Vibhor Steel sets IPO price band at Rs 141-151; check expansion plans, financials, other details here

Haryana-based Vibhor Steel Tubes, a manufacturer of high-quality steel tubes and pipes, is set to hit primary markets on February 13 to raise Rs 72 crore through its forthcoming initial public offering (IPO). The company has fixed a price band of Rs 141-151 per share for its proposed IPO which will close on February 15. The equity shares of the company are proposed to be listed on NSE and BSE. Khambatta Securities is the sole book running lead manager to the offer and KFIN Technologies as the registrar to the offer. The proceeds from the issue will be utilised for working capital requirements.

Vibhor Steel reported steady performance for the last financial year, with net profit growing from Rs 11.33 crore for the year ended March FY22 to Rs 21.06 crore as of March 31, 2023. Revenue from operations increased to Rs 1,113.12 crore from Rs 818 crore during the same period.

Vibhor Kaushik, Managing Director, Vibhor Steel Tubes (VSTL) said, “With such strong numbers in terms of turnover, it is the right time to go public for Vibhor Steel Tubes. The turnover will only increase from here on.”

Meanwhile, the company on February 7 also announced that it is on track to complete its expansion plan at Sundargarh in Orissa by the end of the first quarter ended June 30, 2024 (Q1FY2025). It has acquired the land for the project, and orders for plant and machinery have already been placed and have been funded through internal accruals.

With the commissioning of the new project, Vibhor Steel’s capacity will increase by 1,20,000 MT to 3,41,000 MT. VSTL manufactures steel products such as electric resistance welded pipes, hot-dipped galvanized pipes, hollow section pipes, primer painted pipes, SS pipes and crash barriers at its plants located in Maharashtra and Telangana with a total capacity of 2,21,000 MTPA. The company plans to manufacture value-added products, such as crash barriers, which will improve margins.

Vibhor Steel operates its business through two manufacturing units - one is in Raigad, Maharashtra, through which 100% of export sales occur, and the second is located in Mahabubnagar district, Telangana. The company supplies its products to western and southern market companies in Maharashtra, Gujarat, Madhya Pradesh, Telangana, Karnataka and Tamil Nadu. The company manufactures and exports steel pipes and tubes to various heavy engineering industries, which are used for frames and shafts, bicycle frames, furniture, shockers, and structural & engineering purposes.

Vijay Kaushik, Chairman and Executive Director, Vibhor Steel Tubes, said, “We are looking to manufacture high-margin products like round and galvanised steel products to improve our operating margins. Moreover, we are also exploring tapping the export markets once the new production facility goes on stream. Proximity to raw material supply will be an added advantage for the company to cut its freight cost once the current expansion plan is completed.”

Meanwhile, the company has renewed its agreement with Jindal Pipes, with effect from April 1, 2023, to manufacture and supply the finished goods under the brand name Jindal Star to Jindal Pipes and its approved customers based on monthly card rates. The tenure of this agreement is for six years and can be further renewed if required by both parties. According to the management, as much as 88% of the revenue comes from Jindal Pipes.