PS Raj Steels, a prominent manufacturer of stainless steel products, made its much-anticipated debut on the Indian stock market on February 19, 2025. The company’s shares listed at ₹145, reflecting a modest premium of 3.57% over the IPO price of ₹140. Although the listing price did not witness a dramatic surge, it nonetheless marked a positive opening for the stainless steel industry player.

The IPO was oversubscribed 9.82 times, reflecting significant interest from investors. The company’s primary offering was a fresh issue of 20.20 lakh shares, which amounted to ₹28.28 Crores. This move comes after the company's registration in 2004, with a vision to manufacture high-quality stainless steel tubular solutions for diverse industries.

IPO Details and Subscription Performance

PS Raj Steels set the IPO price band between ₹132 and ₹140 per equity share, with a market capitalization of ₹105.53 Crores at the upper end of the price band. Investors could apply in a minimum lot size of 1,000 shares, which required a minimum investment of ₹1,40,000 for retail investors. The subscription period ran from February 12 to February 14, 2025. As of the closing day on February 14, the subscription status indicated that the IPO had been oversubscribed by 9.21 times, further reinforcing the demand for shares.

The Grey Market Premium (GMP) for the IPO was reported as ₹0, signaling that there was no significant price movement in the unlisted grey market. This trend suggested that market participants had little confidence in short-term listing gains. Despite the GMP indicating a neutral stance, the IPO did demonstrate healthy institutional demand.

Financial Overview and IPO Performance

The financial performance of PS Raj Steels showcases steady growth over the years. For the fiscal year 2024, the company's revenues were ₹29,776.39 lakh, which showed an increase from ₹22,544.28 lakh in 2023. The EBITDA for FY2024 was ₹1,081.56 lakh, reflecting strong operational efficiency. The Profit After Tax (PAT) for FY2024 was ₹636.29 lakh, indicating the company's consistent ability to generate profits.

PS Raj Steels is led by a highly experienced management team. The promoters, Mr. Raj Kumar Gupta, Mr. Deepak Kumar, Mr. Vishal Gupta, and Mr. Gaurav Gupta, bring over 50 years of collective experience in the steel pipes and tubes industry, which has been instrumental in the company’s expansion and success. Their leadership and strategic vision are key components of the company’s reliable track record in the market.

Market and Financial Ratios

When it comes to evaluating the IPO price, investors often look at metrics such as the Price-to-Earnings (P/E) ratio. For PS Raj Steels, the pre-issue P/E ratio stood at 12.14x, while the post-issue P/E ratio was slightly higher at 16.59x. Given the industry P/E ratio of 49x, PS Raj Steels’ valuation appears attractive when compared to its peers in the stainless-steel sector. The company’s return on equity (ROE) for FY24 was 20.79%, which further strengthens the case for long-term investment.

Additionally, the Return on Capital Employed (ROCE) was a strong 20.64%, highlighting the efficient use of capital in the business. Based on these performance metrics, PS Raj Steels presents a fairly priced IPO, making it an appealing choice for investors who are seeking long-term growth potential.

Post-Listing Outlook

The debut performance of PS Raj Steels’ shares may not have been spectacular, but the underlying financial health and industry positioning suggest that the company could offer strong returns in the long run. As the market absorbs the IPO and investors digest the initial listing performance, PS Raj Steels remains a promising player in the stainless steel industry, catering to growing demand across industrial and commercial applications.

The company has earmarked ₹2,650 Lakhs from the IPO proceeds to meet working capital needs, ensuring a well-funded operational framework. With its well-established reputation, trusted management, and financial stability, PS Raj Steels is poised to capitalize on future opportunities within the steel manufacturing sector.

For investors looking to hold onto their shares for the long term, PS Raj Steels offers solid fundamentals, making it a potential contender for steady returns. However, those expecting immediate listing gains might find the 3.57% premium to be underwhelming. Ultimately, as with any IPO, investors must carefully evaluate their risk tolerance and investment horizon before making their decisions.

In conclusion, while the PS Raj Steels IPO may have made a soft debut, the company’s stable financial growth, experienced leadership, and strong industry fundamentals make it a stock worth monitoring for those seeking future potential in the stainless steel industry.

The Upcoming IPOs in this week and coming weeks are Swasth Foodtech, Beezaasan Explotech, HP Telecom India.

The Current active IPO are Royalarc Electrodes, Tejas Cargo India, Quality Power Electrical Equipments.

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

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.

Join our Finance Saathi Telegram Channel for Regular Share Market, News & IPO Update.