Shah Alloys Limited
Overview
Shah Alloys Limited underwent significant restructuring in FY 2025-26, marked by the permanent closure of its iron and steel plant at Santej, Gujarat in August 2025 due to technological obsolescence, aging machinery, higher production costs, and persistent losses. This led to a substantial decline in standalone revenue from operations to ₹37.27 crore from ₹266.52 crore in the previous year.
Financial Performance
The company reported a consolidated net profit of ₹107.73 crore (₹10,772.99 lakhs), primarily driven by exceptional gains of ₹91.61 crore (₹13,560.38 lakhs) from asset monetization activities. These gains included:
- Sale of 16-inch Rolling Mill Plant for ₹17.00 crore (gain of ₹16.92 crore)
- Sale of Plant and Machinery including CWIP with technical know-how for ₹63.00 crore (gain of ₹53.48 crore)
- Divestment of investment in SAL Steel Limited (gain of ₹13.98 crore)
- Settlement with HDFC Bank: Paid ₹18.00 crore against ₹25.24 crore liability (waiver of ₹7.24 crore)
The consolidated balance sheet showed total assets of ₹207.61 crore (₹20,760.90 lakhs) with significant improvement in equity from negative ₹27.49 crore to positive ₹92.56 crore.
Strategic Restructuring
The Board proposed major strategic changes including:
- Diversification into commodity trading and real estate/construction through alteration of Memorandum of Association
- Seeking shareholder approval for strategic alternatives for steel assets (induction of strategic investor, lease, relocation, sale or disposal)
- Monetization of land and buildings through various commercial arrangements
- Proceeds utilization for technology upgradation, restructuring, real estate development, investments, capex, working capital, and debt repayment
Corporate Governance & Compliance
Auditors Parikh & Majmudar Chartered Accountants issued an unqualified opinion on the consolidated financial statements, confirming adequate internal financial controls. However, they highlighted material uncertainty regarding going concern status due to plant closure, though management believes the company can continue while exploring strategic alternatives.
Key Developments
- Disinvestment from associate SAL Steel Limited through Share Purchase Agreement with Sree Metaliks Limited
- Board changes including appointment of new directors and resignations
- Plant machinery valuation of ₹44.195 crore obtained from IBBI Registered Valuer
- Contingent liabilities of approximately ₹131.91 crore primarily from disputed tax demands and claims
AGM Agenda
The 36th Annual General Meeting scheduled for 18th September 2026 includes adoption of financial statements, re-appointment of directors, and approval of strategic restructuring proposals and MOA alteration for business diversification.