Systematic Industries Makes Weak Debut with 1.54% Discount, Lists at ₹192.00 Against Solid Subscription

Systematic Industries Limited, the steel wire and cable manufacturer serving power transmission, infrastructure, and telecommunications sectors, made a disappointing debut on BSE SME on October 1, 2025. After closing its IPO bidding between September 24-26, 2025, the company commenced trading with a marginal discount opening at ₹193.80 but declined to ₹192.00 with losses of 1.54%, reflecting cautious investor sentiment towards the steel wire manufacturing sector despite solid subscription response.

Systematic Industries Listing Details

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Systematic Industries Limited launched its IPO at ₹195 per share with a minimum investment of 1,200 shares costing ₹2,34,000. The IPO received solid response with a subscription of 6.20 times - individual investors at moderate 3.36 times, NII at strong 7.94 times, and QIB at impressive 9.85 times, indicating robust institutional confidence in the steel wire manufacturing business despite relatively subdued retail participation.

First-Day Trading Performance Outlook

Listing Price: Systematic Industries share price opened at ₹193.80 representing a discount of 0.62% from the issue price of ₹195, and declined to ₹192.00, delivering losses of 1.54% for investors reflecting cautious market sentiment towards steel wire sector.

Growth Drivers and Challenges

Growth Drivers:

• Diversified Product Portfolio: Comprehensive range including carbon steel wire, high carbon wire, galvanized iron wire, cable armour wire, ACSR core wire, ACS wire, OPGW, and OFC serving power generation, data transmission, and distribution across multiple industries.
• Strong Manufacturing Infrastructure: Four factories with combined installed capacity of 1,00,000 MTPA across Daman, Diu, and Gujarat, ISO certified facilities, and dedicated quality and R&D teams ensuring operational excellence and product reliability.
• Impressive Financial Growth: Strong PAT growth of 49% to ₹18.46 crore and revenue growth of 21% to ₹449.21 crore in FY25, healthy ROE of 25.78%, and expanding presence across 25 states and exports to 30 countries demonstrating market traction.

Challenges:

• High Leverage Concerns: Elevated debt-to-equity ratio of 1.23 indicating substantial financial leverage requiring careful debt management and potential strain on cash flows amid working capital intensive steel wire manufacturing operations.
• Modest Profitability Margins: Low PAT margin of 4.13% and moderate EBITDA margin of 7.61% reflecting thin margins in competitive steel wire industry with limited pricing power and commodity price volatility risks.
• Aggressive Valuation Metrics: Post-issue P/E of 23.59x and price-to-book value of 4.05x reflecting premium valuation in highly competitive and fragmented segment requiring sustained growth to justify pricing amid execution challenges.

Utilisation of IPO Proceeds

• Debt Reduction: ₹95.00 crore for repayment of borrowings improving financial leverage from elevated 1.23x debt-to-equity ratio, reducing interest burden, and strengthening balance sheet for sustainable growth.
• General Corporate Purposes: Supporting business operations, working capital requirements, strategic initiatives, and expansion activities for sustained growth in competitive steel wire manufacturing segment.

Financial Performance of Systematic Industries

• Revenue: ₹449.21 crore for FY25, showing solid growth of 21% from ₹372.60 crore in FY24, reflecting strong market demand and successful business scaling in steel wire manufacturing.
• Net Profit: ₹18.46 crore in FY25, representing impressive growth of 49% from ₹12.41 crore in FY24, indicating operational leverage benefits and margin improvement despite competitive pressures in steel industry.
• Financial Metrics: Healthy ROE of 25.78%, moderate ROCE of 16.44%, elevated debt-to-equity ratio of 1.23, modest PAT margin of 4.13%, moderate EBITDA margin of 7.61%, and estimated market capitalisation of ₹428.76 crore.