Venus Pipes & Tubes Ltd IPO - 7 things to know

Venus Pipes & Tubes Ltd, is a fast growing stainless steel pipes and tubes business, had filed its draft red herring prospectus (DRHP) in late December 2021 and SEBI is yet to give its observations and approval for the IPO. Normally, the IPOs are approved by SEBI within a period of 2 to 3 months unless there are other queries or clarifications that the regulator has.

The IPO of Venus Pipes & Tubes Ltd can be expected logically around April or May. It will entirely be a fresh of shares. However, the next steps in the IPO process will only start once the approval from SEBI is received.

7 interesting fact to know about the Venus Pipes & Tubes Ltd IPO

1) Venus Pipes & Tubes Ltd has filed for an IPO with SEBI which comprises of a fresh issue of 50.74 lakh shares. However, since the price band for the proposed IPO has not yet been announced till date, the size of the fresh issue / IPO / is not precisely know.

However, the company has not yet disclosed in the draft red herring prospectus even the indicative size of the IPO.

2) There will be no offer for sale (OFS) portion of the Venus Pipes & Tubes IPO, either from the promoters or even from the early investors. The OFS component normally does not result in any fresh fund infusion or dilution of the capital or the EPS. That is not the purpose of the OFS anyways.

However, the selling of stake by the promoter will increase the free float of the company and facilitate listing of the stock.

3) The fresh issue portion of 50.47 lakh shares will be issued by the company. In this case, not only will the fresh funds come into the business but this move will also be dilutive to the capital supplier and also EPS dilutive.

The fresh component will be predominantly used for financing the project towards capacity expansion and for backward integration. They will also look to get into the manufacture of hollow pipes as part of its product diversification plan. It also plans to grow the stainless steel business likely to see aggressive growth in the coming days.
 

4) Venus Pipes and Tubes operates under the brand name “Venus”. It predominantly supplies these products for diverse and multiple applications in diverse sectors, including a plethora of sectors like chemicals, engineering, fertilisers, pharmaceuticals, power, food processing, paper and oil & gas.

5) Venus Pipes is one of the fast-growing stainless steel pipes and tubes manufacturer and exporter in India. It produces and supplies seamless tubes/pipes and welded tubes/pipes.

In terms of product categories, Venus Pipes is into stainless steel high precision & heat exchanger tubes, stainless steel hydraulic & instrumentation tubes, stainless steel seamless pipes, stainless steel welded pipes and stainless steel box pipes.

Venus sells its products domestically and internationally either directly to focussed customers or through traders / stockists and authorized distributors. Venus Pipes currently exports to 18 countries including Brazil, UK, Israel and the European Union.

6) The company comes with some in-built advantages like global Accreditations, specialised Stainless Steel Pipes and Tubes. There is customer diversification also as products are sold domestically and internationally.

There are some risks in this business model. There are established competitors in this field and demand may not always be robust as it is now. The industry, by itself, is extremely competitive. The business also runs the risk of product and technology obsolescence.

7) The IPO of Venus Pipes & Tubes Ltd will be lead managed by SMC Capital Ltd. They will act as the sole book running lead managers or BRLMs to the issue.

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