Sambhv Steel Tubes Limited, a prominent manufacturer of steel pipes and tubes, has officially filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to launch a ₹550 crore Initial Public Offering (IPO). The public issue will include both a fresh issue of shares and an offer for sale (OFS) by existing promoters and stakeholders.

This proposed IPO comes at a time when India’s infrastructure and construction sectors are seeing renewed momentum, and demand for quality steel tubes and pipes is rising across domestic and export markets.

IPO Details

As per the DRHP:

• Total Issue Size: ₹550 crore

• Fresh Issue Component: ₹325 crore

• Offer For Sale (OFS): ₹225 crore (by promoters and early investors)

• Face Value: ₹10 per share

• Tentative IPO Window: Likely by August 2025 (post SEBI approval)

• Listing: BSE and NSE

• Book Running Lead Managers: Axis Capital and JM Financial

• Registrar: Link Intime India Pvt. Ltd.

The company aims to utilize the net proceeds of the fresh issue to repay borrowings, enhance production capacity, and for working capital requirements.

About Sambhv Steel Tubes

Sambhv Steel Tubes Limited, based in Gujarat, is engaged in the manufacturing of mild steel (MS) and galvanized iron (GI) pipes, catering to applications in:

• Construction and infrastructure

• Water supply and irrigation

• Agriculture and greenhouses

• Oil & gas and general engineering

With multiple manufacturing facilities equipped with ERW (Electric Resistance Welded) tube lines, the company has seen robust growth driven by rising demand for pre-galvanised, structural, and hollow steel sections.

It currently has an installed capacity of over 2 lakh MTPA, and aims to double its production over the next 3–4 years with proceeds from the IPO.

Financial Performance Overview

Sambhv Steel Tubes has shown consistent top-line growth in recent years:

• Revenue (FY24): ₹764 crore

• Profit After Tax (FY24): ₹42.6 crore

• EBITDA Margin: 10.2%

• Net Profit Margin: 5.6%

• ROE: 13.4%

• ROCE: 14.1%

• Net Debt (FY24): ₹186 crore

The company plans to bring down its net debt-to-equity ratio from 1.2x to below 0.6x post IPO, which would significantly improve its financial flexibility and credit profile.

Objectives of the IPO

According to the DRHP, the key objectives of the IPO proceeds are:

• Repayment/prepayment of certain borrowings

• Expansion of manufacturing capacity at the Gujarat plant

• Installation of new galvanising and cold-rolled lines

• Funding incremental working capital needs

• General corporate purposes

The company is also exploring backward integration opportunities to manufacture raw materials like coils and strips in-house.

Industry Outlook

The Indian steel pipes and tubes market is projected to grow at a CAGR of 7–8% over the next five years, driven by:

• Government infra projects (Bharatmala, Jal Jeevan Mission)

• Increased urbanisation and housing demand

• Expansion of oil & gas and renewable energy segments

• Water transportation and agricultural use

Sambhv Steel is well-positioned to benefit from this demand surge, especially with its diversified product mix, geographic reach, and expansion strategy.

Analyst Take and Market Buzz

Market observers believe Sambhv’s IPO could generate strong investor interest from both institutional and retail segments, given:

• Growth potential in steel tubes and ERW pipes

• Reasonable pre-IPO valuation (expected P/E ~13x)

• Strategic end-user diversification across infra and agri

• Improving margin profile and operational scale

However, experts also flag risks such as volatility in steel prices, dependence on cyclical sectors, and intense competition from both organised and unorganised players.

Peer Comparison

Sambhv Steel Tubes will likely be compared with listed peers such as:

• APL Apollo Tubes

• Hi-Tech Pipes

• JTL Industries

• Surya Roshni (steel pipes segment)

While Sambhv operates at a smaller scale compared to APL Apollo, its focused approach on expansion and deleveraging could give it a competitive edge in the SME and mid-market space.

Conclusion

The ₹550 crore IPO filing by Sambhv Steel Tubes marks a significant strategic shift as the company aims to scale up operations, reduce debt, and improve its financial profile. With a strong base in India’s growing infrastructure-driven steel demand story, the IPO may provide a promising opportunity for investors with a medium to long-term outlook.

Recommendation: Track SEBI approval, DRHP details, and upcoming roadshows for final assessment. Positive long-term play subject to pricing and broader market sentiment.

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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