Sambhav Steel Tubes Limited, a notable manufacturer in India’s steel industry, is all set to launch its Initial Public Offering (IPO) on June 25, 2025, with the offer closing on June 27, 2025. The IPO is a Book Built Issue totaling ₹540.00 Crores, comprising a Fresh Issue of 536.58 Lakh shares worth ₹440.00 Crores and an Offer for Sale (OFS) of 121.95 Lakh shares aggregating ₹100.00 Crores.

The IPO price band has been fixed between ₹77 to ₹82 per equity share, and at the upper band, the company’s market capitalisation is estimated at ₹2,416.21 Crores. The minimum lot size for retail investors is 182 shares, requiring an initial investment of ₹14,924, while High-Net-Worth Individuals (HNIs) must invest in a minimum of 14 lots (2,548 shares), totaling ₹2,08,936.

The shares will be listed on both NSE and BSE, with a tentative listing date set for Wednesday, July 2, 2025. The IPO allotment is likely to be finalized by Monday, June 30, 2025. The issue is managed by Motilal Oswal Investment Advisors Limited and Nuvama Wealth Management Limited, with KFin Technologies Limited serving as the registrar.

Company Overview

Sambhav Steel Tubes Limited is one of India’s leading manufacturers of electric resistance welded (ERW) steel pipes and structural hollow sections. As of March 31, 2024, the company is ranked among the top domestic players in terms of installed capacity, affirming its strong market position.

The company benefits from the leadership of its promoters, namely Brijlal Goyal, Suresh Kumar Goyal, and Vikas Kumar Goyal, all of whom possess over 20 years of experience in the steel manufacturing sector. Supporting them is Bhavesh Khetan, who serves as Executive Director and Chief Operating Officer, adding technical strength and sectoral insight.

Financial Overview

Sambhav Steel Tubes has posted strong and consistent financials across recent fiscal years:

• Revenue from operations:

  • Dec 2024: ₹10,188.06 Million

  • FY24: ₹12,893.75 Million

  • FY23: ₹9,390.04 Million

  • FY22: ₹8,207.53 Million

• EBITDA:

  • Dec 2024: ₹1,090.81 Million

  • FY24: ₹1,634.90 Million

  • FY23: ₹1,190.84 Million

  • FY22: ₹1,259.19 Million

• Profit After Tax (PAT):

  • Dec 2024: ₹406.85 Million

  • FY24: ₹824.39 Million

  • FY23: ₹603.83 Million

  • FY22: ₹721.08 Million

These metrics indicate a steady growth trend, backed by scalable manufacturing capabilities and stable demand in the steel sector.

Valuation and Key Ratios

The valuation of the IPO appears reasonable, but not exceptionally attractive based on peer comparisons and return metrics:

• Pre-issue EPS (FY24): ₹3.79

• Post-issue EPS (FY24): ₹2.80

• Pre-issue P/E: 21.64x

• Post-issue P/E: 29.31x

• Industry P/E: 39x

• Annualised EPS: ₹1.84

• Annualised P/E: 44.54x

• ROCE (FY24): 17.66%

• ROE (FY24): 25.42%

• RoNW: 25.42%

These performance indicators suggest the IPO is fairly priced, offering decent returns on capital, though the relatively high annualised P/E may deter short-term investors.

IPO Objectives

The company has laid out clear objectives for utilizing the net proceeds:

1. ₹390 Crores will be used for pre-payment or scheduled re-payment of borrowings

2. The remaining funds will be allocated for general corporate purposes

The focus on debt reduction and corporate strengthening is aimed at improving financial stability and future scalability.

Grey Market Premium (GMP) Status

As of June 20, 2025, the GMP for the Sambhav Steel Tubes IPO stands at ₹0, signaling no unofficial premium in grey market trades. This suggests the IPO may not witness significant listing gains, especially for short-term investors.

While GMP is not a reliable predictor, it reflects market sentiment, and currently, interest appears muted.

How to Check Allotment Status

The IPO allotment status will be available on June 30, 2025, and can be checked through the registrar’s portal:

• Visit KFin Technologies’ IPO allotment page

• Select “Sambhav Steel Tubes Limited IPO” from dropdown

• Enter your Application No., PAN, or DP Client ID

• Submit to view allotment status

Final Review & Recommendation

While Sambhav Steel Tubes Ltd has shown stable revenue and profit growth, and boasts strong promoter experience, the absence of any listing premium, paired with a fair valuation, makes this IPO unattractive for listing gains.

Investors looking for long-term exposure to the steel and infrastructure sector may consider it cautiously. However, those seeking short-term listing profits are advised to avoid this IPO, especially considering the zero GMP and moderate annualised returns.

Conclusion: Avoid for Listing Gains

The Sambhav Steel Tubes IPO offers a stable but unremarkable opportunity for investors. While it is not overpriced, the lack of enthusiasm in the grey market, combined with only moderate return metrics, points to limited upside in the short term.

Long-term investors may evaluate the company for its fundamentals and debt-reduction strategy, but from a listing perspective, this issue does not warrant aggressive participation.

Disclaimer:
This article is intended solely for educational and informational purposes and does not constitute financial advice or investment recommendation. All figures are based on publicly available data and are accurate as of the date of publication. Investors should conduct independent research and consult with financial advisors before making any investment decisions. The stock market involves risks, and past performance is not indicative of future results.

The Upcoming IPOs in this week and coming weeks are Supertech EV, Valencia India, Neetu Yoshi, Abram Food, PRO FX Tech, Suntech Infra Solutions, Shri Hare-Krishna Sponge Iron, Icon Facilitators, Ace Alpha Tech, Globe Civil Projects, Sambhav Steel Tubes, Ellenbarrie Indutrial Gases, Kalpataru, HDB Financials, AJC Jewel.

The Current active IPO are  Aakaar Medical Technologies, Safe Enterprises Retail Fixtures, Mayasheel Ventures.

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.