Scan Steels Allots 21.44 Lakh Shares Post OCRPS Conversion

Scan Steels Limited's Board of Directors has approved the allotment of 21,44,239 equity shares. This follows the conversion of 20,42,133 Optionally Convertible Redeemable Preference Shares (OCRPS) into equity.

The new shares, each with a face value of ₹10, were issued to three entities: Bayanwala Brothers Pvt. Ltd., Gopikar Supply Pvt. Ltd., and Ascon Merchandise Pvt. Ltd.

Following the conversion, Bayanwala Brothers Pvt. Ltd. now holds 16.36% of the company's equity, Gopikar Supply Pvt. Ltd. holds 6.46%, and Ascon Merchandise Pvt. Ltd. holds 4.30%.

Impact on Equity and Shareholders

The allotment of these new shares directly expands Scan Steels' equity base. The company's total number of outstanding shares has increased, altering its capital structure and shareholder pattern.

The three allottee entities—Bayanwala Brothers Pvt. Ltd., Gopikar Supply Pvt. Ltd., and Ascon Merchandise Pvt. Ltd.—now hold significant stakes. These new shareholders will participate in future corporate decisions and profit distribution, such as dividends. The expanded equity base may also influence financial metrics like Earnings Per Share (EPS).

Company Background and Prior Deals

Scan Steels operates in the steel manufacturing sector, producing TMT rods, sponge iron, and billets. The company's history includes prior preferential allotments of convertible preference shares. Notably, in March 2024, promoter Bayanwala Brothers Pvt. Ltd. acquired a significant number of OCRPS. Furthermore, in February 2024, an EGM was planned to consider the issuance of 62,50,000 OCRPS on a private placement basis.

As of March 2026, Scan Steels reported outstanding borrowings of ₹72.97 crore and maintained its non-Large Corporate status under SEBI regulations. The company's credit ratings were reaffirmed by CRISIL at BBB+/Stable and A2+ in July 2025, though there was a past instance where CRISIL had suspended and reinstated ratings due to non-cooperation.

Past Concerns and Regulatory Issues

Scan Steels Ltd. was penalized ₹18.8 lakh by SEBI in January 2020 for fraudulent trading practices related to artificial volume creation in stock options between 2014-2015. Separately, there was a past instance where CRISIL ratings were suspended and reinstated due to non-cooperation.

Competitive Landscape

Scan Steels operates within the competitive Indian steel industry, alongside large players like Tata Steel Ltd, JSW Steel Ltd, and SAIL. These larger peers possess significantly higher production capacities, with JSW Steel around 29.7 MTPA and Tata Steel around 21 MTPA (as of 2025). SAIL is the second-largest producer by volume. In comparison, Scan Steels is a smaller entity focused on integrated steel production and TMT rods under the Shrishtii TMT brand.

Investor Watchlist

Investors should monitor Scan Steels' official website for further disclosures on this share allotment. Key areas to track include any future changes in the shareholding pattern, the company's financial performance and debt levels, and announcements regarding fundraising or strategic initiatives. Developments in regulatory compliance and corporate governance should also be noted.