Is Sambhv Steel Tubes IPO Good or Bad – Detailed Review

Is Sambhv Steel Tubes IPO Good or Bad – Detailed Review

by Santhosh S
Last Updated: 24 June, 202512 min read
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Is Sambhv Steel Tubes IPO Good or Bad – Detailed Review
Is Sambhv Steel Tubes IPO Good or Bad – Detailed Review
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Is Sambhv Steel Tubes IPO Good or Bad

Sambhv Steel Tubes Limited’s IPO is kicking off its initial public offering, which will be open from June 25, 2025, to June 27, 2025. While considering applying for this IPO, certain questions may arise in your mind, including whether the Sambhv Steel Tubes IPO is good or bad, whether it is worth investing in this IPO, and so on. 

This article offers a comprehensive Sambhv Steel Tubes IPO review, covering its business operations and fundamental analysis to help you make an informed investment choice.

Sambhv Steel Tubes IPO Review

Sambhv Steel Tubes Limited’s IPO offers a significant opportunity in India’s growing steel pipe and tube manufacturing industry. The company, headquartered in Raipur, Chhattisgarh, specialises in electric resistance welded (ERW) steel pipes and structural tubes, holding a 2% market share in the domestic ERW market. With a fully integrated production model and a 1.7 million MTPA capacity, Sambhv serves sectors such as infrastructure, water supply, and agriculture. In FY24, the company reported Rs 1,285.76 crore in revenue, reflecting strong growth and profitability despite a decline in its RoE and RoCE.

Sambhv’s expansion strategy includes strengthening backward integration and enhancing capacity to meet rising demand, particularly in government-backed initiatives like the Jal Jeevan Mission and Smart Cities Mission. The company’s diversified product portfolio and robust distribution network further position it for long-term growth.

However, investors should be mindful of risks, including high dependence on the ERW pipe segment, volatility in raw material prices, and working capital intensiveness. The company also carries a high debt burden, with a debt-to-equity ratio of 1.30 as of December 2024. Investors should carefully assess the strengths and risks before making decisions regarding the IPO.

Company Overview of Sambhv Steel Tubes IPO

Sambhv Steel Tubes Limited is one of India's key manufacturers of electric resistance welded (ERW) steel pipes and structural tubes. Headquartered in Raipur, Chhattisgarh, the company has positioned itself as a leading player in the ERW segment with an installed production capacity marking approximately a 2% share in the domestic ERW market as of FY24, as per the CRISIL Report. Sambhv is one of only two Indian manufacturers producing ERW pipes and tubes (including hollow sections) using narrow-width HR coils.

The company serves sectors such as infrastructure, water supply, construction, agriculture, and industrial manufacturing. Its product portfolio includes sponge iron, billets, HR coils, ERW pipes, GI pipes, stainless steel coils, and GP pipes. Sambhv operates a fully integrated value chain and leverages captive power, streamlined logistics, and in-house engineering capabilities to support efficient production.

As of March 31, 2025, they have 2 manufacturing facilities with a total installed capacity of 16,98,000 MTPA, and they have a captive power plant of 25 MW (16 MW of waste heat recovery boiler and 9 MW of atmospheric fluidised bed combustion system). They have dedicated a 132 kVA power transmission line as well. The company is led by an experienced promoter group; Sambhv continues to expand its footprint across India through strategic investments in capacity and quality enhancement.

Industry Overview of Sambhv Steel Tubes IPO 

The global steel pipes and tubes industry plays a critical role in sectors like construction, infrastructure, oil and gas, water transportation, and manufacturing. India witnessed 7.2% growth in output compared to global sector growth of 1.4% in the calendar year (CY) 2018 to 2022. In the global finished steel production is expected to increase from 1,805 MT in CY23 to 2,050-2,100 MT in CY28. Globally, demand is driven by urbanisation, infrastructure upgrades, energy investments, and industrial expansion. Technological advancements in steel processing and the rising adoption of ERW and precision tubes over traditional seamless pipes are reshaping product preferences globally. 

In India, the steel pipes and tubes industry has witnessed steady growth, supported by increasing investments in infrastructure, water supply systems, and oil and gas distribution. According to the CRISIL Report, domestic demand is expected to rise from 12.5 to 13.5 MTPA in FY25, at a CAGR of 8% to 9% (higher base), to 18.5 to 20.5 MTPA by FY29. This growth is largely fueled by government initiatives such as Jal Jeevan Mission, Smart Cities Mission, and urban housing schemes, along with expansion in oil and gas pipelines and irrigation projects.

ERW pipes, in particular, are seeing rising demand due to cost-efficiency and suitability for non-critical applications. The Indian market outlook remains robust, underpinned by strong policy support and rising industrial and urban infrastructure needs.

Financial Overview of Sambhv Steel Tubes IPO

Particulars

Dec 31, 2024 (9M)

March 31, 2024

March 31, 2023

March 31, 2022

Revenue from operations (Rs Cr)

1,016.09

1,285.76

937.22

819.35

EBITDA (Rs Cr)

106.37

159.87

117.3

124.52

EBITDA Margin (%)

10.47%

12.43%

12.52%

15.20%

PAT (Rs Cr)

40.69

82.44

60.38

72.11

PAT Margin (%)

4.00%

6.41%

6.44%

8.80%

RoE (%)

8.88%*

25.42%

33.57%

63.65%

RoCE (%)

7.67%*

17.66%

20.20%

28.90%

* not annualized

The above financials from FY22 to FY24 are on a standalone basis, and the 9M period till December 31, 2024, is on a consolidated basis. 

The financial performance of Sambhv Steel Tubes over the three fiscal years ending March 31, 2022, 2023, and 2024 exhibits steady growth and improving profitability, underscoring strong operational execution and scale expansion. Revenue from operations increased from Rs 819.35 crore in FY22 to Rs 937.22 crore in FY23 and reached Rs 1,285.76 crore in FY24. This growth reflects consistent demand across sectors and improved production capacity across its ERW pipes and structural tubes portfolio.

Profitability improved, with EBITDA declining from Rs 124.52 crore in FY22 to Rs 117.30 crore in FY23 and rising to Rs 159.87 crore in FY24. The EBITDA margin declined from 15.20% in FY22 to 12.52% in FY23 and 12.43% in FY24, indicating effective cost management and stable product pricing.

Profit After Tax (PAT) declined from Rs 72.11 crore in FY22 to Rs 60.38 crore in FY23, and further it rose to Rs 82.44 crore in FY24. PAT margins were 8.80%, 6.44%, and 6.41% for FY22, FY23, and FY24, respectively, following the operational efficiency trend.

In terms of return metrics, Return on Equity (RoE) stood at 63.65% in FY22, moderated to 33.57% in FY23, and declined to 25.42% in FY24. Return on Capital Employed (RoCE) followed a similar trend, moving from 28.90% in FY22 to 20.20% in FY23 and 17.66% in FY24. These metrics reflect a high capital requirement for the business, and the bonus issue in FY24 diluted the returns. The debt-to-equity ratio as of December 31, 2024, stood at 1.30, the ratio rose from 0.80 in 2024 as they took on more debt.

For the nine-month period ended December 31, 2024, Sambhv Steel Tubes reported revenue from operations of Rs 1,016.09 crore, EBITDA of Rs 106.37 crore with a margin of 10.47%, and net profit of Rs 40.69 crore, translating to a PAT margin of 4.00%. The company also recorded a RoE of 8.88% and RoCE of 7.67% (not annualised). With full-year FY25 results, the analysis can be done by comparing them with previous years. On the look, the profitability margins and return ratios have dipped.

Strengths and Risks of Sambhv Steel Tubes IPO

Let’s dive into the strengths and weaknesses to assess if the Sambhv Steel Tubes IPO is good or bad for investors.

Strengths 

  • Diverse Product Portfolio Across Core Steel Segments: Sambhv Steel Tubes offers a wide range of steel products, including ERW pipes, GI pipes, GP pipes, HR coils, sponge iron, billets, and stainless steel coils. This diversified portfolio enables the company to cater to multiple sectors, such as construction, water supply, infrastructure, and industrial manufacturing, which improves revenue stability and reduces dependence on any single product segment.

  • Integrated Manufacturing Model with Cost Advantages: The company operates an integrated value chain from raw materials (like sponge iron and billets) to finished products (pipes and coils), supported by in-house power generation and logistics. This model helps control input costs, ensures product quality, and provides flexibility in managing demand fluctuations and supply chain disruptions.

  • Strong and Growing Market Position in ERW Pipes: As of March 2024, Sambhv is one of India’s key players in ERW pipe manufacturing, with a market share of approximately 2% by sales volume. It is also one of only two manufacturers in India producing ERW pipes using narrow-width HR coils, giving it a distinct competitive edge in a high-growth infrastructure segment.

  • Pan-India Sales Presence with Established Distribution: The company sells its products across 15 states and one union territory with a 43-distributor network, which in turn distributes to a network of over 700 dealers as of December 31, 2025. This wide market reach supports volume scalability, customer access, and brand recognition while reducing geographic concentration risk.

  • Capacity Expansion Backed by Internal Engineering Expertise: The company leverages in-house engineering capabilities to expand manufacturing and implement process improvements. This reduces dependence on third-party EPC contractors and enables faster project execution with cost optimisation, supporting future capacity-driven growth.

Risks

  • High Dependence on ERW Pipes Segment: A significant portion of the company's revenue is derived from the sale of ERW pipes and tubes. Any slowdown in demand from end-use sectors such as infrastructure, water supply, or real estate could impact revenue. Lack of diversification beyond the steel pipe value chain exposes the company to concentrated segment risk.

  • Volatility in Raw Material Prices: The company’s operations are open to fluctuations in the prices of key raw materials such as hot rolled coils, sponge iron, and billets. While some procurement is in-house, market-driven input price volatility can impact gross margins if not passed on to customers in time.

  • Working Capital Intensive Business: The nature of operations requires significant investment in inventory and receivables. As of December 31, 2024, working capital days stood at 58. Delays in customer payments or increased inventory holding can strain cash flows and increase financing costs.

  • High Debt Levels and Leverage: The company had total borrowings of Rs 619.15 crore as of December 31, 2024, with a Debt to Equity ratio of 1.30 and Debt to EBITDA of 5.84. High leverage increases interest burden and limits financial flexibility, especially during downturns or rising interest rate environments.

  • Geographical Concentration of Manufacturing Facilities: Most of Sambhv’s manufacturing facilities are located in Chhattisgarh. Any natural disaster, political unrest, or regulatory change in this region could disrupt production and affect overall operations due to a lack of geographical diversification.

Strategies of Sambhv Steel Tubes IPO

  • Capacity Expansion to Meet Growing Demand: Sambhv Steel Tubes plans to improve its installed production capacity across existing and new product lines to meet rising demand for ERW pipes, GI pipes, and structural steel products. This will help capture market share in fast-growing infrastructure and water transportation sectors, particularly under government schemes like Jal Jeevan Mission.

  • Backward Integration for Cost Efficiency: The company aims to strengthen backward integration by investing further in upstream facilities. This strategy is intended to reduce reliance on third-party suppliers, improve input cost stability, and ensure better quality control across the value chain.

  • Product Diversification within Steel Value Chain: To mitigate segment concentration risk, Sambhv is focused on expanding its product mix to include higher-value items such as stainless steel coils and galvanised pipes. This will allow it to enter new end-user markets, including oil and gas, process industries, and construction finishing segments.

  • Strengthening Dealer and Distribution Network: The company intends to expand its network across India to deepen market reach, improve brand visibility, and improve penetration into semi-urban and rural infrastructure markets where demand for steel pipes is rising.

  • Leverage In-House Engineering for Timely Project Execution: Sambhv plans to continue leveraging its in-house engineering and project execution teams to implement expansions and process automation projects efficiently. This reduces execution risk, ensures customisation in production lines, and supports faster time-to-market for new capacities.

Sambhv Steel Tubes IPO Vs Peers

Source: RHP of the company

Sambhv Steel Tubes Limited positions itself competitively among leading players in India’s steel pipes and tubes segment. As of FY24, it holds an approximate 2% market share in the domestic ERW (electric resistance welded) pipe segment by sales volume. 

Source: RHP of the company

The company differentiates itself by being one of only two Indian manufacturers using narrow-width hot rolled coils to produce ERW pipes and structural tubes, which is a key advantage in meeting precise industry specifications. Compared to larger listed peers such as APL Apollo Tubes, Hi-Tech Pipes, and Surya Roshni, Sambhv is relatively smaller in revenue scale but operates a fully integrated manufacturing model. This integration from sponge iron and billets to finished pipes gives it cost efficiencies that not all peers possess.

Source: RHP of the company

Its EBITDA and PAT margins for FY24 stand at 12.43% and 6.41%, respectively, comparable to industry standards, while its nine-month FY25 margins reflect decent operating fundamentals. Additionally, its RoE of 25.42% in FY24 signals decent capital efficiency, despite the bonus issue during the year. The debt-to-equity ratio is in the higher range compared to its peers.

With expanding capacity, a pan-India dealer network of over 350 partners, and product diversification underway, Sambhv is strategically aligned to strengthen its competitive position. It leverages operational integration, engineering expertise, and growing demand in infrastructure and water sectors to bridge the gap with more established peers.

Objectives of Sambhv Steel Tubes IPO 

The issue by the IPO will be used by the company for the following purposes:

  • Repayment or prepayment of outstanding borrowings availed by the company worth Rs 390 crore.

  • General corporate purposes.

Sambhv Steel Tubes IPO Details

IPO Dates

Sambhv Steel Tubes IPO will be open for subscription from June 25, 2025, to June 27, 2025. The allotment of shares to investors will take place on June 30, 2025, and the company is expected to be listed on the NSE and BSE on July 2, 2025.

IPO Issue Price

Sambhv Steel Tubes is offering its shares in the price band of Rs 77 to Rs 82 per share. This means you would require an investment of Rs. 14,924 per lot (182 shares) if you are bidding for the IPO at the upper price band.

IPO Size

Sambhv Steel Tubes is issuing a total of 6,58,53,657 shares, which are worth Rs 540 crores. Out of the total issue, 1,21,95,121 shares worth Rs 100 crores are offer for sale, and the remaining 5,36,58,536 shares worth Rs 440 crores are fresh issue.

IPO Allotment Status

Investors who applied for the IPO can check their IPO allotment status on June 30, 2025, through the registrar's website: KFin Technologies Limited, BSE, NSE, or through the stockbroker platform.

IPO Listing Date

The shares of Sambhv Steel Tubes will be listed on the NSE and BSE on July 2, 2025.

IPO Application Link

Open demat account with Rupeezy today and enjoy a seamless experience when applying for the IPO. With an easy-to-use platform, Rupeezy makes the IPO application process quick and hassle-free.

Apply for Sambhv Steel Tubes IPO

Important IPO Details

Bidding Date

June 25, 2025 to June 27, 2025

Allotment Date

June 30, 2025

Listing Date

July 2, 2025

Issue Price

Rs 77 to Rs 82 per share

Lot Size

182 Shares

Disclaimer

The content on this blog is for educational purposes only and should not be considered investment advice. While we strive for accuracy, some information may contain errors or delays in updates.

Mentions of stocks or investment products are solely for informational purposes and do not constitute recommendations. Investors should conduct their own research before making any decisions.

Investing in financial markets are subject to market risks, and past performance does not guarantee future results. It is advisable to consult a qualified financial professional, review official documents, and verify information independently before making investment decisions.

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