Sambhav Steel Tubes Limited, a leading manufacturer in India’s ERW steel pipes and structural tubes segment, closed its ₹540 crore IPO on June 27, 2025, with a subscription rate of 3.12x. While the offering saw participation from retail and institutional investors, the absence of any grey market premium (GMP) puts a question mark on short-term listing gains.

In this detailed analysis, we break down the IPO structure, financial performance, subscription trends, and whether it’s a good bet for investors.

About the Company

Sambhav Steel Tubes Limited has positioned itself as a key player in the Indian steel industry, primarily in the manufacturing of electric resistance welded (ERW) steel pipes and hollow structural sections. As of March 31, 2024, the company ranks among the top Indian manufacturers in terms of installed capacity, signifying its stronghold in the sector.

Its products cater to infrastructure, real estate, automotive, and engineering sectors, aligning well with India's broader industrial growth.

IPO Details at a Glance

• IPO Size: ₹540 crore

• Fresh Issue: ₹440 crore (536.58 lakh shares)

• Offer for Sale (OFS): ₹100 crore (121.95 lakh shares)

• Price Band: ₹77 to ₹82 per equity share

• Lot Size: 182 shares

• Retail Minimum Investment: ₹14,924

• HNI Minimum Investment (14 lots): ₹2,08,936

• Expected Listing Date: July 2, 2025

• Stock Exchanges: BSE and NSE

• Market Capitalisation at Upper Price Band: ₹2,416.21 crore

Use of IPO Proceeds

The net proceeds from the fresh issue will be utilised as follows:

1. ₹390 crore for pre-payment or scheduled repayment of certain borrowings

2. Balance for general corporate purposes

This indicates a focus on reducing leverage, improving the company’s debt-equity ratio, and strengthening its balance sheet.

Anchor Investor Response

The company attracted ₹161.24 crore from anchor investors on June 24, 2025, by allocating 1,96,64,633 equity shares at the upper price band of ₹82 per share.

Anchor investor participation is considered a positive indicator of institutional confidence in the IPO.

Subscription Status – Day 3 (Final Day)

As of 11:00 AM on June 27, 2025, the IPO was subscribed 3.12 times overall:

• While not extraordinarily oversubscribed, the figure suggests moderate to healthy interest.

• Subscriptions are likely driven by long-term potential and sectoral relevance rather than short-term speculation.

Grey Market Premium (GMP) Analysis

As of the last update on June 20, 2025, the GMP stood at ₹0, indicating no premium or discount in the unlisted market.

• IPO Price: ₹82

• Expected Listing Price: ₹82

• GMP: ₹0

⚠️ This flat GMP suggests no speculative momentum and low potential for listing day gains, a red flag for short-term traders.

Financial Performance Overview

Sambhav Steel Tubes has shown consistent growth over the past three years:

• The company has rebounded strongly in FY24 after a modest FY23.

• EBITDA and profit margins show signs of stability, indicating operational efficiency.

• 9M FY25 numbers suggest a possible dip in profitability, raising caution for near-term outlook.

Key Valuation Metrics

These figures suggest that the IPO is reasonably priced, though not deeply discounted. With a post-issue P/E of 29.31x, the issue appears fairly valued relative to peers.

IPO Registrar and Lead Managers

• Registrar: KFin Technologies Limited

• Book Running Lead Managers (BRLMs):

  • Motilal Oswal Investment Advisors Limited

  • Nuvama Wealth Management Limited

How to Check IPO Allotment

The IPO allotment status will be available from June 30, 2025. Here’s how to check:

1. Visit KFin Technologies IPO Allotment Page

2. Select Sambhav Steel Tubes IPO from the dropdown

3. Enter Application Number / PAN / DP ID

4. Click submit to know the allotment result

Pros and Cons of the IPO

Pros:

• Strong market presence in ERW pipes and hollow sections

• Consistent growth in revenues and profits

• Reasonable valuations relative to sector P/E

• Robust ROE and ROCE performance

• Anchor investor backing builds trust

Cons:

• No GMP indicates low speculative demand

• Profitability dip in recent quarters may impact short-term sentiment

• Heavily reliant on domestic infrastructure cycle

Should You Subscribe? Our Verdict

While Sambhav Steel Tubes IPO demonstrates strong fundamentals, sector relevance, and moderate investor interest, the lack of grey market buzz suggests limited potential for listing gains.

If you are a long-term investor looking for a well-priced steel sector company with growth momentum and decent financials, this could be a moderate-risk bet.

However, for short-term listing gains, the absence of GMP and subdued oversubscription signal a ‘Wait and Watch’ approach.

Final Recommendation: Avoid for Listing Gains, Consider for Long-Term Investment. 

The Upcoming IPOs in this week and coming weeks are Crizac, Silky Overseas, Vandan Foods, Pushpa Jewellers, Cedaar Textile, Marc Loire Fashions.

The Current active IPO are Neetu Yoshi, Adcounty Media India, Moving Media Entertainment, Valencia India, PRO FX Tech, Ace Alpha Tech, Indogulf Cropsciences, Suntech Infra Solutions, Rama Telecom, Supertech EV, Sambhav Steel Tubes, HDB Financials.

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