Sambhv Steel Tubes IPO

Incorporated in 2017, Sambhv Steel Tubes Limited is a prominent Indian manufacturer of electric resistance welded (ERW) steel pipes and structural tubes (hollow sections). The company operates a fully backward integrated, single-location manufacturing facility in Sarora (Tilda), Raipur, Chhattisgarh, strategically located near abundant mineral resources. Sambhv sources iron ore from a “Navratna” PSU and coal from a “Maharatna” PSU’s subsidiary that operates Asia’s largest coal mines, situated just 250 km from its plant. With in-house production of intermediate materials like sponge iron, blooms/slabs, and narrow-width hot rolled (HR) coils, Sambhv is uniquely positioned as the only company in India with such integrated capabilities for ERW steel pipe and tube production.

As of March 31, 2024, Sambhv Steel Tubes has a strong nationwide presence through 33 distributors and 6 additional branches managed by two key partners, covering 15 states and one union territory. The company’s products—ERW black pipes, hollow sections, and galvanized iron (GI) pipes—are rust-resistant and tailored to diverse industries including infrastructure, agriculture, oil and gas, engineering, telecommunications, and solar energy. With a 23-member sales and marketing team, Sambhv continues to expand its footprint and is recognized among the top players in India by installed capacity in the ERW steel pipes segment.

Sambhv Steel Tubes IPO Strengths

• Sambhv Steel Tubes is the only company in India with a single-location, backward-integrated facility for ERW steel pipes and tubes, covering the entire value chain from raw materials to finished products, ensuring quality and cost control.
• The company is among the leading manufacturers in India in terms of installed capacity for ERW steel pipes and structural tubes, highlighting its strong presence in the domestic market.
• The company produces a wide range of products, including mild steel coils, steel door frames, stainless steel coils, galvanized pipes, and structural tubes, catering to various industry needs.
• Located in Raipur, Chhattisgarh—a state rich in mineral resources—the company benefits from proximity to raw materials and is centrally positioned for efficient distribution across India.
• Sambhv Steel Tubes supplies to over 35 distributors and 600+ dealers nationwide, ensuring wide market reach and robust sales channels.
• The company is dedicated to environmental responsibility, with advanced pollution control measures, effluent treatment, and extensive tree plantation initiatives.
• Consistent capacity utilization and expansion of production facilities have supported sustained improvements in operational performance.

Sambhv Steel Tubes IPO Risks

• The business is highly sensitive to fluctuations in the prices of raw materials such as iron ore and coal. Volatile input costs can squeeze margins and reduce profitability.
• Although the company has a large installed capacity, certain segments like GI pipes operate at low utilization rates, which can negatively impact profitability and operational efficiency.
• Demand for steel products is cyclical and subject to economic downturns, changes in construction activity, and infrastructure spending, which can affect revenues and profits.
• The steel tubes and pipes sector is highly competitive, with both domestic and international players putting pressure on prices, market share, and profitability.
• The industry is subject to stringent environmental, safety, and labor regulations. Non-compliance or changes in regulations could increase costs or disrupt operations.
• Failure to maintain high product quality standards could result in liability claims, reputational damage, and loss of customer trust.