Vibhor Steel Tubes IPO: financials and fundamentals

Vibhor Steel Tubes, a manufacturer of steel pipes and tubes as well as an exporter, is coming out with an initial public offering of ₹72.17 crore. Although the company is offering a small issue as compared with other recently listed IPOs, it has shown consistent growth in its revenue over the last 20 years. In this blog, we will dive into the fundamentals of the company to help you decide whether you should consider this IPO investment.

What is the offer from Vibhor Steel Tubes?

The Vibhor Steel Tubes IPO is issuing ₹72.17 crore as a fresh stock with the price band being ₹141 to ₹151 per share. This makes the minimum investment amount ₹14,949 with 99 shares per lot. 50% of the total issue is reserved for Qualified Institutional Bidders while retail investors get 35% of the issue followed by 15% for non-institutional investors. 

About Vibhor Steel Tubes

Vibhor Steel Tubes was established back in 2003 and caters to various heavy engineering industries in the country. The company manufactures and exports mild steel, carbon steel ERW black and galvanised pipes, hollow steel pipes, and cold rolled steel strips or coils. 

The revenue, with consistent growth, has reached ₹1,114.38 crore in FY23. This was a considerable increase from the ₹818.48 crore in FY22. The net profit of Vibhor Steel Tubes has also shown a positive trend, growing from ₹11.33 crore in FY22 to ₹21.07 crore in FY23.

What’s good for the company

• Focus on growing sectors like infrastructure and construction could fuel demand for steel pipes.
• Established clientele and a track record of financial growth might appeal to investors.
• Relatively smaller issue size could attract retail investors seeking diversification.

What investors should consider

• Steel industry faces volatility due to raw material price fluctuations and competition.
• Dependence on specific sectors could pose risks if market dynamics shift.
• Smaller track record compared to larger steel companies might deter some investors.

Conclusion

Vibhor Steel Tubes' IPO presents a blend of opportunities and risks. While the company's performance shows promise, the steel industry's inherent volatility and the company's relatively smaller size require careful consideration. Investors should thoroughly research the company's financials, industry trends, and competitive landscape before making any investment decisions. Remember, due diligence is always crucial, regardless of the IPO's size or potential appeal.