Sambhv Steel Secures Rs 161 Crore from Anchor Investors Ahead of Initial Public Offering

Sambhv Steel Tubes announced on Tuesday that it has raised Rs 161.25 crore from anchor investors. This comes just before the launch of its initial public offering (IPO) for public subscription. The anchor investors include WhiteOak Capital Mutual Fund, Motilal Oswal Mutual Fund, Nuvama Asset Management, Astorne Capital VCC Arven, Citigroup Global Markets Mauritius, Nomura Singapore, Societe Generale, and BNP Paribas Financial Markets.

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IPO Details and Allocation

According to a BSE circular, Sambhv Steel allocated over 1.96 crore equity shares to 19 entities at Rs 82 each. This price is at the top end of the IPO price range. The IPO, valued at Rs 540 crore, will be open for public subscription from June 25 to June 27. The price band for the issue is set between Rs 77 and Rs 82 per share.

Structure and Purpose of the IPO

The IPO consists of a fresh issue of equity shares worth Rs 440 crore and an offer for sale (OFS) by promoters amounting to Rs 100 crore. Funds raised from the fresh issue will be used to repay debt and for general corporate purposes. Sambhv Steel is a leading manufacturer of electric resistance welded (ERW) steel pipes and structural tubes in India as of March 31, 2024.

Market Outlook and Demand

A Crisil report indicates that domestic demand for steel pipes and tubes grew at a compound annual growth rate (CAGR) of 5-6% from FY19 to FY25, reaching 12.50-13.50 million tonnes per annum (MTPA). This growth was driven by government efforts to enhance urban infrastructure and investments in the oil and gas sector.

Looking ahead, the demand for domestic steel pipes is projected to rise to 18.50-20.50 MTPA by FY29, with an expected CAGR of 8-9% between FY25 and FY29. This increase is based on a high base level of demand.

Listing and Management

Nuvama Wealth Management and Motilal Oswal Investment Advisors are serving as the book-running lead managers for this issue. Sambhv Steel Tubes is set to list on both the BSE and NSE on July 2.

With inputs from PTI