Shyam Metalics Stock Under Pressure After ED Attaches ₹159 Cr Assets Linked to Subsidiary

SYNOPSIS: ED provisionally attached Rs. 159 crore worth of assets linked to the company’s subsidiary under the PMLA in connection with an investigation into alleged illegal coal mining activities, creating regulatory overhang and investor concern.

During Monday’s trading session, shares of the 4th Largest Sponge Iron player, leading player in terms of pellet capacity, and one of the largest ferro alloys producers in India, are under pressure on the stock exchanges, after the Directorate of Enforcement (ED) issued a provisional attachment order of around Rs. 159.51 crore linked to its subsidiary under the provisions of the Prevention of Money Laundering Act (PMLA).

With a market cap of Rs. 23,949.5 crores, shares of Shyam Metalics & Energy Limited are currently trading in the red at Rs. 858 on BSE, down by around 1 percent, compared to its previous closing price of Rs. 864.8. The stock has delivered negative returns of nearly 6 percent in the last one year, but has gained by about 8 percent in one month.

What’s the News:

As per its latest disclosure to the stock exchanges, Shyam Metalics & Energy Limited informed that the Directorate of Enforcement (ED) has issued a Provisional Attachment Order dated 15th April 2026, which was received by the company on 16th April 2026. The order pertains to the attachment of assets amounting to Rs. 159.51 crore under the Prevention of Money Laundering Act (PMLA), 2002, in connection with an ongoing investigation related to alleged illegal coal mining and pilferage in leasehold areas of Eastern Coalfields Limited (ECL).

Out of the total amount, Rs. 152.48 crore relates to investments in corporate bonds and alternate investment funds held by Shyam Sel and Power Limited (SSPL), a wholly owned subsidiary of the company.

The company clarified that the attachment is provisional in nature and subject to confirmation by the Adjudicating Authority under the PMLA framework. It further stated that the matter relates to the alleged purchase of illegally mined coal from ECL by certain third-party entities, and no direct linkage with the company has been established during the course of the investigation. The company is pursuing appropriate legal remedies in this regard. 

The attachment pertains solely to specific financial investments of the subsidiary and does not impact the operations of the listed entity or its group companies. The company also indicated that there is no immediate financial impact, as it has provided complete disclosures to the investigating authorities, and no involvement in illegal activities has been established.

From a financial standpoint, the potential exposure is limited to Rs. 152.48 crore, which represents ~1.44 percent of the company’s consolidated net worth of Rs. 10,553 crore as of March 31, 2025. The final outcome remains subject to adjudication, and the company continues to take necessary legal steps.

Financials, Management Guidance & More:

Shyam Metalics & Energy Limited is one of India’s leading and fastest-growing integrated metal-producing companies primarily in the steel Industry in West Bengal, Odisha, Jharkhand and Madhya Pradesh, with a focus on long steel products, ferro alloys, aluminium and stainless steel. 

As of Q3 FY26, the company reported a combined production capacity of 16.78 million tonnes per annum (MTPA). Additionally, it generated a total of 467 MW of power, of which ~83 percent was sourced from captive operations during Q3 FY26, supporting margin improvement.

The company expects a strong growth trajectory over the coming years, with both revenue and EBITDA projected to grow by ~2.5 times by FY31. Revenue, which stood at Rs. 15,137 crore in FY25, is anticipated to scale significantly, supported by expansion into diversified, value-added product segments that offer higher return on capital employed (ROCE) and relatively lower capital expenditure requirements.

Historically, over the past two decades, the company has delivered a CAGR of around 16 percent in revenue and 19 percent in EBITDA, reflecting consistent operational performance across cycles. Building on this track record, management expects revenue to grow at a CAGR of 15-17 percent and EBITDA at 18-20 percent over the next five years, without requiring substantial additional capital investment while maintaining its existing 75 percent stake.

Shyam Metalics reported a significant growth in revenue from operations, experiencing a year-on-year increase of around 18 percent, from Rs. 3,756 crores in Q3 FY25 to Rs. 4,421 crores in Q3 FY26. Meanwhile, its net profit increased during the same period from Rs. 197 crores to Rs. 198 crores, representing a marginal rise of just around 1 percent YoY. 

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