Sambhv Launches IPO, Sets ₹2,400 Crore Valuation
IPO Overview: Price Band and Fundraising Target
Sambhv Steel Tubes, a leading Indian manufacturer of electric resistance welded (ERW) pipes, has opened its initial public offering (IPO) with a price range between ₹77 and ₹83 per equity share. At the higher end of the band, the company’s post-issue valuation reaches around ₹2,400 crore.
The IPO aims to raise up to ₹540 crore, which includes a fresh share issue worth ₹440 crore and an offer-for-sale (OFS) component of ₹100 crore, where existing promoters and shareholders will divest part of their stakes.
Purpose of the Issue: Strengthening Finances and Operations
The majority of the funds raised through the fresh issue—around ₹390 crore—will be used to repay outstanding borrowings. This move is intended to ease the company’s debt burden and improve financial stability.
The remaining proceeds will support general business activities, such as improving working capital, pursuing expansion opportunities, and upgrading operational efficiency across its existing value chain.
Company Profile: Vertically Integrated Manufacturing Advantage
It operates a backward-integrated production facility in Raipur, Chhattisgarh, allowing it to control the full production lifecycle—from sponge iron to hot-rolled coils to finished pipes.
This integration gives Sambhv a competitive edge by reducing dependence on external suppliers and ensuring better cost control and product quality throughout its manufacturing operations.
Distribution Network and Market Presence
As of the end of FY24, Sambhv had an annual production capacity of approximately 600,000 tonnes. The company services customers through 33 distributors spread across 15 Indian states and one union territory, backed by a retail network of over 600 dealers.
Its product range caters to multiple sectors, including infrastructure, telecom, oil and gas, automotive, agriculture, firefighting, and solar—positioning it as a well-diversified steel tube supplier.
Promoters and Shareholding Details
Founded in 2017 under the name Sambhv Sponge Power, the company rebranded in 2024 to better align with its core business in steel pipes.
The promoter group includes members of the Goyal family—namely Brijlal, Suresh Kumar, Vikas, Sheetal, Shashank, and Rohit Goyal—who will collectively divest ₹100 crore worth of shares through the OFS component of the IPO.
Financial Highlights: Consistent Revenue and Profit Growth
Sambhv reported strong financial results in FY24, with revenue rising to ₹1,286 crore, up from ₹937 crore in FY23—representing a growth of 37%.
This performance reflects the company’s increasing operational efficiency and growing demand for domestically manufactured ERW pipes.
According to CRISIL, the Indian market for steel pipes and tubes is expected to grow at a compound annual growth rate (CAGR) of 8–9%
IPO Allocation and Structure
The IPO will follow a book-building process. 50% of the shares are reserved for Qualified Institutional Buyers (QIBs), 15% for High Net-Worth Individuals (HNIs), and the remaining 35% for retail individual investors.
This allocation model is designed to ensure balanced participation from large institutions and retail investors alike, potentially increasing the stability and attractiveness of the IPO.
Use of Proceeds:
A major portion of the capital raised will go toward repaying loans, which is expected to reduce interest burdens and enhance the company’s credit profile.
The remaining funds will be used for operational improvements and scaling business operations to meet rising demand across sectors. This includes investments in working capital and modernization of production facilities.
Investment Perspective: Opportunities and Risks
Its backward-integrated operations and expanding market presence make it a strong contender in the ERW pipe space.
However, prospective investors should be aware of potential challenges such as fluctuations in global steel prices, supply chain constraints, and risks tied to aggressive capacity expansion. Managing these effectively will be key to sustaining margins and returns.
Conclusion: A Strong Step Toward Public Growth
Sambhv Steel Tubes’ IPO is a strategic move to capitalize on its growth trajectory, improve its balance sheet, and strengthen market positioning. With a valuation of ₹2,400 crore and a well-structured offering, the company aims to build investor confidence while driving its long-term expansion in India’s infrastructure-driven economy.
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