Multibagger SME IPO Stock Declaring Bonus Shares and Stock Split this Week. More Details Inside...

Indian steel stocks have seen a sharp rise lately as the industry has witnessed robust demand because of rising steel prices globally. The other factor ailing steel stocks is the government's continued focus on infrastructure.

Steel demand hit through the roof in 2022, and resultantly, select steel companies saw their revenues surge multifold.

The Indian government is seeking to modernise roads, rail networks, and ports to compete with China as a manufacturing hub.

According to the World Steel Association, India's steel demand could soar to 200 million by 2030. This will make India the highest steel consumer among major economies.

While we know the big names including Tata Steel, JSW Steel and the likes, are you aware of any small steel company making a breakthrough?

One such steel stock from the SME space has delivered multibagger returns of over 780% in the past six months.

The steel company in question is Rhetan TMT.

The company is all set to trade ex-bonus and undergo stock split this week on 10 March 2023.

Here's all you need to know about the company's bonus issue and stock split.

• Rhetan TMT announced bonus shares and a stock split on 27 January 2023.
• The company will issue bonus shares in a ratio of 11:4. This means eleven bonus shares for every four existing shares.
• In addition to the bonus shares declaration, the board has also approved the stock split in a ratio of 1:10. This means that a fully paid-up equity share with a face value of Rs 10 will be split into ten fully paid-up equity shares of Rs 1 each.
• The record date for the same is 10 March 2023.

This is the first time this smallcap company is issuing bonus shares and is undergoing split.

The company was listed in 2022 and since then, it has seen a sharp rally.

Now, the company wants to enhance liquidity of shares and widen the shareholder base by undergoing stock split.

Post the bonus issue and stock split, the paid-up share capital of the company will stand at Rs 5.8 billion (bn).

A look at the company's financials

For the September 2022 quarter, the company reported revenue of Rs 33.2 million (m). Meanwhile, the net profit for the September 2022 quarter came in at Rs 1.4 m.

Over the last three years, the company's revenue has grown at a CAGR of 49%, while net profit has grown at a CAGR of 59%.

Higher growth in volumes and realisations has aided the earnings.

Rhetan TMT Financial Snapshot

Particulars	2019-20	2020-21	2021-22
Total Revenue (Rs in m)	201	521	670
Growth (%)	-	159	28
Operating profit (Rs in m)	2.9	3.1	6.9
Operating profit margin (%)	2.9	3.1	6.9
Net profit (Rs in m)	-6	1	23
Net profit margin (%)	-2.9	0.3	3.5

Source: Equitymaster

The company has been deleveraging its balance sheet, and the debt to equity has declined from 3.4x in 2021 to 1.17x in 2022.

The company is further expected to benefit from a pick-up in construction activity.

Also, the removal of export duty on steel products will help domestic metal producers pull up their profits by now having the freedom to explore overseas markets.

How shares of Rhetan TMT have performed recently

The share price of Rhetan TMT is up by 33% in the past one month.

Since its listing in September 2022, it has given multibagger returns of 670%.

The company touched its 52-week high of Rs 513 on 3 March 2023 and its 52-week low of Rs 50.7 on 9 September 2022.

About Rhetan TMT

Incorporated in 1984, Rhetan TMT manufactures fabricated metal products. The company offers TMT and round bars, rolled bars, and other steel products.

Rhetan TMT is part of a Gujarat-based diversified business group promoted by Mr Shalin Ashok Shah and his family.

The group has business interests in various sectors, including Oil and Gas, Steel, Infrastructure, Electronic Equipment, and Chemical Products.

Its products are used in the construction of dams, bridges, residential and commercial towers and major infrastructure projects in Gujarat. The plant is located at Mehsana, in Gujarat.

The company owns and operates a Steel Rolling Mill with a 30,000 MTPA installed capacity.

To know more about the company, check out its Rhetan TMT company fact sheet and quarterly results.

You can also compare Astral with its peers:

Rhetan TMT vs Aditya Ispat

Rhetan TMT vs Ankit Metal

For the companies with long history of issuing bonus shares, check out 5 Indian companies which have consistently declared bonus shares.

Also check out 5 stocks to watch out for bonus shares and stock split in March 2023.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...