BCSS

The company buys coated steel coils, mostly from JSW Steel Coated Products, and processes them into sheets and strips of the exact size needed by air conditioner and refrigerator makers such as Amber Enterprises and Haier. It is a conversion business on traded steel with gross margins of just 12%. It buys 86.7% of its steel from JSW, on terms JSW sets and can change or end at short notice. Cash conversion has been weak, and the promoter family lends INR 19.5 cr to the company at 12%, well above what its banks charge. We would skip the issue for both short term and long term. 