 "Sensex, Nifty, stock brokers")
Vibhor Steel Tubes made a solid stock market debut on Tuesday as its shares got listed at Rs 425, a stellar 181 per cent premium over its issue price of Rs 151 per share on the National Stock Exchange (NSE). The stock of the iron & steel products later got locked in the 5 per cent upper circuit at Rs 446.25, zooming 196 per cent against its issue price.
On the BSE, the stock was locked at the upper circuit of Rs 442 after listing at Rs 421. Till 10:07 AM, a combined 1.7 million equity shares had changed hands and there were pending buy order for nearly 100,000 shares on the NSE and BSE, data shows. By comparison, the benchmark indices were down 0.13 per cent.
"Vibhor Steel Tubes defied even the most optimistic predictions, recording a phenomenal 182 per cent gain on its listing day, soaring to Rs 425 per share compared to its issue price of Rs 151. This unprecedented performance vastly exceeds the previously anticipated surge, fueled by the company's strong fundamentals and the overwhelming investor response. Despite the strong listing, the high valuation could pose potential risks in the long term. Thus, this listing is the right time for investors to exit their holdings. However, those who still want to hold are suggested to keep stoploss at around 380," said Shivani Nyati, Head of Wealth, Swastika Investmart.
Vibhor Steel Tubes IPO garnered a phenomenal response, receiving an oversubscription of 320 times. The retail category saw a subscription of 201.52 times, while the qualified institutional buyers (QIB) category was oversubscribed by 191.41 times, and the non-institutional investors (NII) category witnessed an oversubscription of 772.49 times.
The company boasts a diverse product portfolio catering to various sectors. It also possesses a well-established distribution network across India, ensuring product accessibility. Additionally, the company has a solid track record of financial performance, further cementing investor confidence, said Shivani Nyati, Head of Wealth, Swastika Investmart.
Vibhor Steel Tubes is a manufacturer and exporter of mild steel and carbon steel ERW (electric resistance welded) black and galvanized pipes, hallow steel pipe, and cold rolled steel (CR) strips and coils.
The company's products find application in the construction, domestic, agriculture and the industrial sectors. It operates out of two manufacturing facilities. The first is based at Sukheli, Maharashtra, with a production capacity of 125,000 tonnes per annum (tpa). The second is based out of Mehboob Nagar, Telangana, with a production capacity of 96,000 tpa. The company has installed 2-MW solar rooftop solar power units (1 MW each at both the units) for captive consumption.
The company manufactures & supplies the finished goods for 'Jindal Pipes Limited' (Jindal) vide the renewed agreement dated April 01, 2023, under the brand name 'Jindal Star'. The company has a long-term agreement for the six years with the Jindal. Under the agreement Jindal will provide orders with a minimum quantity of 100,000 MT per annum to fill majority capacity of Unit I & Unit II of the company.
Vibhor Steel Tubes, in its Red Herring Prospectus, said that it has a big opportunity as a manufactures of steel pipes & tubes products in the domestic market as well as in export market. There is huge demand in the market, so if the agreement will get disruptted, the company should not face any problem in maintaining their production volume.
The usage of steel tubes and pipes is significant in construction activities and building infrastructure. These materials are used in the construction sector for creating structural elements such as columns, beams, and trusses to provide strength and support the formation of building.
They are also used in water infrastructure such as drinking water supply, plumbing, drainage, and sewerage systems. Apart from this, they are also used by the manufacturing sector including for oil and gas pipelines, agricultural equipment, automobile components, and electrical cable conduits.
