Karbonsteel Engineering Limited, a company with a strong presence in structural engineering and fabrication, has announced its Initial Public Offering (IPO) which will open on 9 September 2025 and close on 11 September 2025. The company specialises in the design, fabrication, and assembly of heavy and precision steel structures. Their solutions are widely applied across diverse industries such as steel plants, railway bridges, oil & gas plants, refineries, chemical plants, and industrial units. With years of industry expertise, Karbonsteel Engineering has positioned itself as a reliable name for delivering large-scale structural projects.

The IPO is being launched as a Book Built Issue of ₹59.30 crores, comprising a fresh issue of 30.39 lakh shares worth ₹48.32 crores and an Offer for Sale (OFS) of 6.90 lakh shares totalling ₹10.97 crores. The equity shares will be listed on the BSE SME platform, with a tentative listing date set for 16 September 2025.

IPO Price Band and Investment Details

The price band for the Karbonsteel Engineering IPO has been fixed between ₹151 and ₹159 per equity share. At the upper price band of ₹159, the company’s market capitalisation will be ₹224.85 crores. The IPO has a lot size of 800 shares, and individual investors are required to apply for a minimum of two lots (1,600 shares), translating into a minimum investment of ₹2,54,400.

The IPO is managed by Seren Capital Private Limited as the Book Running Lead Manager (BRLM), while Maashitla Securities Private Limited is the Registrar to the issue. The role of Market Makers is being handled by SS Corporate Securities Limited and Rikhav Securities Limited.

Karbonsteel Engineering IPO Grey Market Premium (GMP)

The Grey Market Premium (GMP) of Karbonsteel Engineering IPO is currently around ₹16, indicating an expected listing gain of 10.06%. However, experts caution that GMP is purely an indicator based on unorganised trading and does not guarantee the actual listing price. The GMP fluctuates depending on demand and supply dynamics in the unregulated market and should be used for educational purposes only.

Anchor Investors Participation

Karbonsteel Engineering successfully raised ₹16.87 crores from Anchor Investors at a price of ₹159 per share. The company allocated 10,60,800 equity shares to Anchor Investors in consultation with the Book Running Lead Managers. This early anchor support reflects confidence in the company’s fundamentals and its future growth potential.

Allotment and Listing Timeline

The basis of allotment is expected to be finalised on 12 September 2025, while the shares are scheduled to be listed on 16 September 2025 on the BSE SME platform. Investors can check their allotment status online through the registrar’s website using their application number, PAN, or DP Client ID. This process ensures transparency and quick access to allotment information.

Objectives of the IPO

The net proceeds from the IPO will be utilised towards the following objectives:

1. ₹1,229.15 lakh for capital expenditure to expand the Umbergaon facility by constructing new sheds.

2. ₹307.54 lakh for repayment of certain borrowings.

3. ₹2,525.00 lakh for working capital requirements.

4. Remaining funds for general corporate purposes.

These objectives underline the company’s commitment to strengthen its infrastructure and reduce debt, thereby supporting long-term growth.

Company Background and Strengths

Karbonsteel Engineering is known for its high-quality fabrication and precision engineering solutions. The company’s projects have been integral to industrial and infrastructure development in India, serving critical sectors like steel, oil & gas, and chemicals.

The company is spearheaded by an experienced management team led by Shrenik Kirit Shah (Managing Director), who has over 19 years of experience in the steel industry, and Mittal Shrenik Shah. Their leadership has played a pivotal role in strategic decision-making and overall business operations.

Financial Performance

The company has demonstrated consistent growth in revenue and profitability:

• Revenue from Operations: ₹27,390.81 lakhs (FY25), ₹21,877.30 lakhs (FY24), and ₹15,588.79 lakhs (FY23).

• EBITDA: ₹3,746.40 lakhs (FY25), ₹2,622.33 lakhs (FY24), and ₹1,652.92 lakhs (FY23).

• Profit After Tax (PAT): ₹1,415.93 lakhs (FY25), ₹942.49 lakhs (FY24), and ₹510.70 lakhs (FY23).

The consistent rise in revenues and profits shows sustainable business growth and effective cost management.

Valuation and Ratios

For FY24, the company reported:

• Pre-issue EPS: ₹12.78, Post-issue EPS: ₹10.01

• Pre-issue P/E ratio: 12.44x, Post-issue P/E ratio: 15.88x

• Industry P/E ratio: 25x

• ROCE: 24.63%, ROE: 27.19%, RoNW: 23.45%

These numbers suggest that the IPO is reasonably priced compared to industry peers and offers potential upside for investors.

Risk Factors and Considerations

Despite strong fundamentals, investors should also consider potential risks such as:

• Dependency on cyclical industries like steel and oil & gas.

• Volatility in raw material prices.

• Reliance on large infrastructure projects which may face delays.

Therefore, while the IPO appears attractive based on financial growth and fair pricing, it is best suited for investors with a higher risk appetite.

Recommendation

Considering the company’s financial performance, anchor investor participation, and valuation, experts suggest that risk-taking investors may subscribe to the IPO for potential listing gains of around 10%, as indicated by the GMP. However, conservative investors should evaluate long-term prospects before investing.

The Upcoming IPOs in this week and coming weeks are Karbonsteel Engineering, Taurian MPS, L. T. Elevator, Galaxy Medicare, Airfloa Rail Technology, Dev Accelerator, Jay Ambe Supermarkets, Urban Company, Shringar House of Mangalsutra, .

The Current active IPO are Nilachal Carbo Metalicks, Krupalu Metals, Vashishtha Luxury Fashion, Sharvaya Metals, Vigor Plast India, Austere Systems.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.