VMS TMT Makes Modest Debut with 2.02% Premium, Opens at ₹105 Following Strong Subscription

VMS TMT Limited, the TMT bars manufacturer, made a modest debut on BSE and NSE on September 24, 2025. After closing its IPO bidding between September 17-19, 2025, the company commenced trading with a 6.06% premium, opening at ₹105 but declining to ₹101, showing gains of 2.02%.

VMS TMT Listing Details

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VMS TMT Limited launched its IPO at ₹99 per share with a minimum investment of 150 shares costing ₹14,850. The IPO received an exceptional response with a subscription of 102.24 times - retail investors at a solid 47.85 times, NII at an outstanding 227.08 times, and QIB at a strong 120.80 times.

First-Day Trading Performance Outlook

• Listing Price: VMS TMT share price opened at ₹105, representing a premium of 6.06% from the issue price of ₹99, but declined to ₹101 during trading, delivering modest gains of 2.02% for investors, reflecting cautious market sentiment.

Growth Drivers and Challenges

Growth Drivers:

• Strategic Market Position: Established TMT bars manufacturer with a licensed agreement to market products under the 'Kamdhenu NXT' brand in Gujarat, providing brand recognition and market positioning advantages in the construction steel sector.
• Strong Distribution Network: Well-established distribution network with 3 distributors and 227 dealers across Gujarat and other states, enabling efficient product supply and market penetration in Tier II and III cities.
• Debt Reduction Focus: IPO proceeds of ₹115 crore primarily allocated for debt repayment, improving financial leverage and reducing interest burden from the current elevated debt-to-equity ratio.

Challenges:

• Extremely High Leverage: Alarming debt-to-equity ratio of 3.77, indicating severe financial leverage requiring immediate attention and careful debt management to maintain operational stability and growth capabilities.
• Revenue Decline Trend: Revenue decreased 12% to ₹771.41 crore in FY25 despite PAT growth of 14%, indicating challenging market conditions and potential demand weakness in the steel sector.
• Thin Profit Margins: Low PAT margin of 1.91% and modest EBITDA margin of 5.91% indicating a limited profitability cushion and vulnerability to cost pressures in the competitive steel market.

Utilisation of IPO Proceeds

• Debt Reduction: ₹115 crore for repayment and prepayment of certain borrowings, improving the financial leverage ratio and reducing interest costs from current high debt levels.
• General Corporate Purposes: Supporting business operations, working capital requirements, and strategic initiatives for long-term growth while managing financial obligations.

Financial Performance of VMS TMT

• Revenue: ₹771.41 crore for FY25, showing a decline of 12% from ₹873.17 crore in FY24, reflecting challenging market conditions and demand pressures in the TMT bars sector.
• Net Profit: ₹15.42 crore in FY25, representing growth of 14% from ₹13.47 crore in FY24, indicating operational efficiency improvements despite revenue headwinds.
• Financial Metrics: Concerning the debt-to-equity ratio of 3.77, moderate ROCE of 12.79%, solid RoNW of 20.14%, thin PAT margin of 1.91%, modest EBITDA margin of 5.91%, and estimated market capitalisation of ₹501.28 crore.