Bombay Coated & Special Steels IPO opens: Anand Rathi bullish; here's why

Bombay Coated & Special Steels Ltd’s initial public offering (IPO) opened for subscription on Thursday, October 29, receiving a strong response in the first few hours of bidding. The issue was subscribed 0.86 times overall as of 11:39 AM. The qualified institutional buyers, excluding anchor investors, subscribed 1.41 times their allotted portion, while the retail portion was subscribed 0.38 times and the non-institutional investor segment 0.16 times.

 

The ₹183.06-crore IPO is entirely a fresh issue of 2.23 crore shares. The public issue will remain open for subscription until November 2, with the allotment expected to be finalised on November 3. The shares are tentatively scheduled to list on the NSE and BSE on November 5.

 

The company has fixed the price band at ₹78–₹82 per share, with a lot size of 182 shares. At the upper end of the price band, retail investors need to invest a minimum of ₹14,924 to apply for one lot. Smart Horizon Capital Advisors Pvt. Ltd. is the book-running lead manager, while KFin Technologies Ltd. is the registrar to the issue.

 

Anand Rathi recommends subscribing for the long term

 

Brokerage firm Anand Rathi has assigned a “Subscribe – Long Term” rating to the IPO, citing the company’s growth trajectory, established customer relationships and favourable industry prospects.

 

According to the brokerage, Bombay Coated & Special Steels is among India’s leading steel processing centres, providing value-added processing solutions to original equipment manufacturers (OEMs) and original design manufacturers (ODMs) across the home and commercial appliances and general engineering sectors.

 

The company’s revenue increased from ₹755.3 crore in FY24 to ₹1,266.8 crore in FY26, supported by capacity expansion, strategic manufacturing locations and its long-standing authorised partnership with JSW Steel Coated Products Ltd. The brokerage also highlighted rising steel consumption, growing demand for consumer durables and automotive components, and the increasing outsourcing of steel processing activities as potential growth drivers.

 

India’s steel processing industry is expected to benefit from higher infrastructure spending, manufacturing expansion, just-in-time supply chains and rising demand from the appliances, heating, ventilation and air-conditioning (HVAC), and automotive sectors.

 

IPO valuation and peer comparison

 

At the upper price band of ₹82 per share, Bombay Coated & Special Steels is valued at 16.9 times its FY26 price-to-earnings (P/E) ratio and 9.8 times its FY26 enterprise value to EBITDA (EV/EBITDA), with a post-issue market capitalisation of approximately ₹515.2 crore.

 

Anand Rathi noted that the valuation appears reasonable compared with selected listed peers, including BMW Industries, Manaksia Coated Metals & Industries and Shiv Aum Steels, which trade at P/E multiples of 15 times, 31 times and 98.5 times, respectively, according to the brokerage’s assessment.

 

The brokerage also cited the company’s return on net worth of 25.1 per cent, along with its scale, growth prospects and expanding processing capacity, in support of its long-term subscription recommendation.  Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.