Sambhv Steel Tubes files draft papers for Rs 540-crore IPO

Sambhv Steel Tubes IPO

Sambhv Steel Tubes, manufacturer of electric resistance welded steel pipes and structural tubes, has filed a draft prospectus with markets regulator Sebi to garner Rs 540 crore through an initial public offering (IPO).

The proposed IPO is a mix of fresh issue of equity shares valued Rs 440 crore and an offer-for-sale (OFS) of shares worth Rs 100 crore by promoters, draft papers filed on September 30 showed.

Those selling shares in the OFS are — Shashank Goyal, Rohit Goyal, Kaushlya Goyal, Harsheet Goyal and Rinku Goyal.

Proceeds from the fresh issue to the tune of Rs 390 crore will be utilised for payment of debt and general corporate purposes.

The company had a total borrowing of Rs 347 crore as of March 2024, the draft papers showed.

Also read: Kedaara Capital-backed Ajax Engineering files IPO papers

Sambhv Steel Tubes is one of the key manufacturers of electric resistance welded (ERW) steel pipes and structural tubes (hollow section) in India in terms of installed capacity as of March 31, 2024.

According to a Crisil report, the demand for domestic steel pipes and tubes is expected to grow at a compound annual growth rate (CAGR) of 5-6 percent during fiscals 2019-2025 to 12.50-13.50 million tonne per annum (MTPA). The growth is led by government initiatives to augment urban infrastructure and to infuse investments in the oil and gas sector.

Going forward, the domestic steel pipe demand is projected to increase to 18.50-20.50 MTPA in fiscal 2029 at 8-9 per cent CAGR, on a high base, it added.

Nuvama Wealth Management and Motilal Oswal Investment Advisors are the book-running lead managers to the issue.