At a Glance:
Sambhv Steel Tubes is raising ₹540 Cr via IPO — ₹440 Cr fresh + ₹100 Cr OFS. Price band: ₹77–₹82. The Chhattisgarh-based ERW steel pipe maker boasts backward integration, 25 MW captive power, and 1.7 MTPA capacity. But FY25 margins have cooled. Fair value: ₹70–₹95.
1️⃣ TL;DR – The Steel Pipe Cheatsheet 🧾
- 📅 IPO Window: June 25–27, 2025
- 💰 Issue Size: ₹540 Cr (₹440 Cr fresh + ₹100 Cr OFS)
- 💸 Price Band: ₹77–₹82 per share
- 🔩 Lot Size: 182 shares (₹14,924 per lot)
- 🔨 Use of Proceeds: ₹390 Cr debt repayment, rest for GCP
- 🏭 Business: ERW steel pipes, HR coils, sponge iron – fully backward integrated
- ⚙️ Capacity: 1.7 MTPA, expanded from 1.1 MTPA in FY25
- 📉 FY24 PAT: ₹82.4 Cr | 9M FY25 PAT: ₹40.7 Cr → margin hit
- 📊 P/E (FY24): 29.29x | P/E (9M FY25 Annualized): 44.5x
- 🧮 Fair Value Range: ₹70–₹95
- 🧠 Verdict: Strong ops, expanding capacity, but fully priced — medium-term hold if you believe in steel demand
2️⃣ IPO Ka Breakdown – Sambhv’s Pipe Dream 💡
| Detail | Info |
|---|---|
| IPO Size | ₹540 Cr (₹440 Cr fresh, ₹100 Cr OFS) |
| Price Band | ₹77 – ₹82 |
| Lot Size | 182 shares (₹14,924) |
| Anchor Bidding | June 24, 2025 |
| Listing Date | July 2, 2025 (BSE + NSE) |
| Face Value | ₹10 |
| Post-Issue Market Cap | ₹2,416.22 Cr |
| BRLMs | Nuvama, Motilal Oswal |
| Registrar | KFin Tech |
| Promoter Stake Dilution | 71.9% → 57.4% post-IPO |
3️⃣ The Business – “India’s Only Fully-Loaded Steel Pipe Factory?” 🧱
What they make:
Sambhv is not just another ERW pipe company. It’s a vertically integrated steel value chain monster:
- 🔄 Backward Integration: Sponge iron → Slabs → HR Coils → Pipes
- 🔋 25 MW Captive Power Plant: Reduces grid dependency
- 🔬 High-Margin Pipes: GI, GP, CRFH, HRAP… If it’s a pipe, they probably make it
- 🌍 Distribution: 43 distributors + 700 dealers across 15 states
🧠 Trivia: They’re 1 of only 2 Indian companies that use narrow-width HR coils in-house. The other? APL Apollo. Big league stuff.
4️⃣ Financials – “Healthy Pipes, Slight Rust” 💰
| Period | Revenue (₹ Cr) | PAT (₹ Cr) | EBITDA Margin | PAT Margin |
|---|---|---|---|---|
| FY22 | 820.75 | 72.11 | 15.2% | 8.8% |
| FY23 | 939.00 | 60.38 | 12.5% | 6.4% |
| FY24 | 1,289.38 | 82.44 | 12.4% | 6.4% |
| 9M FY25 | 1,018.81 | 40.69 | 10.4% est. | 4.0% |
- ⚠️ Red flag alert: PAT margin has slipped to 4% in 9M FY25
- 🧮 Reason: Higher depreciation, employee cost, and amortization from new plant
- 💡 Debt prepayment (₹390 Cr) could fix this going forward
5️⃣ Valuation – Is It “Fully Welded” or “Overheated”? 🔍
| Metric | Value |
|---|---|
| Post-IPO EPS (9M FY25) | ₹1.84 (annualized = ₹2.45) |
| IPO P/E (Upper Band) | 44.5x on 9M FY25 EPS |
| FY24 P/E | 29.29x on FY24 EPS (₹2.8) |
| Post-Issue NAV | ₹31.17 |
| P/B Ratio | 2.63x |
🧮 EduFair Value Range: Based on P/E 25–35 and P/B 2.0–3.0
- Lower bound: ₹31 × 2.0 = ₹62
- Upper bound: ₹31 × 3.0 = ₹93
- Or: ₹2.5 EPS × 25 = ₹62.5 | ₹2.5 × 35 = ₹87.5
🎯 Final FV Range: ₹70–₹95
At ₹82, the IPO sits slightly above comfort zone. But if profits rebound post debt-cut, upside exists.
6️⃣ Peer Comparison – Steel Thoda Comparisons 🔩
| Peer Company | P/E | EBITDA Margin | ROE |
|---|---|---|---|
| APL Apollo | 64.8x | 12–13% | 25%+ |
| Hariom Pipes | 19.3x | 15% | 20%+ |
| JTL Industries | 29.1x | 10–12% | 22% |
| Sambhv Steel (IPO) | 29–44x | 12.4% (FY24) | 25.4% |
➡️ Sambhv stands shoulder-to-shoulder on margins & ROE — but trades richer than some peers (esp. Hariom & JTL).
7️⃣ Should You Apply? Let’s Weld This Shut 🔧
✅ The Good:
- 👷 Fully integrated model = control on costs
- 🧪 In-house narrow-width HR coil production = premium pipe potential
- ⚡ 25MW captive power = efficiency + ESG-friendly points
- 🔧 Expansion done = future growth without capex headache
- 📈 Solid FY24 numbers + room for margin rebound post debt trim
❌ The Not-So-Good:
- 🔺 Margins slipping in FY25
- 📊 P/E a bit rich vs peers
- 🧮 Low OFS stake = minimal liquidity for exit
- 📦 Heavy distribution reliance on dealers and channel push
🧠 EduInvesting Verdict – “Medium-Term Power Play, But Not a Listing Popper”
This IPO isn’t a “Day 1 Doubler” — but it might quietly compound. Think of it like a welded pipe — low flash, solid core.
- 🧘♂️ Apply if: You want long-term exposure to infra-led steel demand and don’t mind waiting 12–18 months for PAT to shine
- 🏃♂️ Avoid if: You’re looking for a Zomato-style hype pop
💬 Rating: 7.5/10 — Solid base metal story, just needs polishing
📊 Tags: Sambhv Steel Tubes IPO, ERW Pipes, Infra Demand, Steel Sector India, IPO Analysis 2025, EduInvesting, Motilal Oswal IPO, Nuvama IPO
✍️ Written by Prashant | 📅 June 23, 2025
