India’s iron and steel sector is thriving, with the market projected to reach 148.28 million tons in 2025. Steel demand is expected to grow by 8-9% in 2025, driven by infrastructure and construction projects. India is the world’s second-largest steel producer, with a crude steel capacity of 180 million tons in 2024.
Price movement
With a market capitalization of Rs 243.86 crore, the shares of Vibhor Steel Tubes Ltd were trading at Rs 128.60 per share, decreasing around 8 percent as compared to the previous closing price of Rs 132.25 apiece.
Matter Explanation
Vibhor Steel Tubes Ltd dropping below its Rs 151 IPO price. It debuted last year with a Rs 72 crore IPO, which saw a massive 320x subscription. The retail portion alone was subscribed 201 times. The high subscription was partly due to the small IPO size, which inflated demand figures.
The company hit its 52-week or all-time high in April 2024 at Rs.332.90 apiece and, comparing the same with the current stock price prevailing in the market, there is a discount of approximately 61 percent.
New Developments
The company’s new Jharsuguda plant has all machinery installed and is in trial runs, while its hot-dip galvanizing tank awaits government approval and electricity. Meanwhile, the Hyderabad factory has begun producing square pipes and hollow sections, expanding beyond round pipes.
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Product Performance
The company’s new products are performing well, with over 2,000 tons of Highway Guard Rail orders booked. Strong inquiries for transmission line structures indicate rising demand. Additionally, a new product line for octagonal poles and monopoles is set to launch soon, further expanding the portfolio and strengthening market presence.
Market Insight
Steel demand has rebounded post-Diwali, with tonnage deficits narrowing from Q2 levels. Management expects government support, including potential safeguard duties, which could benefit operations. This recovery signals a positive outlook for the industry, driven by policy measures and improving market conditions.
Debt Management
The company’s current debt stands at Rs 260-270 crores, with repayment strategies aligned to market conditions and production needs. Interest rates on working capital are around 9.5 percent, while overall interest costs have declined since the IPO. The company remains focused on effective debt management to optimize financial performance.
Future Prospects
The management expects significant sales growth from the Jharsuguda plant, anticipating a substantial turnover like past expansions. The company aims to leverage its strong dealer network in Raipur, Bhubaneswar, and West Bengal to drive growth, ensuring broader market reach and increased revenue potential.
Company Profile
Vibhor Steel Tubes Limited manufactures and exports steel pipes and tubes, including Mild Steel/Carbon Steel ERW Black and Galvanized Pipes, Hallow Steel Pipe, Cold rolled Steel (CR) Strips/ Coils. The company was established in 2003, and it primarily caters to the heavy engineering sector in India.
Written by Abhishek Singh
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