Ten things to consider before purchasing a share in the Rs 72 crore Vibhor Steel Tubes IPO

Ten things to consider before purchasing a share in the Rs 72 crore Vibhor Steel Tubes IPO

Vibhor Steel Tubes Initial Public Offering (IPO): The set price range for this entirely new issuance is Rs 141–151 per share.

Initial Public Offering (IPO) of Vibhor Steel Tubes: The subscription period for the IPO began on February 13 and ends on February 15, 2024.

On February 1, the first public offering (IPO) of Vibhor Steel Tubes, a wholly new issue, opened for subscription. The offering was for Rs 72 crore.3.

Prior to the IPO, the business collected Rs 22 crore from three anchor investors.

Prior to accepting the offer, be aware of the following 10 important points:

1) IPO dates

The IPO's subscription period began on February 13 and ends on February 15.

2) The Price Range

The set price range for the issuance is between Rs 141 and Rs 151 per share.

3) Specifics of the Proposal

This is an entirely new share offering. On February 12, the anchor book opened for business. Cent Capital Fund, Chhattisgarh Investments Ltd., and Neomile Growth Fund-Series I contributed Rs 22 crore to the company's fundraising efforts.

4) The issue's goal

The net profits will go toward the company's general operations and working capital needs.

5) Dimensions of the Lot

Investors may place bids for up to 99 shares at a time, and then in multiples of 99. The minimum investment required from a retail investor is Rs 13,959 (lot size x lowest price band of Rs 141). The bid amount would rise to Rs 14, 949 at the highest level.

6) Overview of the Company

Vibhor Steel Tubes is a producer and supplier of cold rolled steel strips/coils, hollow steel pipes, mild steel/carbon steel ERW black as well as galvanized pipes.

The firm and Jindal Pipes have a long-term contract that lasts six years. As per the terms of the agreement, Jindal will provide orders with a minimum amount of one hundred thousand metric tons annually to cover most of the company's Unit I and Unit II capacity.

The firm has a warehouse in Hisar, Haryana, and two production sites in Raigarh, Maharashtra, and Mahabubnagar, Telangana.

7) Monetary

From FY22 to FY23, the company's sales climbed by 36% to Rs 1,113.12 crore. Profit after tax rose to Rs 21 crore, an 86 percent rise, after the Covid-19 pandemic recovery.

For the six months that ended September 30, 2023, revenue was Rs 530.51 crore, PAT was Rs 8.52 crore, and EBITDA was Rs 23.69 crore. During the same period, the debt-to-equity ratio was 1.83 times, the PAT margin was 1.61 percent, the earnings-before-interest was 4.47 percent, the RoCE was 6.97 percent, as well as the RoE was 8.37 percent.

8) Supervisor of Issues

Khambatta Securities is the IPO's marketing manager, while Kfin Technologies is the registrar. Vijay Kaushik, Vibhor Kaushik, Vijay Lakshmi Kaushik, as well as Vijay Kaushik HUF are the company's promoters.

9) Peril

(i) Jindal Pipes Limited provides the firm with over 90% of its income. Order cancellation, delay, or curtailment by Jindal Pipes might have a significant negative impact on the company's operations, financial situation, and business.

(ii) The business has disclosed some cash flow issues resulting from its financing, investment, and operating operations.

(iii) A number of variables related to Maharashtra and Telangana affect business, which is mostly concentrated in these states.

(iv) The firm has the highest debt-to-equity ratio (1.63x) within its peer group as of FY23. There was Rs 126.82 crore in net debt.

10) Date of listing

The red herring prospectus said that the stock is expected to be listed on the NSE and BSE on February 20 and that the basis of allocation would be determined by February 16. Shares will be credited to the winning bidders' demat accounts by February 19.