Vibhor Steel Tubes IPO: Details, Subscription Status, GMP

Vibhor Steel Tubes IPO

Vibhor Steel Tubes IPO: On the first day of bidding, investors responded remarkably well to Vibhor Steel Tubes’ ₹72 crore initial public offering (IPO), with subscriptions reaching 27.63 times. When the bidding opened on February 13, offers for 9.92 crore shares were received, out of the 35.92 lakh shares that were available. The IPO is scheduled to close on February 15th. Chittorgarh claims that as of noon on the second day, 61.48 times had subscribed for the IPO.

Each equity share has a face value of ₹10, and the offer’s price range is set at ₹141–151 per share. Up to thirteen lots, each containing ninety-nine shares, are available for bid submission by retail investors. Retail investors must invest a minimum of ₹14,949 per lot at the upper end of the ₹151 IPO price range.

Vibhor Steel Tubes IPO Details

Bidding Dates13 Feb 2024-15 Feb 2024
Min. InvestmentRs 13,959
Lot Size 99
Price RangeRs 141- Rs 151
Issue Size72.17 Cr.

Subscription Status

As on 14, Feb 2024

Qualified Institutional Buyers6.99x
Non-Institutional Investor114.89x
Retail Individual Investor62.14x

About Vibhor Steel Tubes Ltd.

Vibhor Steel Tubes Limited manufactures and exports steel pipes and tubes, such as Mild Steel/Carbon Steel ERW Black and Galvanized Pipes, Hollow Steel Pipe, and Cold Rolled Steel (CR) Strips and Coils. The company was founded in 2003 and focuses on the heavy engineering sector in India. The company provides a wide range of steel pipes and tubes in various lengths to meet the needs of its customers. Its manufacturing process produces a wide variety of shapes and sizes, including square, round, rectangular, elliptical, and custom designs.

Financial Stats Of Last 3 Years

YearRevenueTotal AssetsProfit
2021510 Cr.173 Cr.0.69 Cr.
2022818 Cr.249 Cr.11.33 Cr.
20231,113 Cr.294 Cr.21.07 Cr.

GMP OF Vibhor Steel Tubes IPO

According to market observers, Vibhor Steel Tubes Ltd’s unlisted shares are trading Rs 120 higher in the grey market than the issue price. The Rs 120 grey market premium, or GMP, indicates that the grey market expects a 79.47 percent listing gain from the public issue. The GMP is constantly changing in response to market sentiment.

Vibhor Steel Tubes Key Features

  • The company has a longstanding relationship with its customer, Jindal Pipes Limited (JPL). Over time, it has progressed from providing job-work opportunities to full-time pipe production for JPL.
  • The company’s manufacturing facilities are strategically located. Unit I in Raigad, Maharashtra, is the sole export center, while Unit II near Hyderabad in Mahabubnagar District, Telangana, takes advantage of proximity for logistical efficiency and operational support.
  • Vibhor Steel Tubes’ financial performance has been consistent over the last few years. Its operating revenue was Rs. 510.47 crore, Rs. 817.99 crore, and Rs. 1,113.12 crore in fiscal years 2021, 22 and 23, respectively. The company’s profit after tax has also consistently increased over the last three years, reaching Rs. 0.69 crore, Rs. 11.33 crore, and Rs. 210.66 crore in 2021, 2022, and 2023, respectively.
  • It sells its products under the “Jindal Star” brand for Jindal Pipes Limited while adhering to global manufacturing standards. Their facility is certified by the Bureau of Indian Standards for ISO 9001:2015 and IS standards, which improves their ability to produce high-quality ERW steel pipes for both domestic and international markets.
  • The company worked with Jindal Pipes Limited to create a comprehensive network for identifying key customers and implementing effective marketing strategies. Its well-established distribution network and marketing system ensure product availability, allowing for an efficient supply chain, dedicated customer service, and timely product delivery. As of March 31, 2023, the company exported to approximately ten countries worldwide.

Risk’s Associated With Vibor Steel Tube Ltd.

  • The cost of materials consumed accounts for a significant portion of the company’s revenue, accounting for 95.58%, 91.85%, and 81.59% in fiscal years 2023, 2022, and 2021, respectively, according to restated figures. The company’s profitability and results of operations may be negatively impacted in the event of any disruption in the supply of raw materials or an increase in the price of materials, fuel costs, labor, or other inputs.
  • Because of the company’s reliance on working capital, operations may suffer if cash flows are insufficient. Its working capital requirements for FY 2024 and 2025 are estimated to be Rs. 226.23 crore and Rs. 288.12 crore, respectively.
  • The company obtained an unsecured loan of Rs. 3.83 crore, repayable on demand. Lenders’ demand for repayment may have an impact on the company’s cash flow and financial condition.
  • The company, its promoters/directors, and group companies are all involved in legal proceedings, and any negative outcome could have a significant impact on business, operations, and financial health.
  • As of March 31, 2023, the company’s contingent liabilities totaled Rs 4.04 crore. If they come to fruition, they could have an impact on the company’s finances and operations.
  • Because of the company’s reliance on working capital, operations may suffer if cash flows are insufficient. Its working capital requirements for FY 2024 and 2025 are estimated to be Rs. 226.23 crore and Rs. 288.12 crore, respectively.

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