Riyaz Bhai’s family is in the roofing business since 1976. His company ‘Metal Shine Industries Pvt Ltd’(formerly ‘Riyaz Steel’) touched turnover of 35 Crores in the year 2018-2019. In the year 2019-2020, the turnover was 25 Crores.
In 2013, he started in-house manufacturing of roof sheets under the brand name ‘Metal Shine’ at a capacity of 400 metric tons per month. By 2014, he established a dealer network of ‘Metal Shine’ roofing sheets with 25 dealers in Tamil Nadu and Andhra Pradesh.
The raw material for the roofing sheets are fresh steel coils. The coils are purchased from vendors like TATA BSL, ESSAR Steel, JINDAL Steel and other reputed brands.
His product has a high demand among architects and structural engineers for airports, metro & railway stations, malls, IT & industrial complexes, conveyor galleries, solar support structures and so on.
Riyaz bhai is looking for fresh investment. The investment will be used to purchase steel coils and transform them into roofing sheets. The maximum investment per entity (individual/business) is one lakh.
Here’s how your investment will be utilized:
Raw material (steel coil) cost: Rs.73(min)- 83(max) per Kg
Calculating profit using max price:
1 lakh / 83 = 1205 Kg or 1.205 Tons. That is with an investment of 1 lakh, 1.205 Tons of steel coil can be purchased.
The gross profit is 2500 Rs per ton.
To produce a ton of roofing sheets, the following costs are incurred:
Production cost: Rs 1000
Expenses: Rs 500
Overhead: Rs 150
Total: Rs 1650
So if we minus the costs from the gross profit, 2500-1650, we have a net profit of 850 Rs per ton.
If we multiply the net profit with the Kg of raw material purchased from your investment, Rs 850*1.205 tons, you’ll get 1024.25 Rs profit per month (rounded to 1025 Rs).
On annual basis:
1025*12=12,300 yearly profit. This corresponds to 12.3 % Return on Investment (RoI)
A comparison of the minimum and the maximum profit:
The profit will vary between 12300- 13974 per year. This is a one-time investment.
When you make an investment of 1 Lakh, shares of the company worth 1 lakh (10,000 shares each with a face value of 10 Rs) will be registered under your name and a physical certificate will be provided. You’ll get dividends on half-yearly basis. There is a lock-in period of 1 year. You have the options to transfer your shares to whomever you want. If you want to exit, the company will buyback your shares after the lock-in period provided a prior 30 days’ notice is served.
Security of your investment:
Metal shine is a government registered company and is governed by Companies Act, 2013 and Income Tax Act, 1965. They have a real estate asset of 3.5 Crores. The total investment they plan to raise is 2 Crores.
Future plans:
Riyaz bhai wants to take his company to greater heights. Right now he purchases the steel coils from other vendors. He has plans to manufacture the steel coil by the year 2023 at a capacity of 36000 metric tons per annum. If he does that, he would have created the first manufacturing unit in TN.
Advantages of Investing in this deal:
- Higher ROI compared to fixed deposit
- Established business
- Registered Company
- By being a shareholder, you’ll have ownership of the company and will have a say in the direction the company would take via the voting rights available to shareholders.
- Your contribution will help create meaningful opportunities and employment to others.
- Support business owners who refuse to knock the door of banks and interest based financiers
Disclaimer:
This is an ESAF initiative to help business owners who have the expertise and are seeking capital. Please do your due diligence before investing
