Sambhv Steel Tubes Limited, a manufacturer of electric resistance welded (ERW) steel pipes and structural tubes, is launching its initial public offering (IPO) to raise ₹540.00 crore through a bookbuilding issue. The IPO consists of a fresh issue of ₹440.00 crore and an offer for sale (OFS) of ₹100.00 crore by existing shareholders.

The IPO opening and closing dates are yet to be announced, and the price band is also pending. Post-IPO, the equity shares will be listed on both BSE and NSE.

Issue Structure and Reservation

The face value of the equity shares is ₹10 per share. While the total issue size in shares and lot size will be announced closer to the date, the fresh issue and OFS components are clearly defined.

According to the DRHP, the pre-issue shareholding stands at 2,41,00,200 shares, and the promoters currently hold 71.8 percent of the company. The post-issue shareholding will be updated after finalisation of equity dilution.

The IPO has reserved quotas as follows:

• Qualified Institutional Buyers (QIBs): Not more than 50% of the net offer

• Retail Individual Investors (RIIs): Not less than 35% of the net offer

• Non-Institutional Investors (NIIs): Not less than 15% of the net offer

The cut-off time for UPI mandate confirmation will be 5 PM on the closing day of the IPO.

The book running lead managers (BRLMs) are Nuvama Wealth Management Limited and Motilal Oswal Investment Advisors Limited, while Kfin Technologies Limited is the registrar for the issue.

About Sambhv Steel Tubes Limited

Incorporated in 2017, Sambhv Steel Tubes Limited operates a backward-integrated manufacturing facility in Sarora, Tilda, Raipur, Chhattisgarh. This facility enables the company to manufacture ERW pipes and hollow structural sections with higher control over quality and cost.

The company's raw materials include iron ore from a Navratna PSU and coal from a Maharatna PSU, sourced from some of the largest coal mines in Asia, located around 250 kilometres from the plant.

Distribution and Market Presence

As of March 31, 2024, Sambhv Steel Tubes had 33 distinct distributors, with two operating six branches, expanding its network to 39 distribution points across 15 Indian states and one union territory. The company has a strong market footprint in Chhattisgarh, Maharashtra, Gujarat, Haryana, Rajasthan, Uttar Pradesh, Madhya Pradesh, and Telangana.

As of July 31, 2024, the sales and marketing team comprised 23 professionals.

Competitive Strengths

• Backward-integrated single-location manufacturing unit – unique in India.

• Strategically located plant reduces logistics cost and ensures raw material proximity.

• Strong product innovation and execution capability allowing premium product offerings.

• Extensive distributor network enabling broad market coverage.

• Positioned well to capitalize on growing demand for ERW pipes.

• Experienced promoters and management with strong steel sector expertise.

• Proven track record of robust financial performance.

Financial Performance (Restated Consolidated)

Key Performance Indicators

• Return on Equity (ROE): 25.42%

• Return on Capital Employed (ROCE): 17.66%

• Debt-to-Equity Ratio: 0.80

• Return on Net Worth (RoNW): 25.42%

• PAT Margin: 6.41%

Objects of the Issue

The net proceeds from the IPO will be utilised for the following purposes:

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

The Upcoming IPOs in this week and coming weeks are Sambhav Steel Tubes, Ellenbarrie Indutrial Gases, Kalpataru, HDB Financials, ArisInfra Solutions, Influx Healthtech, Mayasheel Ventures, Eppeltone Engineers, Patil Automation, Samay Projects Services.

The Current active IPO are Jainik Power Cables, Monolithisch India.

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