Kamdhenu soars 41% in one week ahead of Board meet for fund raising

Shares of Kamdhenu hit a new high of Rs 492.40 as they surged 10 per cent on the BSE in Friday's intraday trade. 
 

In the past one week, the stock of the iron & steel company has soared 37 per cent ahead of its board meeting on Saturday, January 13, to consider fund raising plan.Besides, in the past one month the stock has zoomed 73 per cent.
 

A meeting of the Board of Directors of Kamdhenu is scheduled to be held on Saturday, January 13, 2024, to consider and approve the proposal for fund raising by way of issue of equity shares/convertible warrants and/or any other instruments through preferential issue on a private placement basis, the company said in an exchange filing on January 9.
 

The fund raising is subject to such regulatory or statutory approvals as may be required including the approval of the shareholders of the company, it added.
 

As on September 30, 2023, out of 41.26 public holding, individual shareholders held 28.88 per cent stake in Kamdhenu, shareholding pattern data shows.

The company is the market leader in branded TMT Bars and 'Kamdhenu TMT Bar' is the largest selling TMT Bar in India, in the retail segment with brand sales turnover of Rs 21,000 crore in FY23.

In India, the demand for TMT steel bars is on an upward trajectory, spurred by robust construction activities in both urban and rural areas. These bars are favored for their strength and durability, making them essential for infrastructure development and real estate projects. As the nation continues to invest in modernisation and building resilient structures, the demand for TMT bars is expected to maintain its strong growth momentum.

For the first half (April to September) of the financial year 2023-24 (H1FY24), Kamdhenu had reported 3 per cent year-on-year (Y-o-Y) growth in revenue at Rs 393.6 crore. Profit after tax grew 22 per cent Y-o-Y at Rs 22.2 crore. The company's Ebitda margin improved to 7.4 per cent from 7.2 per cent in H1FY23.

Meanwhile, steel companies in India have been committed to modernising and adopting advanced technologies for steel production. The industry is also experiencing consolidation through mergers, acquisitions, and alliances. Many Memorandums of Understanding (MoUs) are being signed to encourage investment in the steel sector.

"The Indian Government has taken several measures to support the steel industry, such as reducing import duties on raw materials and implementing the Goods and Services Tax (GST) to streamline the tax structure. These steps, coupled with increasing urbanisation and the Government’s focus on infrastructure development, are positioning the Indian steel industry for further growth," Kamdhenu sair in its FY23 annual report.

The Government Production Linked Incentive (PLI) for Specialty Steel Sector aims to promote manufacturing of specialty steel in India through capital investment, employment generation and technology upgradation, thus reducing dependence on imports in meeting the domestic demand, due to which 85 per cent of domestic demand is met by 18 per cent of steel produced in India and the balance is met through imports, the company said.