Karbonsteel Engineering IPO opens for subscription today; GMP among key details to know before subscribing

Synopsis

Karbonsteel Engineering is set to launch its Initial Public Offering of Rs 59 crore. The IPO will open on Tuesday and close on September 11. The company aims to list on BSE SME platform on September 16. It plans to use the funds for facility expansion and debt repayment. The IPO includes a fresh issue and an offer for sale.

Karbonsteel Engineering will launch its Rs 59 crore IPO on Tuesday with the issue receiving early attention in the unlisted market. The shares are quoting a GMP of around 12% over the upper price band of Rs 159. The three-day book-building issue will close on September 11, and listing is scheduled for September 16 on the BSE SME platform. Ahead of the issue opening, the company raised Rs 17 crore from anchor investors, who subscribed to 10.6 lakh shares.

IPO structure and price band

The IPO comprises a fresh issue of 30 lakh shares aggregating to Rs 48.33 crore and an offer-for-sale (OFS) of 6.9 lakh shares worth Rs 10.97 crore, taking the total issue size to 37.29 lakh shares. The price band has been fixed between Rs 151 and Rs 159 per share.

Investors can bid for a minimum lot of 1,600 shares, requiring an outlay of Rs 2.54 lakh at the upper end of the price band. For high-net-worth individuals, the minimum application size is three lots or 2,400 shares, amounting to Rs 3.81 lakh.

Company profile

Karbonsteel Engineering is engaged in designing, manufacturing, and supplying heavy and precision fabricated steel structures. The company caters to industries such as steel, railways, oil and gas, refineries, and infrastructure projects.

Its offerings include heavy steel structures, pre-engineered buildings (PEBs), precision components, and bridge structures.

Karbonsteel operates two manufacturing facilities in Gujarat and Maharashtra with a combined installed capacity of 32,400 metric tonnes annually.

Financial performance

The company has reported consistent growth in revenue and profitability. For FY25, it posted revenue of Rs 273.91 crore, up 25% from Rs 218.77 crore in FY24. Profit after tax jumped 50% year-on-year to Rs 14.16 crore, compared with Rs 9.42 crore in the previous fiscal.

Objects of the issue

The company plans to utilise Rs 12.29 crore from the net proceeds for expansion of its Umbergaon facility, Rs 3.08 crore for repayment of borrowings, and Rs 25.25 crore towards working capital requirements. The rest will go towards general corporate purposes.

With a GMP of about Rs 19 over the issue price, the stock is expected to list around Rs 178, indicating moderate listing gains if the sentiment sustains.

Seren Capital is the book-running lead manager, and Maashitla Securities is the registrar to the issue. Rikhav Securities and SS Corporate Securities are acting as market makers.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)

...moreless

...moreless