Sambhav Steel Tubes Limited, a leading manufacturer of mild steel (MS) pipes and tubes in India, is launching its Initial Public Offering (IPO) on June 24, 2025, through the NSE SME platform. The IPO is a book-built issue of ₹136 crore, consisting entirely of a fresh issue of 1.6 crore equity shares.

Sambhav Steel Tubes IPO Details

About Sambhav Steel Tubes Limited

Incorporated in 2004, Sambhav Steel Tubes Limited is engaged in the manufacturing and supply of steel pipes, specifically:

• Mild Steel (MS) Black Pipes

• MS Galvanised Pipes

• Hollow Sections (SHS, RHS)

• Steel Tubular Poles

The company supplies its products to construction, infrastructure, irrigation, telecom, power distribution, and automobile industries. The manufacturing facility is located in Raipur, Chhattisgarh, with a strong domestic distribution network across north and central India.

Their installed capacity is approximately 200,000 MTPA as of FY24, and they have established long-term relationships with government agencies and private sector EPC companies.

Utilisation of IPO Proceeds

The company proposes to utilise the net proceeds as follows:

1. Working Capital Requirements – Major portion

2. Capital Expenditure – Upgrading manufacturing equipment

3. General Corporate Purposes – Expansion and contingency

4. Issue Expenses – Lead managers, registrar and listing costs

Financial Performance Snapshot

Key Ratios (FY24):

• EPS (Pre-Issue): ₹9.52

• EPS (Post-Issue): ₹5.75

• P/E Ratio (Post-Issue): ~14.78x

• ROE: 15.67%

• ROCE: 18.92%

• Debt/Equity: 0.61

The company's consistent growth in top-line and bottom-line, along with healthy return ratios, demonstrates strong fundamentals, although the SME segment remains prone to higher volatility and lower liquidity.

Promoters and Management

The company is promoted by:

• Mr. Sanjay Agrawal – CMD with 25+ years of experience in steel and tube manufacturing

• Mr. Ritesh Agrawal – Director and COO with a decade in plant operations and vendor management

• Mr. Deepak Bansal – CFO with strong finance and compliance background

The leadership team's sector experience is expected to drive growth post-listing.

Industry Outlook

The Indian steel tubes and pipes market is projected to grow at 6.8% CAGR over the next five years, driven by:

• Government infra push (PM Gati Shakti, National Infrastructure Pipeline)

• Growing rural water supply schemes (Jal Jeevan Mission)

• Smart city and urban transport investments

• Strong demand from oil & gas, power distribution, and agriculture sectors

However, competition from large organised players and cyclical fluctuations in raw material prices pose short-term risks.

Grey Market Premium (GMP)

As of June 19, 2025, no significant Grey Market Premium (GMP) is being reported for the IPO. However, sentiment may shift closer to listing depending on broader market trends, anchor book response, and subscription levels.

IPO Strengths

• Strong CAGR in revenues and profits over last 3 years

• Diversified product portfolio and customer base

• Reasonable valuation compared to other listed SME peers

• Experienced promoters and established plant operations

IPO Risks

• Operates in a cyclical and commodity-driven industry

• SME listing is less liquid, may lead to higher volatility post-listing

• Dependent on government infra capex and steel prices

• Single-location manufacturing raises concentration risk

Final Recommendation: Cautious Apply

Given the company's solid financials, reasonable pricing, and sector tailwinds, risk-tolerant retail investors may consider applying. However, considering the SME listing volatility, low GMP, and cyclical nature of the steel business, we recommend:

• Apply with Caution – If you’re a long-term investor comfortable with the SME segment

• Avoid for Listing Gain – Unless strong demand is visible in QIB/NII categories

Would you like:

• Live subscription tracker for Sambhav Steel IPO?

• GMP update close to listing date?

• Peer comparison chart?

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  Disclaimer:
  This article is for educational and informational purposes only and does not constitute financial advice. Investment decisions should be based on individual risk tolerance and consultation with SEBI-registered advisors. Market conditions are volatile and subject to change. Neither the author nor the platform is responsible for losses arising from use of this information.

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