys and coke. The company aims to enhance its market position through strategic acquisitions and financial initiatives, including raising capital via Qualified Institutions Placement (QIP) and expanding its business portfolio.
