Vibhor Steel Tubes IPO listed at 181% premium, hits upper circuit

Vibhor Steel tubes IPO Listing

Vibhor Steel Tubes’ shares debuted on the exchanges on Tuesday, February 20, with an 181% premium, following a strong response. With a premium of 178.8%, the stock was listed on the BSE at ₹421, compared to an offer price of ₹151. In the meantime, the stock is trading at ₹425 on the NSE, a premium of 181.46%.

There were several contributing factors to the strong listing. Vibhor Steel has a wide range of products that it offers to different industries. In addition, the company has a strong nationwide distribution network that guarantees product availability.
Further bolstering investor confidence is Vibhor Steel’s proven track record of financial performance.

The company’s primary strength stems from its affiliation with Jindal Pipes, which has a long-standing partnership with Jindal under the Jindal Star brand. Capacity expansion provides long-term visibility in terms of long term along with this reasoning. Prashanth Tapse of Mehta Equities stated that Vibhor is able to concentrate more on export business in the future due to its strategically placed plants close to ports.

Tapse stated that its valuation after listing would be comparable to that of its listed competitors. Against the issue price of ₹151, the analyst suggested that allocated investors book partial profits at approximately ₹425-450.

The unlisted market was seeing a premium of ₹140 for the company’s shares prior to the debut, meaning there would be a listing gain of more than 90%.

Due to tremendous interest from all categories, the IPO received an incredible response, with 320 times the amount of shares being oversubscribed. The issue was most frequently subscribed to (772 times) for the non-institutional buyers’ portion, 201 times for retail investors, and 191 times for the QIB portion.
Analysts predicted that the shares would list between ₹280 and ₹291 at a premium of 86–92% over the ₹151 issue price.

The IPO saw a robust 320-fold oversubscription, and according to research analyst Dhruv Mudaraddi of StoxBox, “we expect the stock to list at a premium of about 86% to the issue price.”
With a remarkable response to the IPO, the GMP has been rising steadily and is now trading at an astounding ₹140 above the ₹151 issue price. Head of Wealth at Swastika Investment Ltd. Shivani Nyati stated, “This excitement paints a positive picture for Vibhor Steel Tubes’ first day on the exchanges.”

According to Nyati, Vibhor Steel is well-positioned for a successful market debut and possibly large listing gains because of its solid fundamentals, wide reach, and rising investor confidence.

Nyati stated that the high valuation may present long-term risks even with the strong listing. As a result, investors should sell their holdings at this listing; those who wish to hold should set their stop loss at about ₹380.

The proceeds from the new issue will be used for general corporate purposes and the company’s working capital needs.
The registrar for the IPO was Kfin Technologies, and the book-running lead manager was Khambatta Securities.

For the most recent fiscal year, Vibhor Steel has demonstrated consistent performance. As of March 31, 2022, the company’s net profit increased from ₹11.33 crore for the year that ended in March of FY22 to ₹21.06 crore. From ₹818 crore to ₹1,113 crore over the same period, the company’s operating revenue increased.
“Vibhor Steel Tubes’ time to go public is now, given their impressive turnover figures. According to Vibhor Kaushik, Managing Director of Vibhor Steel Tubes, “the turnover will only rise from this point on.”

Founded in 2003, Vibhor Steel became a public limited company in 2023. The company specializes in producing hollow steel pipes, cold rolled steel (CR) strips, and mild steel/carbon steel ERW Black and Galvanized Pipes.
It has been producing, exporting, and supplying steel pipes and tubes to India’s heavy engineering sectors for the past 20 years.

Since 2003, the company has maintained a long-term commercial relationship with Jindal Pipes and receives significant orders from the latter. As per the terms of the agreement, Jindal will fulfill orders for a minimum of one million metric tons annually.

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