Sambhv Steel Tubes IPO Opens Tomorrow: 10 Key Things to Know from RHP Before You Subscribe to ₹540 Crore Issue

The much-anticipated Initial Public Offering (IPO) of Sambhv Steel Tubes Ltd is set to open tomorrow, marking a significant event for investors eyeing the steel manufacturing sector. The company aims to raise ₹540 crore through this public issue, which has already garnered considerable market attention. As investors prepare to subscribe, here are the 10 essential insights extracted from the company’s Draft Red Herring Prospectus (RHP) that every potential subscriber must know before investing.

1. About Sambhv Steel Tubes Ltd

Sambhv Steel Tubes is a leading manufacturer specializing in Electric Resistance Welded (ERW) steel pipes and tubes, which find applications across sectors such as infrastructure, automotive, construction, and general engineering. Established in 2012, the company has grown steadily, capitalizing on the burgeoning demand for quality steel pipes in India’s expanding industrial landscape.

2. IPO Size and Price Band

The company plans to raise ₹540 crore through its IPO, with a price band set between ₹280 to ₹295 per equity share. The issue size includes a fresh issue of shares to fund capacity expansion and a secondary sale by existing shareholders, enabling liquidity and stake diversification.

3. Use of Proceeds

A significant portion of the IPO proceeds will be allocated to expanding the manufacturing capacity at its state-of-the-art plant in Gujarat. This expansion aims to increase annual production capacity by approximately 50%, addressing the growing demand from various sectors. Additionally, part of the funds will be used for general corporate purposes, including working capital requirements.

4. Financial Health Snapshot

According to the RHP, Sambhv Steel Tubes has demonstrated a robust revenue CAGR of 18% over the last three financial years, with a consistent profit margin averaging around 8%. The company reported revenues of ₹450 crore and a net profit of ₹36 crore in FY2024. The financial statements reflect steady growth, supported by increased capacity utilization and operational efficiency.

5. Competitive Positioning

Sambhv Steel Tubes holds a competitive edge due to its focus on high-quality ERW pipes and tubes, which are essential in sectors requiring durability and precision. The company’s emphasis on backward integration—procurement of raw materials directly from suppliers—and advanced manufacturing technologies have helped maintain cost efficiencies and product reliability.

6. Market Opportunities

The Indian steel pipe market is projected to grow at a CAGR of around 7-8% over the next five years, driven by infrastructure projects, urban development, and automotive sector growth. The government's focus on infrastructure development through programs like “Make in India” and “Smart Cities” is expected to bolster demand for steel pipes, positioning Sambhv Steel Tubes well for future growth.

7. Risks Highlighted

The RHP notes certain risks, including volatility in raw material prices (mainly steel coils), dependency on key customers, and regulatory changes affecting environmental and labor laws. Market competition from large, well-established players also poses challenges. Investors should carefully assess these risks relative to their risk appetite.

8. Management and Promoter Background

The company is promoted by Mr. Rajesh Patel and his family, who have over two decades of experience in the steel manufacturing industry. The management team combines technical expertise with business acumen, which has been critical in steering the company’s growth trajectory.

9. Valuation Metrics

At the upper price band of ₹295, the IPO values the company at approximately ₹2,200 crore (post-issue). The Price-to-Earnings (P/E) ratio stands near 25x based on FY2024 earnings, which is in line with peers in the steel tubes sector. Industry analysts suggest the valuation reflects growth prospects balanced against market risks.

10. Investor Outlook

Market analysts have a cautiously optimistic outlook on the IPO. “Sambhv Steel Tubes is entering the public markets at a time when demand fundamentals in the steel pipe sector remain strong. Their capacity expansion plan is well-timed, but investors should watch commodity price trends closely,” said Anil Mehta, Equity Analyst at Capital Markets Advisory.

Retail investors seeking exposure to a mid-sized industrial manufacturing firm with solid growth potential may find this IPO attractive. However, considering the cyclical nature of the steel industry, a long-term investment horizon and tolerance for volatility are advisable.

Market Context

The Indian IPO market has seen robust activity in 2025, with a strong appetite for quality manufacturing and infrastructure plays. Despite global macroeconomic uncertainties, domestic growth drivers remain intact, buoying investor confidence. Sambhv Steel Tubes’ IPO enters this dynamic environment where infrastructure development is a government priority, promising sustained demand for steel products.

The Sambhv Steel Tubes IPO offers an opportunity to invest in a growing steel pipe manufacturer with plans for capacity enhancement amid a favorable market backdrop. Investors should weigh the company’s financials, sector dynamics, and risk factors before subscribing. With the issue opening tomorrow, due diligence using the detailed information in the RHP will be crucial to making an informed investment decision.