Hem Sec: IPO advice: Gallantt Ispat Ltd. - Avoid

The objects of the Issue are :
1) To part finance the integrated steel plant consisting of the following
modules
• Sponge Iron Plant with a capacity of 99,000 MTPA
• M.S Billets with a capacity of 1, 62, 380 MTPA
• Re-Rolled Products with a capacity of 1, 67, 400 MTPA
• Captive Power Plant with a generating capacity of 16 MW
2) To part finance the Flour Mill with a capacity of 1, 80,000 MTPA.
3) Listing of securities on Stock Exchanges
Valuation
The company is bringing the issue at Rs 50 per share. Company has
incurred losses in last few years. As Company has commenced
commercial productions for Mild steel billets, Re-Rolled products
(TMT bars) in May 2009 and wheat flour products in March 2009 only ,
hence company has very limited track record history . Also, Company
is solely dependent on the markets in Uttar Pradesh for the sale of all
of its products that is sponge iron, mild steel billets, re-rolled products
(TMT bars) and wheat flour products which exposes the company to
risk of business concentration.
Hence looking after all above, we recommend investors to “Avoid“
the issue.