
Sambhv Steel Tubes is set to launch its initial public offering on Wednesday, June 25. The metal pipes manufacturer is selling its shares in the range of Rs 77-82 apiece with a lot size of 182 equity shares and its multiples thereafter. The three-day bidding for the issue shall conclude on Friday, June 27.
Incorporated in 2017, Sambhv Steel Tubes is a manufacturer of electric resistance welded (ERW) steel pipes and structural tubes (hollow section) in India. Its manufacturing facility is located in Village Tilda Tehsil, Raipur, Chhattisgarh. It has a wide distribution network in India which extends across 15 states and one union territory.
Sambhv Steel Tubes is looking to raise a total of Rs 540 crore via IPO, including a fresh share sale of Rs 440 crore and an offer-for-sale of up to 100 crore by its promoters and existing shareholders. The company shall be using its net proceeds from the issue towards pre-payment or re-payment of a portion of certain outstanding borrowings; and general corporate purposes.
Sambhv Steel Tubes mobilised Rs 161.25 crore from 19 anchor investors as it allocated 1.96 crore shares at Rs 82 apeice. Astorne Capital VCC Arven, Citigroup Global Markets Mauritius, Nomura Singapore, Societe General, WhiteOak Capital Mutual Fund (MF), Motilal Oswal MF, Nuvama Asset Management and BNP Paribas Financial Markets participated in the anchor book.
For the nine-months ended on December 31, 2024, Sambhv Steel Tube reported a net profit of Rs 40.69 crore with a revenue of Rs 1,018.81 crore. The company clocked a net profit of Rs 82.44 crore with a revenue of Rs 1,289.38 crore for financial year 2023-24. The company shall command a market capitalization more than Rs 2,400 crore.
Sambhv Steel Tubes has reserved 50 per cent of the net offer for qualified institutional bidders (QIBs), while non-institutional investors (NIIs) will get 15 per cent of allocation. Remaining 35 per cent of the offer shall be allocated towards retail investors of the issue. Ahead of its IPO, the company is commanding a grey market premium of Rs 5 apiece, signaling 6 per cent listing gains.
Nuvama Wealth Management and Motilal Oswal Investment Advisors are the book running lead managers of the Sambhv Steel Tubes IPO, while Kfin Technologies is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE on Wednesday, July 02. Here's what a host of brokerage firms said about the IPO of Sambhv Steel Tubes:
Anand Rathi Research
Rating: Subscribe for long-term
Sambhv Steel Tubes has a backward integrated facility in India with a strategically located manufacturing plants resulting in operational efficiencies and strong process innovation and execution capabilities allowing us to produce value-added products with widespread, well connected distribution network across India along with an advantage of the growing demand for quality ERW steel pipes and tubes, said Anand Rathi.
"The issue is valuing at P/E of 44 times to its annualized FY25 earnings, EV/EBITDA of 17 times. We believe that the IPO is fully priced and recommend a 'subscribe for long term' rating to the IPO," it said.
SBI Securities
Rating: Subscribe for long-term
Sambhv Steel stands out as one of the players in India with a backward integration facility, enabling it to offer a diverse portfolio of premium products in a cost-efficient manner. Between FY24–FY25, it enhanced its manufacturing capabilities to include stainless steel bloom, SS hot rolled coils, SS cold rolled coils and SS HRAP coils—products with high margin potential, said SBI Securities.
"With ramp up in capacity utilization of CR coils (SS) and Pre-galvanized (GP) pipes expected over the next 2-4 quarters, margins are likely to expand. Strong industry tailwinds, robust backward integration and a growing portfolio of value-added products, the company is well-positioned for sustained growth. We recommend investors to subscribe to the issue with a long-term horizon," it said.
BP Equities
Rating: Subscribe for long-term
Sambhv Steel is currently valued at a P/E ratio of 273 times, based on FY25 annualized earnings, which is relatively high, said BP Equities. "However, it remains well-positioned for future growth, considering that it is the only player in this emerging segment with an intention to repay debt and invest in its subsidiary," it added with a 'subscribe for long-term rating.
Canara Bank Securities
Rating: Subscribe for long-term
Sambhv Steel Tubes Limited presents a fundamentally strong and operationally integrated business model, supported by strategic raw material sourcing, robust distribution, and a growing focus on high-margin value-added products. Its backward integration offers cost advantages and supply chain control, positioning the company well for scalable growth, said Canara Bank Securities.
"The issue is priced at slightly above the peer average. While the valuations appear marginally premium, they are backed by the company's unique integration model, improving product mix, and a strong growth outlook. We recommend a 'subscribe' rating for long-term investors, considering Sambhv’s compelling fundamentals, cost advantages, and sectoral tailwinds," it said.
Bajaj Broking
Rating: Subscribe for long term
According to the management, its bottom line for FY23 is attributed to higher provisioning for new capacities that went on stream and 9M-FY25 lower profits is due to higher depreciation, higher employees’ cost, finance cost, and amortization adjustments, said Bajaj Broking.
"Since the company will clear its debt to the tune of Rs 390 crore post IPO, it will lower its finance cost and translate into higher net profits. Addition from new capacities will help in boosted top and bottom lines," it added with a 'subscribe' for long-term rating.
Marwadi Financial Services
Rating: Subscribe
"We assign 'subscribe' rating to this IPO as the company is well-positioned to take advantage of the growing demand for quality ERW steel pipes and tubes with its strong process innovation and execution capabilities," said Marwadi Financial Services. "It is available at reasonable valuation as compared to its peers," it added.
Kunvarji Finserv
Rating: Subscribe for long-term
"We recommend subscribing to this IPO with a medium to long-term view. Its consistent revenue growth, capacity expansion, and diversified product portfolio support its growth-oriented journey. Key manufacturers of ERW steel pipes and related products with a wide variety, the company is well-positioned to benefit from increasing demand across sectors," said Kunvarji Finserv.