Nevertheless, the company is tapping the public at a time when the IPO market for manufacturing firms has almost dried up. As the small investors have become more cautious with such issues, the offer may face difficulty in sailing through.

The company is offering 20 lakh equity shares of Rs 10 each at par. The company is now mobilising resources for part-financing a diversification project. Haryana Financial Corporation and HSIDC have jointly appraised the project and estimated cost at Rs 8.51 crore. Besides the public issue, the project cost is being met through promoters' contribution of Rs 1.2 crore, term loans of Rs 2.68 crore from HFC, Rs 70 lakh from HSIDC, Rs 40 lakh from SBI, Rs 1 crore as unsecured loans and Rs 53 lakh from internal accruals. The unsecured loans are being raised from promoters' relatives and friends.

At present, the companymanufactures stailness steel strips with a total capacity of 1800 mt and mild steel 8000 mt. Now, the company is diversifying into the manufacture of steel alloys by setting up a manufacturing facility at Bhiwadi, Haryana with a total capacity of 18,00 tpa. The company has already deployed Rs 5.22 crore in the project.

The company's capacity utilisation had been very poor in the past. As on March 31, 1997, the capacity utilisation in mild steel had been at 6.6 per cent and stainless steel at 60.68 per cent.

For the fiscal 1997, the company had recorded a net profit of only Rs 22 lakh on sales of Rs 12.54 crore. On a low equity base of Rs 1.17 crore, EPS stood at Rs 2.25. According to the unaudited results for the nine-month period ended December 1997, the company recorded a net profit of Rs 20 lakh on sales of Rs 12.84 crore. On an equity base of Rs 1.2 crore, the annualised EPS works out to Rs 1.99.

According to profitability projections, the company will double its net profit in the fiscal 2000 onsales of Rs 25.17 crore. The following fiscal, net profit will jump to Rs 72 lakh on sales of Rs 30 crore which seems be on a bit higher side. The company is now supplying its products to Dewan Steel, R C Pipes and Neelu Steels.