VMS TMT Limited is engaged in manufacturing of Thermo Mechanically Treated Bars ('TMT Bars') at the manufacturing facility situated at Bhayla Village, Ahmedabad, Gujarat, India. They conduct the business predominantly in the State of Gujarat from where they derived 98.93%, 96.72%, 98.75% and 97.42% of the revenues from operations in the Q1 FY26, FY25, FY24 and FY23 respectively. In the Q1 FY26 and FY25, retail sales constituted 86.93% and 78.66%, respectively and institutional sales constituted 12.60% and 20.33%, respectively of the total revenue from operations. The revenue from operations also includes sale of scrap, binding wires and billets which constituted approximately 3.54%, 7.35%, 5.94%, 3.15% of the total revenue from operations in the Q1 FY26, FY25, FY24 and FY23 respectively. Company has a retail license agreement dated November 7, 2022, with Kamdhenu Limited which allows them to market the TMT Bars under the Kamdhenu Brand on mutually agreed terms within the State of Gujarat (except Saurashtra and Kutch district of Gujarat) on a non-exclusive basis. They sell the TMT Bars to customers through distribution network, on a non-exclusive basis, which comprise of 3 distributors and 227 dealers as of July 31, 2025. Presently, company is manufacturing TMT Bars from scrap and billets at the manufacturing facility. TMT Bars are manufactured through thirty - ton induction furnace from scrap in the continuous casting machine ('CCM') and rolling mill and also from billets through the reheating furnace and rolling mill. The total annual installed capacity of TMT Bars is 200,000 metric tonnes ('MT') per annum and the production of TMT Bars in the Q1 FY26, FY25, FY24 and FY23 was 35,741 MT, 1,26,065 MT, 1,60,321 MT and 1,61,807 MT, respectively. In September 2024, the Company has completed the backward integration of its CCM division which have enabled them to manufacture TMT Bars from scrap, reducing the dependency on billets from suppliers. Presently, the basic raw materials is scrap, manganese, non-coking coal dolomite, limestone and bentonite, which they source both domestically and from other countries such as Hongkong, UAE, Kuwait, Australia, Singapore among other countries. Currently, apart from scrap, the major cost of production involves power expenses. To reduce our electricity expenses, they have initiated the process of setting up of a 15 MW solar power plant in Gujarat for the captive consumption. In this regard, the Company has entered into a MOU dated August 22, 2024 and addendum to the MOU dated September 10, 2025 with Prozeal GreenEnergy Limited ('Prozeal'). With the installation of the electric furnace, they are manufacturing TMT Bars from scrap, eliminating the re-heating furnace majorly which will allow them to reduce the cost of production significantly and eliminate the dependency on coal. As per financial performance, VMS TMT Limited has posted total income / net profits of Rs 882.05 Cr / 4.19 Cr (FY23), Rs 873.17 Cr / Rs 13.47 Cr (FY24), Rs 771.41 Cr / 15.42 Cr (FY25) and Rs 213.39 Cr / 8.57 Cr (Q1 FY26). So as per previous financials data, company has shown decline in sales, but net-profit increased. Company has an average EPS of Rs 3.71 and average RoNW of 21.99% for last three fiscals. Issue is priced at a P/BV of 4.19 as per NAV of Rs 23.61/- as on 31.03.25. If we attribute latest earnings of FY24, FY25 and annualised FY26 on equity post issue, then asking price is at a P/E of around 36.48, 31.87 and 14.32 respectively. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Arihant Capital Markets Limited is associated with this IPO, and have handled 4 IPOs (Mainboard & SMEs) in last three fiscal years. ( As on 12.09.25 ) As per financials, VMS TMT Limited has shown decline in sales growth, RoNW is 20.14% and P/E is 36.48, 31.87 and 14.32 respectively as per FY24, FY25 and annualised FY26 earnings. So issue looks fully priced. Company is engaged in manufacturing of Thermo Mechanically Treated Bars ('TMT Bars'), which is highly competitive & growing business segment. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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