Sambhav Steel Pipes Eyeing Capacity Expansion After Listing
Managing Director Vikas Goyal was upbeat about raising Rs 440 crore through the IPO as it will ensure the firm is virtually debt-free.
Sambhav Steel Pipes & Tubes Ltd. has made a strong debut on the stock exchange, listing at a 34% premium after its IPO was oversubscribed an impressive 21 times. Proceeds from the offering will primarily be used to significantly reduce the company's debt pile.
Vikas Goyal, managing director and chief executive officer of Sambhav Steel, told NDTV Profit on Wednesday that out of the Rs 440 crore raised, Rs 390 crore will be allocated for debt repayment with the remaining Rs 50 crore going into the general corpus fund.
"We are virtually debt-free, and that will be the outcome of the IPO," stated Goyal, enthusiastic about listing on the NSE platform. He anticipates a rise in the company's profit after tax in the second quarter due to lower interest costs and increasing utilisation of their installed facilities.
Currently, Sambhav Steel has the capacity of 3,50,000 tonnes of steel pipe, 50,000 tonnes of stainless steel, and 1,00,000 tonnes of galvanised coils and pipes. Galvanisation, which was recently added in November last year, is seeing improved utilisation this year.
Goyal noted that the company has utilised 70% of its capacity in the past three-year track record and expects a boost with new products and planned ramp-ups. Suresh Goyal, chairman and executive director, also elaborated on capacity expansion, stating that they were installing a third unit with a capacity of 1.2 million tonnes, to be implemented in three phases.
Suresh also highlighted the significant role stainless steel is expected to play, as the management is betting that income from this segment will increase to 50% after new capacity installations.
