Sambhv Steel Tubes Lists at 34% Premium, Beats Grey Market Expectations

The electric resistance welded steel pipes manufacturer, Sambhv Steel Tubes Limited, made an impressive debut on both BSE and NSE platforms on July 2, 2025. After closing its IPO bidding between June 24 - June 27, 2025, the company commenced trading with a substantial 34% premium to its issue price, significantly exceeding grey market expectations and delivering strong returns to investors. This book-building IPO raised ₹540 crore with an outstanding subscription of 30.33 times, reflecting exceptional investor confidence in the steel manufacturing sector as the company seeks to reduce debt burden and strengthen its backward-integrated manufacturing capabilities in Chhattisgarh.

Sambhv Steel Tubes Listing Details

Sambhv Steel Tubes Limited launched its IPO at ₹82 per share with minimum investment of 182 shares costing ₹14,924. The IPO received exceptional response with subscription of 30.33 times - QIB segment leading at remarkable 66.36 times, NII at 33.88 times, and retail at 8.56 times, demonstrating strong institutional confidence. The share price listed at ₹110 on NSE and ₹110.1 on BSE, delivering impressive premiums of 34.15% and 34.27% respectively, substantially exceeding grey market expectations of ₹96.

Listing Price: The Sambhv Steel Tubes share price opened at ₹110 on NSE and ₹110.1 on BSE on July 2, 2025, representing premiums of 34.15% and 34.27% respectively from issue price of ₹82, significantly outperforming grey market expectations.

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

First-Day Trading Performance Outlook

Sambhv Steel Tubes delivered robust debut performance, substantially outperforming grey market predictions which had indicated ₹96 pricing, reflecting strong investor confidence in the backward-integrated steel manufacturer. The company, incorporated in 2017, operates India's only single-location backward-integrated facility in Chhattisgarh, manufacturing ERW steel pipes and structural tubes with strategic access to iron ore from Navratna PSU and coal from Maharatna PSU, serving distribution network across 15 states.

Growth Drivers and Challenges

Growth Drivers:

• Unique Market Position: India's only single-location backward-integrated facility providing cost advantages and operational efficiencies in steel pipe manufacturing
• Strategic Location: Manufacturing facility in Chhattisgarh with proximity to Asia's largest coal mines (250km) and access to quality raw materials from PSU sources
• Comprehensive Product Portfolio: Diversified range including sponge iron, blooms/slabs, narrow-width HR coils, and GI pipes serving multiple market segments
• Wide Distribution Network: Established presence across 15 states with strong market penetration in key regions including Maharashtra, Gujarat, Haryana, and Rajasthan

Challenges:

• Fully Priced Valuation: Post-issue P/E of 44.54 suggests premium pricing despite strong subscription response and listing performance
• Debt Levels: Moderate debt-to-equity ratio of 0.80 requiring careful financial management despite planned debt reduction from IPO proceeds
• Revenue Volatility: Revenue decline in 9M FY25 to ₹1,018.81 crore from ₹1,289.38 crore in FY24 indicating cyclical industry challenges
• Steel Industry Cycles: Operating in cyclical steel sector subject to commodity price fluctuations and demand variations

Utilisation of IPO Proceeds

• Debt Repayment: ₹390.00 crore for pre-payment or scheduled repayment of outstanding borrowings to improve capital structure and reduce financial leverage
• General Corporate Purposes: Remaining ₹50 crore for strategic initiatives, operational requirements, and business development activities

Financial Performance of Sambhv Steel Tubes

Revenue: ₹1,018.81 crore for 9M FY25, showing decline from ₹1,289.38 crore in FY24, reflecting cyclical industry dynamics and market conditions

Net Profit: ₹40.69 crore in 9M FY25, representing decline from ₹82.44 crore in FY24, indicating margin pressure from market conditions

Financial Metrics: Strong ROE of 25.42%, healthy ROCE of 17.66%, moderate debt-to-equity of 0.80, PAT margin of 6.41%, and EBITDA margin of 12.43%

Sambhv Steel Tubes represents a compelling investment opportunity in the steel manufacturing sector with exceptional listing performance delivering 34% premium and significantly exceeding grey market expectations. Despite challenges including revenue volatility and premium valuation, the company's unique backward-integrated model, strategic location advantages, and comprehensive product portfolio provide significant competitive positioning in India's expanding infrastructure development landscape, validating strong investor confidence reflected in the outstanding subscription and listing performance.