IPO Note : Sambhv Steel Tubes Ltd by Motilal Oswal Financial Services Ltd
Business Highlights
* According to the CRISIL Report, Sambhv Steel Tubes is one of the key manufacturers of electric resistance welded (“ERW”) steel pipes and structural tubes (hollow section) in India in terms of installed capacity as of March 31, 2024.
* Their backward integration processes allow them to manufacture a range of finished products including ERW black pipes and tubes (hollow section), pregalvanized (GP) pipes, Cold Rolled Full Hard (“CRFH”) Pipes and galvanized iron (“GI”) pipes and steel door frames, using intermediate products such as sponge iron, blooms/slabs and hot rolled (“HR”) coil, cold rolled (“CR”) coil (mild steel) and GP coils which are manufactured in-house.
* They are one of the two players in India manufacturing ERW steel pipes and tubes (along with hollow section pipes and tubes) using narrow-width HR coil, as of December 31, 2024. (CRISIL Report)
* They are also amongst a very limited number of players in India, manufacturing stainless steel coils with backward integration and currently have the capability of manufacturing stainless steel (“SS”) blooms/slabs which are captively consumed to produce HR coil, hot rolled annealed pickled (“SS HRAP”) coil and CR coil. (CRISIL Report)
* According to the CRISIL Report, their integrated manufacturing facility is designed to respond swiftly to market demand for a particular size of pipe or tube as they control the end-to-end supply chain for their products unlike other industry players who rely on external coil manufacturers for supply of the required grade and size of HR coils.
* They have also, in Fiscal 2025, expanded the installed capacity of their captive power plant from 15 MW as of March 31, 2024 to 25 MW as of March 31, 2025. With this expansion, they expect that the captive power plant will be able to meet up to 56.40% of the total power requirement for their Sarora (Tilda) Facility, compared to up to 43.70% in Fiscal 2024, resulting in increased cost savings. This underscores their focus on sustainable captive power generation maximising energy efficiency and reducing environmental impact. They also have a dedicated 132 KvA power transmission line.
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