Vibhor Steel Pipes IPO: The Rs 72.12 crore IPO is being offered in the price range of Rs 141-151. According to Rajan Shinde, Research Analyst at Mehta Equities, the company’s primary strength lies in its association with Jindal Pipes. He highlighted the enduring relationship with Jindal, operating under the esteemed brand of Jindal Star.
On the first day of bidding, the initial public offering (IPO) by Vibhor Steel Pipes Ltd was fully subscribed. By 11:55 am, the issue garnered 3,29,04,036 bids for 35,92,445 shares available. Estimates suggest that the issue attracted 1,57,000 applications amounting to around Rs 400 crore. The retail portion’s quota was oversubscribed by 14.02 times, while the portions reserved for Employees and Non-Institutional Investors (NIIs) were subscribed by 14.17 times and 11.39 times, respectively.
The Rs 72.12 crore IPO is being offered in the price range of Rs 141-151. According to Rajan Shinde, Research Analyst at Mehta Equities, the company’s primary strength lies in its association with Jindal Pipes. He highlighted the enduring relationship with Jindal, operating under the esteemed brand of Jindal Star. In addition to this rationale, the capacity expansion provides long-term visibility. Vibhor strategically locates its plants near ports, which will enable them to focus more on their export business in the future, the statement explained.
Shinde noted that with the annualized FY24 earnings and fully diluted post-IPO paid-up capital taken into account, the company is seeking a price-to-earnings (PE) ratio of 16.8 times. He remarked that this valuation appears quite reasonable, especially when considering the company’s impressive revenue and profit growth. Furthermore, he added that even in comparison to its peers, which are trading at much higher PE ratios ranging between 30 to 40 times, Vibhor Steel Pipes seems attractively priced.
Vibhor Steel Pipes IPO received 10 times subscriptions on the first day
ProfitMart Securities expressed optimism about VSTL for the long term, citing the vast growth potential of India’s Steel Tubes market over the next 3-5 years. They highlighted the diverse applications of steel tubes in infrastructure, oil & gas, housing, and metro projects. Additionally, the presence of a key customer like Jindal Pipes was seen as a positive factor, ensuring steady volumes and protecting margins. ProfitMart emphasized that contrary to common belief, having a major customer like Jindal Pipes is advantageous, strengthening the company’s position and facilitating future scaling of operations.
ProfitMart Securities explained their perspective, stating, “We believe that the outsourcing arrangement benefits both Jindal Pipes and VSTL. Timely sourcing of raw materials and order execution are critical factors. Furthermore, VSTL maintains its margins and receives committed volumes from Jindal Pipes, a brand well-established in the domestic market.”
