Introduction:
The Sambhv Steel Tubes IPO is gearing up to hit the markets with a total issue size of ₹540 crore, combining a fresh issue of ₹440 crore and an offer for sale worth ₹100 crore. Known for its backward-integrated ERW steel pipe manufacturing facility based in Chhattisgarh, the company stands out in India’s steel infrastructure space with strong distribution across 15 states.
With robust revenue growth, healthy profit margins, and a strategic location advantage, Sambhv Steel Tubes is looking to leverage the IPO proceeds to reduce debt and strengthen its financial position. In this blog, we dive deep into every detail of the Sambhv Steel Tubes IPO—from business model and financials to risks, valuations, and listing potential—to help you make an informed investment decision.
Sambhv Steel Tubes IPO Details
| Particulars | Details |
|---|---|
| IPO Opening Date | To be announced |
| IPO Closing Date | To be announced |
| IPO Type | Book Building |
| Face Value | ₹10 per share |
| Price Band | Yet to be announced |
| Lot Size | Yet to be announced |
| Total Issue Size | ₹540 crore |
| Fresh Issue | ₹440 crore |
| Offer for Sale (OFS) | ₹100 crore |
| Listing Exchanges | BSE and NSE |
| Registrar | Kfin Technologies Limited |
| Lead Managers | Nuvama Wealth, Motilal Oswal |
| Promoters | Brijlal Goyal, Suresh Kumar Goyal, Vikas Kumar Goyal, Sheetal Goyal, Shashank Goyal, Rohit Goyal |
| Pre-Issue Shareholding | 71.8% |
| Post-Issue Shareholding | To be updated |
| Equity Shares Outstanding | 2,41,00,200 (Pre-issue) |
IPO Objectives – Sambhv Steel Tubes Limited
The net proceeds from the Sambhv Steel Tubes IPO are proposed to be utilized for the following purposes:
- Pre-payment or Scheduled Repayment of Certain Borrowings
- The company plans to reduce its debt burden by prepaying or repaying a portion of its existing loans.
- Proposed Allocation: ₹390 crore
- Objective: Improve the debt-equity ratio, reduce interest outgo, and strengthen the balance sheet.
- General Corporate Purposes
- The remaining funds will be used to meet general business needs including working capital, expansion plans, and administrative expenses.
These objectives indicate the company’s focus on deleveraging, improving financial stability, and supporting future growth initiatives.
Business Overview – Sambhv Steel Tubes Limited
Sambhv Steel Tubes Limited is one of India’s leading manufacturers of Electric Resistance Welded (ERW) steel pipes and structural tubes (hollow sections), with a significant presence across the entire value chain. As of March 31, 2024, the company ranks among the top in terms of installed capacity in the ERW segment (Source: CRISIL Report).
Integrated Manufacturing Excellence
Sambhv Steel is the only Indian company with a single-location backward integrated manufacturing facility for ERW steel pipes and tubes. This strategic integration enables the company to produce key intermediate materials like sponge iron, blooms/slabs, and hot rolled (HR) coils in-house — reducing reliance on third-party suppliers and enhancing cost and quality control.
The Sarora (Tilda) Facility in Chhattisgarh is equipped with advanced technologies, including a hot rolling mill with hydraulic automatic gauge control (HAGC), allowing the production of high-precision HR coils comparable to those of primary manufacturers.
Product Range & Customization
The company manufactures a wide spectrum of ERW steel products, including:
- ERW Black Pipes & Tubes (1.20 mm to 5.00 mm thickness)
- Square: 15×15 mm to 113×113 mm
- Rectangular: 40×20 mm to 145×82 mm
- Round: 15 NB to 125 NB
- Large Diameter Pipes from wider coils (up to 6.00 mm thickness)
- Square: Up to 150×150 mm
- Rectangular: Up to 200×100 mm
- Round: Up to 150 NB
This product flexibility, backed by an integrated supply chain, allows rapid customization based on market demand — a competitive edge over peers relying on outsourced coils.
Raw Material Advantage
Sambhv sources coal from a Maharatna PSU, which contributes ~85% of India’s total coal production. With mines just 250 km from its plant, the company enjoys logistical and cost advantages, reinforced by a long-term coal supply agreement.
Growth Through Innovation
Driven by product innovation and process efficiency, Sambhv has expanded its gross margin from 24.35% in FY22 to 28.43% in FY24. The company aims to further diversify its portfolio with value-added products like:
- Galvanized (GP) coils and pipes
- Cold Rolled Full Hard (CRFH) pipes
- Stainless Steel (SS) HRAP and CR coils
Capacity Expansion
As of March 31, 2024, the company had an installed capacity of 1.12 million MTPA, which increased to 1.54 million MTPA by September 20, 2024 — reflecting a robust growth strategy to meet rising demand.
Financial Highlights – Sambhv Steel Tubes Limited
Sambhv Steel Tubes has demonstrated strong financial growth over the last three fiscal years, showcasing consistent revenue growth, profitability, and capital expansion.
Key Financial Metrics (₹ in Crore)
| Particulars | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenue from Operations | ₹820.75 Cr | ₹939.00 Cr | ₹1,289.38 Cr |
| Profit After Tax (PAT) | ₹72.11 Cr | ₹60.38 Cr | ₹82.44 Cr |
| Net Worth | ₹149.30 Cr | ₹210.40 Cr | ₹438.28 Cr |
| Total Assets | ₹458.51 Cr | ₹552.14 Cr | ₹940.13 Cr |
| Reserves & Surplus | ₹129.21 Cr | ₹190.31 Cr | ₹197.28 Cr |
| Total Borrowings | ₹241.29 Cr | ₹282.77 Cr | ₹346.88 Cr |
Key Ratios & KPIs
| Metric | FY 2024 |
|---|---|
| Return on Equity (ROE) | 25.42% |
| Return on Capital Employed (ROCE) | 17.66% |
| Return on Net Worth (RoNW) | 25.42% |
| Debt-to-Equity Ratio | 0.80x |
| PAT Margin | 6.41% |
Financial Overview
- Revenue Growth: The company’s revenue grew at a CAGR of ~25.8% from FY22 to FY24, reflecting strong demand for its ERW steel products and value-added offerings.
- Profitability: PAT rose from ₹72.11 Cr in FY22 to ₹82.44 Cr in FY24 despite a dip in FY23, demonstrating resilience in a volatile commodity pricing environment.
- Net Worth Surge: The net worth nearly tripled from FY22 to FY24, highlighting strong internal accruals and capital management.
- Leverage Position: The company maintains a manageable Debt/Equity ratio of 0.80x, with a significant portion of IPO proceeds earmarked for debt repayment, likely improving this metric further post-listing.
Valuation and Peer Comparison
Sambhv Steel Tubes Limited positions itself as a competitively strong player in the ERW steel pipe industry with a strategic focus on backward integration and operational efficiency. Below is a comparative snapshot with its listed industry peers based on FY24 data:
Peer Comparison Table (as of March 31, 2024)
| Company Name | EPS (Basic) | P/E (x) | RoNW (%) |
|---|---|---|---|
| Sambhv Steel Tubes Ltd | ₹3.79 | TBD | 25.42% |
| APL Apollo Tubes Ltd. | ₹26.40 | 58.05 | 22.21% |
| Hariom Pipe Industries Ltd. | ₹20.34 | 39.41 | 13.56% |
| Hi-Tech Pipes Ltd. | ₹3.25 | 73.00 | 8.90% |
| JTL Industries Ltd. | ₹6.63 | 35.17 | 19.15% |
| Rama Steel Tubes Ltd. | ₹0.50 | 30.41 | 10.40% |
| Surya Roshni Ltd. | ₹30.51 | 24.07 | 17.41% |
Note: Sambhv’s P/E ratio is not available yet as the IPO price band is undisclosed.
EBITDA Margin Superiority
Sambhv Steel Tubes has consistently outperformed the industry in terms of EBITDA margins due to its integrated operations and efficient cost structure.
| Company | FY22 EBITDA Margin | FY23 EBITDA Margin | FY24 EBITDA Margin |
|---|---|---|---|
| Sambhv Steel Tubes Ltd | 15.20% | 12.52% | 12.43% |
| Peer Set Average | 6.64% | 6.63% | 6.79% |
Source: CRISIL Report; Peer set includes APL Apollo, Hariom Pipe, Hi-Tech Pipes, Rama Steel, JTL Industries, and Surya Roshni.
Valuation Insights
- Superior Profitability: Sambhv delivers a RoNW of 25.42%, higher than all peers except Surya Roshni and APL Apollo, indicating efficient capital utilization.
- EBITDA Margin Leadership: Nearly double the peer average over three fiscals — highlighting strong pricing power and cost control.
- Lean Structure: Lower revenue base vs. large-cap peers, but higher operating margin indicates niche advantage in a cost-sensitive industry.
Strengths and Risks for Sambhv Steel Tubes IPO:
Strengths
- Backward Integrated Facility
Sambhv operates India’s only single-location backward-integrated ERW pipe facility, ensuring better control over raw materials, quality, and cost. - Strategic Location Advantage
Its plant in Raipur, Chhattisgarh, is near major coal and iron ore mines, lowering logistics costs and ensuring steady raw material access. - Strong Financial Growth
The company posted ~57% net worth growth YoY in FY24, with a robust RoNW of 25.42% and consistent profitability. - High EBITDA Margins
Sambhv’s 12.43% EBITDA margin in FY24 is significantly above the peer average (~6.79%), signaling efficient operations. - Established Distribution Network
A presence in 15 Indian states and 1 union territory with 39 distributors provides deep market access and customer reach. - Experienced Promoters
The promoters and management have decades of experience in the steel and infrastructure sectors.
Risks
- Commodity Price Volatility
Profitability is sensitive to fluctuations in steel, coal, and iron ore prices — key raw materials for ERW pipe production. - High Working Capital Needs
Steel manufacturing requires significant working capital. Sambhv’s operations could face liquidity pressure during downturns. - Geographic Concentration
Although present in several states, manufacturing is limited to one location, making it vulnerable to local disruptions or logistical challenges. - Customer Concentration Risk
A significant portion of revenue may come from select large customers or segments, posing concentration risk. - IPO Use of Proceeds
Over 72% of IPO funds will go toward debt repayment. While it improves the balance sheet, it doesn’t directly expand capacity or operations.
GMP Update (Grey Market Premium)
As of now, no active GMP (Grey Market Premium) is available for Sambhv Steel Tubes IPO. The grey market activity typically picks up closer to the IPO opening date, especially after the price band is announced.
However, considering:
- Strong financial performance
- Industry-leading EBITDA margins
- Strategic location and backward integration
…it is expected that investor sentiment could be positive, and a decent GMP might emerge closer to the opening. Stay tuned for updates.
Conclusion
Sambhv Steel Tubes Limited is entering the market with solid financials, a unique operational model, and strong demand visibility in India’s infrastructure-driven steel sector.
Short-Term View
Listing gains may depend on final pricing, market mood, and grey market cues closer to IPO. If priced attractively, a moderate listing premium is possible.
Long-Term View
With a 25%+ RoNW, high EBITDA margin, and growing footprint, Sambhv presents a strong long-term structural story. Investors with a 2–3 year horizon may benefit from growth in the construction and infrastructure sectors.
Allotment Strategy
This is a mainboard IPO, so allotment will be via lottery in the retail category.
To improve your chances:
- Apply from multiple family members’ demat accounts
- Ensure correct and timely UPI mandate approval
📢 Pro Tip:💡 Multiple accounts = Higher allotment chances.
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FAQs on Sambhv Steel Tubes IPO
What is the Sambhv Steel Tubes IPO issue size?
The total issue size is ₹540 crore, which includes a fresh issue of ₹440 crore and an offer for sale (OFS) of ₹100 crore.
What are the Sambhv Steel Tubes IPO opening and closing dates?
The IPO dates are yet to be announced. Stay tuned for updates.
What is the Sambhv Steel Tubes IPO price band?
The price band is currently not disclosed. It will be updated once officially announced.
What are the objectives of the Sambhv Steel Tubes IPO?
The net proceeds will be used for partial repayment/pre-payment of borrowings and for general corporate purposes.
Who are the promoters of Sambhv Steel Tubes Limited?
The promoters include Brijlal Goyal, Suresh Kumar Goyal, Vikas Kumar Goyal, Sheetal Goyal, Shashank Goyal, and Rohit Goyal.
How has the company’s financial performance been in recent years?
As of FY24, the company recorded a revenue of ₹1,289.38 crore and a PAT of ₹82.44 crore, showing strong year-on-year growth.
What is Sambhv Steel Tubes known for?
Sambhv Steel Tubes is a leading manufacturer of ERW steel pipes and structural tubes with a strategically located plant in Chhattisgarh.
Is there any Grey Market Premium (GMP) available for this IPO?
As of now, the GMP for Sambhv Steel Tubes IPO has not started. Updates will be shared as it becomes available.
How to apply for Sambhv Steel Tubes IPO?
You can apply via your trading platform or broker using the UPI method. Ensure your demat account is active.
How to improve chances of allotment in Sambhv Steel Tubes IPO?
Applying through multiple family demat accounts and submitting bids at the cut-off price can enhance your allotment probability.
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