M&B Engineering IPO: Should You Subscribe Or Avoid? 10 Key Things You Must Know — Anand Rathi Report

Ahmedabad-based pre-engineered buildings and self-supported steel roofing solution provider M&B Engineering IPO will open for subscription from July 30 to Aug. 1. The company has fixed the price band in the range of Rs 366 and Rs 385 per equity share.

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Anand Rathi Report

The M&B Engineering IPO will open for subscription from July 30 to Aug. 1. Ahmedabad-based pre-engineered buildings and self-supported steel roofing solution provider has fixed the price band in the range of Rs 366 and Rs 385 per equity share.

M&B Engineering IPO: 10 things to know

Before applying for M&B Engineering IPO, here are the 10 key things you must know

1. The M&B Engineering IPO will open for subscription from July 30 to Aug. 1.

2. Ahmedabad-based pre-engineered buildings and self-supported steel roofing solution provider has fixed the price band in the range of Rs 366 and Rs 385 per equity share. Investors can place bids starting from a minimum of 38 shares and in multiples thereafter.

3. The Rs 650 crore IPO comprises of a fresh issue of 71 lakh shares, worth Rs 275 crore, and an offer-for-sale of 97 lakh shares, worth Rs 375 crore.

4. The IPO Shares of M&B Engineering will be listed on the BSE and NSE on Aug. 6.

5. Equirus Capital Private Ltd., DAM Capital Advisors Ltd. are the book-running lead managers for the public issue.

6. Objects of the Issue: 

• Funding the capital expenditure requirements for the purchase of equipment and machinery, building works, solar rooftop grid and transport vehicles at their Manufacturing Facilities;

• Investment in information technology software upgradation;

• Re-payment or pre-payment of term loans, in full or in part, of certain borrowings availed by the Company; and

• General corporate purposes.

7. Strengths:

• One of the leading players in terms of installed capacity in the domestic PEB industry with presence in international markets.

• Company provide a wide range of specialised products and services, making them a comprehensive solution provider for their customers.

• Relationships with customers across a diverse set of industries with an order book of ₹8,428 million as of June 30, 2025.

• Strategically located manufacturing facilities for PEBs with comprehensive in-house design and engineering capabilities and 14 mobile manufacturing units for self-supported roofing systems.

8. Key Strategies

• Augment manufacturing facilities in their Phenix Division to better serve their customers by setting up a strategically located manufacturing facility.

• Increase revenue contribution of exports by focusing on USA and other key markets.

• Expand business through strategic alliances or inorganic opportunities.

9. Valuation:

Ahmedabad-based M&B Engineering is one of India’s leading players in the Pre-Engineered Buildings and self-supported steel roofing segment, this leadership enables competitive advantages such as cost efficiency through economies of scale and enhanced pricing power. M&B Engineering’s strength lies in its integrated operations, in-house design and engineering teams, widespread execution track record, and a diversified customer base across industrial and infrastructure sectors.

The company also benefits from long-standing relationships with marquee clients such as Adani Group, Tata Advanced Systems, Alembic Pharma which reinforces customer stickiness.

On the valuation front, based on annualized FY25 earnings, the company is seeking a P/E of 28.5 times, and a post-issue market capitalization of approximately Rs 22,000 million, making the issue appear fully priced at current levels.

The company’s revenues are likely to see healthy growth in FY26 as its Cheyyar facility (commenced in FY24) was operational for only five months in FY25.

While high dependence on raw material prices and a limited sector focus remain key risks, its leadership in PEBs, pan-India manufacturing footprint, and steady expansion into global markets (including USA) provide longterm growth visibility.

Hence, we recommend a “Subscribe for long-term” rating to the issue

10. Risk:

• Raw material cost constitutes a majority percentage of their total expenses. During Fiscal 2025, 82.69% of their raw materials were procured from their top five suppliers, calculated as a percentage of the total cost of materials consumed, including changes in inventories of finished goods, stock in trade, and work in progress. Any increase in the prices, availability, or quality of raw materials could adversely affect their reputation, business, and results from operations, financial condition, and cash flows. They rely on limited suppliers for their primary raw material, steel, and the loss of these suppliers may have an adverse effect on their business, results of operations, and financial condition.

• High dependency on manufacturing facilities: The company’s operations rely heavily on its manufacturing facilities, which involve risks due to the use of heavy machinery. There have been four fatal incidents at project sites in the past. Any disruption such as slowdown, shutdown, or labor strikes could negatively impact the business.

• Revenue concentration: The company generates most of its revenue from designing, manufacturing and installing pre-engineered buildings (77.4% in FY25). A decline in demand for these structures could adversely impact the business and financial performance of the company.

• Stringent performance and high-quality standard requirements: The company is held to high quality and performance standards by the customers. Any failure to meet these may result in order cancellations, penalties, or liability claims, potentially impacting the reputation, operations and financial health.

• Working capital intensive: The company’s operating cash flow declined from FY23 to FY24 because of high working capital requirement which was due to decrease in the trade payables. Decrease in trade payables was due to a shift in purchasing strategy of the company where the company increased import of raw materials from Rs 107.9 crore in FY23 to Rs 171.7 cr in FY24. If operational cash flow remains weak, the company may need to scale down the business and could face challenges in meeting financial obligations, impacting the overall stability and performance.

• Business is dependent on their design and engineering teams to accurately carry out the pre-approval engineering studies for potential orders. Inability of the design and engineering teams to accurately estimate the cost of the project and to execute an order would have an adverse impact on their business, results of operations, financial condition, and cash flows.

• Company is dependent on third-party contract labourers for several aspects relating to its manufacturing activities. Any disruption in the supply of contract labour or the inability to control the composition of contract labour could adversely affect the company’s business, results of operations, financial condition, and cash flows.

• The company’s Cheyyar Facility and certain of its offices are located on leased premises. There can be no assurance that these lease agreements will be renewed upon termination or that the company will be able to obtain other premises on lease on the same or similar commercial terms, which could adversely affect its business, results of operations, financial condition, and cash flows. Additionally, there exists a conflict of interest between members of the Promoter Group—Manibhai & Brothers, Manibhai & Brothers (PCC) Sarkhej, Manibhai & Brothers (Charitable Trust), and Avichal Projects LLP—and the lessors of the immovable properties.

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