M P K Steels Makes Solid Debut with 6.33% Premium

M P K Steels (I) Limited, the manufacturer of structural steel products including MS channels, beams, angles, squares, rounds, and flats for railways, telecom, power, and construction sectors, made a solid debut on BSE SME on October 6, 2025. After closing its IPO bidding between September 26-30, 2025, the company commenced trading with a 1.27% premium opening at ₹80 and rose to ₹84 with gains of 6.33%.

M P K Steels Listing Details

M P K Steels (I) Limited launched its IPO at ₹79 per share with a minimum investment of 3,200 shares costing ₹2,52,800. The IPO received a weak response with a subscription of just 1.54 times - individual investors at 0.58 times, NII at 0.65 times, and QIB at 19.95 times.

First-Day Trading Performance Outlook

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• Listing Price: M P K Steels share price opened at ₹80, representing a premium of 1.27% from the issue price of ₹79, and rose to ₹84, delivering gains of 6.33% for investors, reflecting positive market sentiment toward the steel products sector.

Growth Drivers and Challenges

Growth Drivers:

• Diversified Product Portfolio: Comprehensive range of MS channels, beams, angles, squares, rounds, and flats serving railways, telecom, power, automotive, construction, fabrication, offshore structures, and infrastructure development industries with MS channels as the main revenue driver.
• Strategic Manufacturing Setup: Dual plant operations at a single location in RIICO Industrial Area, Jaipur, with an extensive range of dies for diverse steel measurements, a distribution network across Rajasthan, Punjab, West Bengal, Gujarat, Haryana, UP, Assam, and MP.
• Strong Financial Performance: Exceptional PAT growth of 95% to ₹6.05 crore and revenue growth of 10% to ₹208.03 crore in FY25, healthy ROE of 28.55%, moderate ROCE of 19.32%, demonstrating strong operational leverage.

Challenges:

• Razor-Thin Profitability Margins: Very low PAT margin of 2.93% and modest EBITDA margin of 4.21% indicating minimal pricing power in the highly competitive structural steel manufacturing segment with vulnerability to raw material price volatility.
• Valuation and Scale Concerns: Post-issue P/E of 13.29x appearing fully priced, relatively small operational scale with ₹208.03 crore revenue, and operating in the competitive steel products segment requiring continuous cost management.

Utilisation of IPO Proceeds

• Machinery and Solar Plant: ₹2.65 crore for the purchase of machinery and dies, and ₹7.00 crore for the installation of the solar plant, reducing power costs and enhancing manufacturing capabilities.
• Working Capital Requirements: ₹9.18 crore for meeting working capital requirements supporting inventory management and operational scale-up in the structural steel manufacturing business.
• General Corporate Purposes: Supporting business operations, strategic initiatives, and expansion activities for sustained growth in the competitive steel products segment.

Financial Performance of M P K Steels

• Revenue: ₹208.03 crore for FY25, showing steady growth of 10% from ₹189.17 crore in FY24, reflecting consistent market demand in structural steel products.
• Net Profit: ₹6.05 crore in FY25, representing exceptional growth of 95% from ₹3.11 crore in FY24, indicating substantial operational leverage benefits from product mix optimisation and cost-effective processes, enabling higher margins.
• Financial Metrics: Healthy ROE of 28.55%, moderate ROCE of 19.32%, moderate debt-to-equity ratio of 0.76, very low PAT margin of 2.93%, modest EBITDA margin of 4.21%, and estimated market capitalisation of ₹85.52 crore.