Sambhav Steel Tubes Limited, one of the leading manufacturers of electric resistance welded (ERW) steel pipes and structural tubes, made a strong debut on July 2, 2025, listing at ₹110 on the BSE and NSE, reflecting a 34% premium over its issue price of ₹82 per share. This enthusiastic response from the market underscores growing investor confidence in the Indian steel sector, particularly players like Sambhav with backward integration and value-added products.

The IPO, valued at ₹540 crore, comprised a fresh issue of ₹440 crore and an offer for sale (OFS) of ₹100 crore. The issue price band was fixed at ₹77 to ₹82 per share, and the offering was available for subscription from June 25 to June 27, 2025. The IPO received robust investor response, clocking a subscription rate of 28.46 times, making it one of the most oversubscribed offerings of the quarter.

IPO Structure and Listing Performance

• Issue Size: ₹540 crore

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

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

• Price Band: ₹77 - ₹82

• Lot Size: 182 shares (Retail minimum investment: ₹14,924)

• Market Cap at IPO Price: ₹2,416.21 crore

• Listing Price: ₹110 (₹28 gain, +34%)

• Lead Managers: Motilal Oswal Investment Advisors, Nuvama Wealth Management

• Registrar: KFin Technologies Limited

The company raised ₹161.24 crore from anchor investors at ₹82/share prior to the public subscription. Anchor allocation included 1,96,64,633 shares, reflecting strong institutional interest.

Company Overview: Sambhav Steel Tubes Limited

Sambhav Steel Tubes Limited is an emerging leader in India’s steel pipes and structural tubes segment, primarily manufacturing ERW black pipes, hollow sections, and galvanized iron (GI) pipes. As of March 31, 2024, the company ranks among the top ERW manufacturers by installed capacity in India.

What sets Sambhav apart is its single-location backward-integrated manufacturing facility in Sarora (Tilda), Raipur, Chhattisgarh. It is the only company in India with full backward integration for ERW pipes using narrow-width hot rolled (HR) coils. This unique integration—from sponge iron to finished pipes—ensures cost efficiency, quality control, and supply chain resilience.

The company sources iron ore and coal from “Navratna” and “Maharatna” PSUs respectively and operates a 25 MW captive power plant (16 MW WHRB + 9 MW AFBC), ensuring energy sustainability and low production costs.

As of March 2025, Sambhav employed 1,774 permanent workers and maintained a strong footprint across 15 states and 1 union territory, with 39 distributor branches and 600+ dealers.

Steel Industry & Sector Outlook

India is the world’s second-largest crude steel producer, with 140 million tonnes output in 2023. While global consumption stagnated, India’s finished steel consumption grew 13-14% YoY in FY24, propelled by construction, housing, and infrastructure projects.

Per capita steel consumption in India remains at 98 kg, significantly lower than the global average of 219 kg, pointing to strong latent demand. This is supported by ambitious government schemes like Jal Jeevan Mission, PM Gati Shakti, and the Amrit Bharat Station Scheme, which could drive massive demand for steel tubes in infrastructure.

The steel pipes and tubes market in India is expected to grow at a CAGR of 8–9% between FY25 to FY29, reaching 18.5–20.5 MTPA by FY29. Demand will be fueled by public utilities, smart cities, transport systems, and rural water supply schemes.

Business Strengths

1. Backward Integration
   Sambhav operates India’s only single-location fully integrated facility for ERW steel pipes, including sponge iron, HR coils, and downstream tubes—ensuring control over input costs, consistency, and margins.

2. Strategic Location
   Located in resource-rich Chhattisgarh, near India’s top iron and coal suppliers, the company enjoys logistics advantages, lower procurement costs, and faster turnaround.

3. Diverse and Growing Product Mix
   The product range includes black pipes, GI pipes, and hollow sections, with plans to expand into GP coils, stainless steel HRAP coils, and CRFH pipes—aimed at higher-margin segments.

4. Widespread Distribution Network
   Over 39 branches and 600+ dealers across India ensure deep market penetration, particularly in high-demand states like Maharashtra, Uttar Pradesh, Rajasthan, and Telangana.

5. Operational Efficiency & Power Cost Management
   A 25 MW captive power plant and energy-efficient technologies help lower overheads and enhance profitability. Advanced tech infrastructure supports lean manufacturing.

6. Financial Performance

   • Revenue (FY22): ₹819.35 crore

   • Revenue (FY24): ₹1,285.75 crore

   • Net Profit (FY22): ₹72.10 crore

   • Net Profit (FY24): ₹82.43 crore
     These numbers reflect consistent growth and margin stability, driven by value addition and capacity expansion.

Business Strategies Going Forward

1. Capacity Expansion
   Increasing installed capacity from 1.12 MTPA to 1.54 MTPA by September 2024 to cater to growing demand, especially in value-added products.

2. Geographic Expansion
   Plans to extend the dealer network into eastern and southern India and enhance market presence in semi-urban areas.

3. New Product Lines
   Entering markets for GP coils, stainless steel coils, and precision tubes, targeting sectors like telecom, solar, firefighting, and construction.

4. Brand Building
   Organizing dealer meets, influencer campaigns like “Chai pe Charcha”, and marketing tie-ups with architects and engineers to build awareness and demand.

5. Operational Leverage
   Leveraging in-house power generation, zinc-saving technology for GP pipes, and automation to control costs and boost margins.

Risk Factors & Concerns

1. Raw Material Volatility
   Reliance on select suppliers without long-term contracts could affect supply stability and price predictability.

2. Product Concentration
   Heavy dependence on ERW black pipes and GI pipes—market fluctuations could impact sales.

3. Geographic Revenue Concentration
   Currently dominant in north and west India; regional disruptions may significantly affect revenues.

4. Competitive Pressure
   Faces intense competition from larger players like APL Apollo, Hariom Pipes, JTL Industries, and Hi-Tech Pipes.

5. Limited Pricing Flexibility
   Volatility in input costs like iron ore, sponge iron, and zinc could hurt margins if not passed to customers.

Conclusion

Sambhav Steel Tubes' listing at a 34% premium is a strong vote of confidence from investors in its operational efficiency, unique backward integration, and strategic product expansion plans. With a robust distribution network, plans for capacity expansion, and exposure to growing infrastructure-led demand, the company is well-positioned for long-term growth.

However, raw material dependencies, competitive pressures, and concentration risks warrant careful monitoring. Investors looking for exposure to the infrastructure and construction value chain may consider Sambhav Steel Tubes a promising mid-cap bet in the Indian steel pipe manufacturing space, especially if the company delivers on expansion and margin improvement as planned.

The Upcoming IPOs in this week and coming weeks are Smarten Power Systems, Glen Industries, Travel Food Services, Anthem Biosciences, Chemkart India, Meta Infotech, Happy Square Outsourcing Services, Cryogenic OGS.

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