Vibhor Steel Tubes IPO Financial Analysis

Vibhor Steel Tubes IPO Financial Analysis
Vibhor Steel Tubes IPO Financial Analysis

by Tanushree Jaiswal Last Updated: Feb 12, 2024 - 01:13 pm 610 Views
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Vibhor Steel Tubes was established on April 16, 2003, with a focus on manufacturing and exporting mild steel/carbon steel ERW black and galvanized pipes, hollow steel pipes and cold rolled steel (CR) strips/coils. With over two decades of experience in the industry the company has built a reputation as a trusted manufacturer, exporter and supplier of steel pipes and tubes to a range of heavy engineering industries across India. Vibhor Steel Tubes is set to launch its IPO on 13 February 2024. Here's a summary of the company's business model, strengths, risks and financials to assist investors in making informed decisions.

Vibhor Steel Tubes IPO Overview

Vibhor Steel Tubes Ltd, founded in 2003, produces and exports steel pipes and tubes across various heavy engineering sectors in India. Their offerings include ERW pipes for water transport, oil, and gas, alongside hot-dipped galvanized pipes for agriculture and infrastructure. They also manufacture hollow section pipes, primer painted pipes, and crash barriers for railway, highway, and road applications. With manufacturing facilities in Maharashtra and Telangana, and a warehouse in Haryana, the company employs 636 people. Their products cater to industries such as aerospace, shipbuilding, construction, power plants, oil & gas extraction, and refineries.

Vibhor Steel Tubes IPO Strengths

1- The company's partnership with Jindal Pipes began with job work and has evolved into full time production of pipes for Jindal Pipes, branded as Jindal Star.

2- With Jindal Pipes' assistance, the company has established diverse networking channels to identify its core customer base, enhancing marketing strategies for project procurement.

3- Company has a workforce of 636 employees.

4- Vibhor Steel Tubes has experienced promoters and a management team.

Vibhor Steel Tubes IPO Risk

1- The company's cash flow from financing and investing activities is negative. This could harm growth and operations.

2-  Steel prices are influenced by market demand, volatility, and economic conditions. Price fluctuations can affect business performance and financial health.

3- If the company doesn't have enough cash to cover its working capital needs, it can hurt its operations.

4- Total Borrowing of the company is continuously increasing from past 3 years.

Vibhor Steel Tubes IPO Details

Vibhor Steel Tubes IPO is scheduled from 13 to 15 February 2024. It has a face value of ₹10 per share and the IPO's price range is ₹141-151 per share.

Total IPO size (₹Cr) 72.17
Offer for sale (₹Cr) 0.00
Fresh issue (₹Cr) 72.17
Price band (₹) 141-152
Subscription dates 13 Feb 2024 to 15 Feb 2024

Financial Performance of Vibhor Steel Tubes IPO

Over the past three years, Vibhor Steel Tubes has witnessed a growth in its Profit After Tax, In 2021, the company recorded a PAT of ₹0.69 crore, an increase to ₹11.33 crore in 2022. Building upon this momentum, Vibhor Steel Tubes experienced further growth in 2023, with the PAT soaring to ₹21.07 crore upward trend in profitability highlights company's potential for expansion and success in the market.

Period 31 Mar 2023 31 Mar 2022 31 Mar 2021
Assets ( ₹ Crore) 293.63 248.54 172.93
Revenue ( ₹ Crore) 1,114.38 818.48 511.51
PAT ( ₹ Crore) 21.07 818.48 0.69
Total Borrowing
( ₹ Crore)
126.83 106.07 58.74

Vibhor Steel Tubes IPO Key Ratios

Over three fiscal years, Vibhor Steel Tubes has seen an improvement in its Return on Equity (ROE). Starting at 1.14% in FY21, ROE surged to 15.74% in FY22 and further elevated to 22.61% in FY23. This upward trend signifies that the company is utilizing its shareholders' equity more efficiently to generate profits. The consistent growth in ROE reflects improved financial performance and may enhance investor confidence in the company's prospects.

Particulars FY23 FY23 FY21
Sales Growth (%) 36.15% 60.01% -
PAT Margins (%) 1.89% 1.38% 0.13%
Return on Equity (%) 22.61% 15.74% 1.14%
Return on Assets (%) 7.18% 4.56% 0.40%
Asset Turnover Ratio (X) 3.80 3.29 2.96
Earnings per share (₹) 14.85 7.99 0.49

Vibhor Steel Tubes IPO Vs Peers

Among its peers, Vibhor Steel Tubes has the lowest Price to Earnings (P/E) ratio of 10.17, while Apl Apollo Tubes Ltd. has the highest P/E ratio of 64.88.  A lower P/E ratio generally indicates that the stock is undervalued relative to its earnings, while a higher P/E ratio suggests that the stock may be overvalued.

Company EPS Basic P/E(x)
Vibhor Steel Tubes 14.85 10.17
Apl Apollo Tubes Ltd. 23.15 64.88
Hi-tech Pipes Limited 3.06 47.91
Goodluck India Ltd 33.31 31.01
Rama Steel Tubes Ltd 1.22 37.75

Promoters of Vibhor Steel Tubes IPO

1. Vijay Kaushik

2. Vibhor Kaushik

3. Vijay Laxmi Kaushik

4. Vijay Kaushik HUF

The company was promoted by Vijay Kaushik, Vibhor Kaushik, Vijay Laxmi Kaushik and Vijay Kaushik HUF. Currently these promoters collectively hold 93.39% of the company. However, following the Initial Public Offering this ownership stake is expected to be diluted.

Final Words

This article takes a closer look into Vibhor Steel Tubes IPO, scheduled for subscription from 13 February 2024. It suggests that potential investors thoroughly review the company's details, financials, subscription status and GMP. Grey Market Premium indicates the anticipated listing performance, providing valuable insights for investors to make well informed decisions. On 13 th February 2024, Vibhor Steel Tubes IPO GMP is ₹130 up from the issue price reflecting an 86.09% increase, GMP is dynamic so investors must track GMP.
 

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About the Author

Tanushree is a seasoned professional with 6 years of experience in the Fintech and Edtech industry.

Disclaimer

Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.
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