Sambhav Steel Tubes Limited, one of the leading players in the Indian steel pipe manufacturing industry, has opened its Initial Public Offering (IPO) for subscription starting June 25, 2025, which will remain open until June 27, 2025. The IPO size stands at ₹540 Crores, comprising a fresh issue worth ₹440 Crores and an Offer for Sale (OFS) component of ₹100 Crores. This offering reflects the company’s aim to strengthen its financial base and reduce its debt burden.

With a focus on manufacturing Electric Resistance Welded (ERW) steel pipes and structural tubes (hollow section), Sambhav Steel Tubes has established a strong foothold in the domestic steel market, with a significant installed capacity as of March 31, 2024.

IPO Structure and Key Dates

The price band for the IPO is fixed at ₹77 to ₹82 per equity share, with a lot size of 182 shares. For retail investors, the minimum investment will be ₹14,924, whereas High-Net-Worth Individuals (HNIs) must apply for a minimum of 14 lots, amounting to 2,548 shares and ₹2,08,936.

At the upper band price of ₹82, the post-issue market capitalisation of the company is estimated at ₹2,416.21 Crores. The allotment is expected on June 30, 2025, and listing is likely on July 02, 2025 on both BSE and NSE.

Book Running Lead Managers and Registrar

Motilal Oswal Investment Advisors Limited and Nuvama Wealth Management Limited are the Book Running Lead Managers (BRLMs) for the IPO, while KFin Technologies Limited acts as the Registrar to the Issue.

Anchor Investment Update

Ahead of the IPO opening, Sambhav Steel Tubes Limited successfully raised ₹161.24 Crores from Anchor Investors, allocating 1,96,64,633 equity shares at the upper band price of ₹82 per share. The anchor investment indicates institutional backing but is not a direct indicator of listing performance.

Grey Market Premium and Subscription Status

The Grey Market Premium (GMP) for Sambhav Steel Tubes IPO currently stands at ₹0, indicating no premium or discount in the unofficial market. As of 11:00 AM on June 25, 2025, the IPO was subscribed 0.09 times on its first day, suggesting a lukewarm start in terms of retail and institutional interest.

Financial Performance Overview

Sambhav Steel Tubes has demonstrated consistent financial growth over the years, indicating stable operations in a competitive industry:

• Revenue from operations:

  • FY2022: ₹8,207.53 Million

  • FY2023: ₹9,390.04 Million

  • FY2024: ₹12,893.75 Million

  • Dec 31, 2024 (9 months): ₹10,188.06 Million

• EBITDA:

  • FY2022: ₹1,259.19 Million

  • FY2023: ₹1,190.84 Million

  • FY2024: ₹1,634.90 Million

  • Dec 31, 2024: ₹1,090.81 Million

• Profit After Tax (PAT):

  • FY2022: ₹721.08 Million

  • FY2023: ₹603.83 Million

  • FY2024: ₹824.39 Million

  • Dec 31, 2024: ₹406.85 Million

These figures reflect the company’s sound operating base and resilience in margins, even during volatile raw material price periods.

Valuation and Return Ratios

The valuation metrics show that the IPO is fairly priced when compared to the industry:

• Pre-Issue EPS (FY24): ₹3.79

• Post-Issue EPS (FY24): ₹2.80

• Pre-Issue P/E Ratio: 21.64x

• Post-Issue P/E Ratio: 29.31x

• Industry P/E Average: 39x

The company boasts strong return ratios, suggesting efficient capital utilisation:

• ROE (FY24): 25.42%

• ROCE (FY24): 17.66%

• RoNW (FY24): 25.42%

• Annualised EPS: ₹1.84

• Annualised P/E: 44.54x

Though these indicate financial strength, the lack of GMP movement is a caution for listing gains.

Use of IPO Proceeds

The net proceeds from the fresh issue will be used for the following:

1. Pre-payment or scheduled repayment of outstanding borrowings – ₹3,900.00 Million

2. General corporate purposes – includes working capital and other operational costs

Debt repayment will directly enhance the company’s balance sheet health and free up resources for operational scaling.

Promoter and Management Team

The company is led by a seasoned promoter group — Brijlal Goyal, Suresh Kumar Goyal, and Vikas Kumar Goyal — who bring an average of over 20 years of experience in the steel and manufacturing sectors. Their efforts are supported by Executive Director & COO Bhavesh Khetan, known for his operational proficiency.

This leadership team has been instrumental in driving production efficiency, market reach, and profitability over the past decade.

Allotment Guide

The IPO allotment date is expected to be June 30, 2025, with the allotment status available online through the registrar's portal — KFin Technologies. Investors can check their allotment by entering application number, PAN, or DP ID.

IPO Review and Recommendation

While Sambhav Steel Tubes Limited shows a consistent financial track record, fair valuation, and robust ROE, the lack of Grey Market Premium (GMP) and low initial subscription figures do not support expectations of listing gains. Additionally, steel sector IPOs tend to face cyclical challenges due to raw material volatility and global economic pressures.

For these reasons, analysts recommend avoiding this IPO purely for listing gains. However, long-term investors with confidence in the steel manufacturing space may consider evaluating the IPO for portfolio diversification, especially due to the company’s debt-reduction strategy and expansion potential.

Disclaimer: The above review is for educational and informational purposes only and should not be interpreted as investment advice. Investment in IPOs and the securities market is subject to risks. Readers should conduct their own due diligence and consult a certified financial advisor before investing. Market conditions, investor sentiment, and regulatory changes can affect IPO performance.

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The Current active IPO are Rama Telecom, Supertech EV, Sambhav Steel Tubes, HDB Financials, Abram Food, Shri Hare-Krishna Sponge Iron, Icon Facilitators, Globe Civil Projects, Ellenbarrie Indutrial Gases, Kalpataru, AJC Jewel.

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