Shyam Metalics, a Kolkata based metal maker which is coming out with its IPO boasts of 3 major features that distinguish it from other commodity companies- Complete integration, diversified product mix and low leverage. "For metal companies, costs is the major mantra", says Brij Bhushan Agarwal, VC&MD, Shyam Metalics & Energy. While the company doesn't have captive mines it has long term linkages with miners. Agarwal says mines auctioned in the last 1 year have been more expensive than what they are getting in the market. He goes on to say that power is a big cost and their captive power plant gives them a major advantage over other producers. "A ton of ferro alloy consumes 4000 units of power which is very high", says Agarwal. Another interesting feature is the wide range of products which means competitors too are different for each product - ranging from Maithan Alloy to Tata Steel. The company has also focussed on keeping debt as low as possible and Agarwal says that will be their strategy going forward as well.
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