Sky Alloys and Power Limited IPO

01At a glance

What the company does: makes sponge iron, mild-steel billets, TMT bars and ferro alloys (silico-manganese) at an integrated plant in Raigarh district, with a captive power plant and new solar plants; it also trades billets, sponge iron, coal and manganese ore (AP p.3, AP p.4, DRHP p.48).

Who pays it: other steel makers, directly and through brokers, and TMT buyers directly, through brokers and through OEM sales, in 18 states; Chhattisgarh was 70.05% of revenue in the nine months to December 2025 (AP p.4, AP p.11). The top ten customers were 33.15% (AP p.4).

Why it is raising money: ₹1,900 million to repay borrowings, and the rest for general purposes (AP p.7).

How fast it has grown: revenue from ₹5,537 million in FY23 to ₹8,192 million in FY25, and profit from ₹376 million to ₹530 million; profit was ₹250 million in the nine months to December 2025 (AP p.8).

The one thing to understand: a cyclical commodity producer that has borrowed to move up the value chain, and carries a tax history. Borrowings more than doubled from ₹1,323 million in FY23 to ₹3,111 million, and the company, promoters and former directors were searched by the income-tax department in December 2021 (AP p.8, DRHP p.31).

02The business, in plain words

An integrated steel plant turns iron ore and coal into sponge iron, melts it into billets, and rolls billets into TMT reinforcement bars for construction. Each step adds value; the plant can also market the intermediate products. Profit follows steel prices and the cost of ore, coal and power.

A builder in Chhattisgarh needs TMT bars → it orders through a broker → Sky Alloys makes sponge iron, melts it into billets and rolls the billets into bars at Raigarh → the builder pays per tonne.

The company started with sponge iron in 2013, added ferro alloys in 2014, billets in 2015 and a 95,000-tonne TMT rolling mill in FY24; it raised its captive power capacity from 16 MW to 20 MW in FY25 and built solar plants in FY26 (AP p.3, DRHP p.48).

Earnings equation: Profit ≈ tonnes × (steel price − ore, coal and power cost) − interest. EBITDA margin was 12.69% in the nine months to December 2025 (AP p.9).

03Where the money comes from

Source: AP p.3, AP p.4. Traded lines are our sum of two rows. Coal and ore sales, services and by-products make up the rest.

The company also books a small "commission on corporate guarantee" as revenue: ₹30 million in FY25 (AP p.4).

Source: AP p.4.

04The growth record

Source: AP p.8, AP p.9.

Return on capital employed was 18.67% and working-capital days 27 in FY25 (AP p.9); other income of ₹18.52 million was 2.6% of FY25 profit before tax of ₹715.95 million (our arithmetic, DRHP p.81), and debtor days rose from 8 in FY23 to 21 in FY25 (DRHP p.61).

05What the growth is made of

The TMT mill changed the mix: billets fell from 61% of revenue in FY24 to 5% in the nine months to December 2025, as they were rolled into bars, and TMT rose to 40% (AP p.3). FY25 revenue was also lifted by ₹1,828 million of traded billets (AP p.3). Return on equity fell from 38.15% in FY23 to 27.59% in FY25 as equity grew faster than profit (AP p.8, AP p.9).

06Earnings quality

Operating cash flow fell to ₹51 million in FY25 against profit of ₹530 million, and working-capital days rose from 25 to 40 (AP p.8, AP p.9). Investment outflows totalled about ₹2,462 million over FY23 to the nine months to December 2025 (our arithmetic, AP p.8). The auditors' qualifications have been given effect in the restated financial information (AP p.12).

07The balance sheet

Source: AP p.8, AP p.9.

Equity share capital fell from ₹692.62 million to ₹465.11 million in FY25 after a capital reduction ordered by the NCLT, Cuttack, which extinguished shares held by a promoter selling shareholder and a promoter-group member (AP p.8, AP p.11). Contingent liabilities were ₹959.69 million at December 2025, of which ₹924.56 million is income-tax litigation (DRHP p.84).

08What the money is for

Source: AP p.7.

09Who is selling

Source: AP p.1, AP p.11. The offer is a fresh issue of up to 16,084,000 shares and an offer for sale of up to 1,807,000 shares (DRHP p.97).

10Promoters

The promoters are Ravi Singhal, chairman and managing director since incorporation, with over 25 years of experience and directorships in Sky Steel & Power and Sky Care Foundation; Sandeep Agrawal and Vikas Agrawal, executive directors; Nisha Singhal; and Vinay Kumar Agrawal (AP p.6, AP p.12). The board has three independent directors (AP p.12). The document lists no proceedings against the promoters (DRHP p.40).

11Who already owns it

Source: AP p.7.

Promoters and promoter group hold 96.11% (AP p.7, our arithmetic). Vikas Agrawal received 2,550,100 shares by gift (AP p.12). The document names the 1.06% holder as Hira Steels Limited (DRHP p.113).

12What changed just before the IPO

• Tax appeals: in April 2026 the Commissioner of Income Tax (Appeals) ruled for the company on search-related demands, which now stand at nil; penalty proceedings continue (DRHP p.31).
• Capital reduction: NCLT-ordered, extinguishing some promoter-side shares (AP p.11).
• Solar: Raunda plant commissioned and Keshdabri plant set up; the Mopka plant is being built (DRHP p.48, AP p.11).
• Borrowings: up ₹415 million in nine months (AP p.8).
• Shares, status and auditor: the last allotment was a private placement at ₹97 a share in September 2025; the company became a public limited company in October 2022, and Laxmi Tripti and Associates replaced Dinesh Aarjav and Associates as statutory auditor in 2023 (DRHP p.106, DRHP p.260, DRHP p.91).

13Capacity and expansion

The Raigarh plant makes sponge iron, billets, TMT bars and ferro alloys, with a 20 MW power plant (AP p.3, DRHP p.48). The Mopka solar plant, 22 MW DC / 17.10 MW AC, carries time and cost overrun risk (AP p.11, DRHP p.7). No capacity is funded from the proceeds.

14Market size and industry structure

The CRISIL report cited in the offer document says India's steel demand grew from 100.2 million tonnes in FY20 to 152 million tonnes in FY25, and that long products such as bars rose to 55.2% of output (AP p.6). The document calls steel demand and pricing cyclical (AP p.11).

15Competitive position

What the document claims, and what it rests on:

• Integration from sponge iron to TMT bars, with captive power (AP p.3).
• Location near raw materials in Raigarh (AP p.3).

Against that: a single-state market, no long-term customer contracts, and much larger listed peers (AP p.4, AP p.11, DRHP p.150).

16Peers the company named

Source: DRHP p.150. Peer P/E uses prices on 19 June 2026.

No P/E is possible for the company until a price band is set.

17Risks, in plain words

• Tax. Search-related assessments, penalties and a challenge to a 2021 Settlement Commission order (AP p.10, DRHP p.31).
• Steel cycle. Prices and demand swing (AP p.11).
• Chhattisgarh. 70 to 83% of revenue (AP p.4).
• Share history. Allotments at different prices and past filing errors (AP p.11).
• Solar project. Cost and time overruns at Mopka (AP p.11).
• Suppliers. Top ten suppliers were 57.60% of FY25 purchases (AP p.11).

18Litigation and regulatory matters

Source: AP p.12, AP p.13.

A search in December 2021 covered the company, four promoters, promoter-group members and two former directors; the resulting demands against the company for assessment years 2017-18 to 2022-23 totalled about ₹481 million (our arithmetic) before the appellate orders reduced them to nil (DRHP p.31). An earlier Settlement Commission order of January 2021 is under challenge by the tax department in the Chhattisgarh High Court (DRHP p.31).

19Related-party transactions

Not read in detail for this study. Ravi Singhal is also a director of Sky Steel & Power (AP p.6).

20What the offer document does not say

In the sections read for this study, the document does not give:

• Whose borrowings the corporate-guarantee commission relates to, in the pages read.
• Production volumes and capacity use by product, in the pages read.
• Why the NCLT capital reduction was undertaken and what shareholders received.
• The status of the penalty proceedings in rupees.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. For whom has the company given the corporate guarantees that earn it commission?
2. What was the purpose of the capital reduction, and what did the affected shareholders receive?
3. Has the tax department appealed the April 2026 orders, and what penalties are sought?
4. Why did operating cash flow fall to ₹51 million in FY25?
5. How much of FY25 revenue came from trading rather than manufacturing, and at what margin?

2Sources and cited facts

This study was read from 2 documents the company filed. The 55 figures it cites are listed under the document each came from, with the page and the sentence as printed.