Sambhv Steel's shares list at 34% premium to issue price
What's the story
Sambhv Steel Tubes Ltd made a strong debut on the Indian stock market today, with its shares listing at a premium of over 34% against the issue price of ₹82. The stock opened at ₹110.1 on the BSE and ₹110 on the NSE, marking a jump of 34.26% and 34.14%, respectively, from its issue price. At this price, the company's market capitalization stood at over ₹2,966 crore.
IPO performance
IPO subscribed over 28 times
The ₹540-crore initial public offering (IPO) of Sambhv Steel was subscribed 28.46 times on the last day of bidding on Friday. The IPO consisted of a fresh issue of equity shares worth ₹440 crore and an offer-for-sale (OFS) of shares worth ₹100 crore by promoters. The funds raised from the fresh issue will be used for debt repayment and general corporate purposes.
Market debut
Grey market premium and anchor investors
Sambhv Steel's gray market premium (GMP) ahead of its debut was ₹14 per share in the unofficial market, indicating a listing pop of 17.07% for investors. The Raipur-based company had already raised ₹161.25 crore from anchor investors such as WhiteOak Capital Mutual Fund (MF), Motilal Oswal MF, Nuvama Asset Management, Astorne Capital VCC Arven and Citigroup Global Markets Mauritius among others.
Company profile
Market position and industry growth
Sambhv Steel is a key manufacturer of electric resistance welded (ERW) steel pipes and structural tubes (hollow section) in India. According to a Crisil report, the demand for domestic steel pipes and tubes is expected to grow at a CAGR of 5-6% to 12.50-13.50 million ton per annum (MTPA) in FY25 from 8.8 MTPA in FY19.
Financials
FY24 financials and net worth
In FY24, Sambhv reported a revenue of ₹1,285.76 crore, up 37% year-on-year. The company's profit stood at ₹82.44 crore with EBITDA margins at 12.40%. Its net worth doubled from ₹210.4 crore in FY23 to ₹438.28 crore in FY24 while borrowings also surged to ₹619.14 crore—an area that this issue hopes to address.