Newmalayalam Steel
Book Building issueSMENSE₹41.76 Cr issue
0.00%
Listing gain over issue price
Issue size
₹41.76 Cr
1 lot at cut-off
₹1,44,000
Lot size
1,600shares
Open
19 Dec 2024
Close
23 Dec 2024
Allotment
24 Dec 2024
Listing
27 Dec 2024
Listing performance
Issue price
₹90
Listed at
₹90
Listing-day close
₹85.50
Latest price
₹19.20
Close on 23 Oct 2026
Listing gain
0.00%
Return since issue
-78.67%
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 19 Dec 2024 – 23 Dec 2024
- Listing date
- 27 Dec 2024
- Face value
- ₹10 per share
- Issue price
- ₹90 per share
- Lot size
- 1,600 shares
- Issue type
- Book Building issue
- Listing at
- NSE
- Total issue size
- ₹41.76 Cr
- Market cap at offer price
- ₹156 Cr
- Promoter holding
- 99.80% → 73.02% pre-issue → post-issue
- ISIN
- INE0TP801012
- Registrar
- Kfin Technologies Ltd.
- Lead managers
- Khandwala Securities Ltd.
- Registered office
- Door No.2/546/A & 2/546/B Mala, Pallipuram P O, Mala, Kerala
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Market maker | 2,33,600 | — | — |
Application size
Minimum 1,600 shares per lot, in multiples, at ₹90
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 1,600 | ₹1,44,000 |
| S-HNI (min) | 2 | 3,200 | ₹2,88,000 |
| S-HNI (max) | 6 | 9,600 | ₹8,64,000 |
| B-HNI (min) | 7 | 11,200 | ₹10,08,000 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Valuation and performance
Valuation at offer price
₹90 per share
| Metric | Pre-issue | Post-issue |
|---|---|---|
| EPS (₹) | 3.38 | 6.01 |
| P/E (×) | 26.63 | 14.98 |
| Price to book (×) | 2.81 | — |
| Market cap | — | ₹156 Cr |
Key performance indicators
Latest reported period
- Return on net worth
- 10.55%
- ROCE
- 17.60%
- PAT margin
- 1.41%
- NAV per share
- ₹32
- Price to book
- 2.81
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About Newmalayalam Steel
Newmalayalam Steel Limited, incorporated on March 31, 2017 and converted to a public limited company on February 1, 2024, is engaged in the business of manufacturing galvanised pipes, tubes, and sheets. The company operates a manufacturing unit in Kerala and sells its products under the 'Demac Steel' brand through a widespread dealer base. Galvanised pipes and tubes are used for building roofs to reduce heat and avoid leakage, with galvanisation offering added advantages of increased product life and rust-free quality. The products experience constant demand in Kerala's construction industry due to the region's inclement weather conditions. The company generates revenue primarily through dealers (88.01% in H1 FY2025) and direct customers (11.99%), with significant related party transactions with group company Jaihind Steel Private Limited.
Company Analysis
from RHPNewmalayalam Steel Limited manufactures galvanised pipes, tubes, and sheets for the construction industry in Kerala.
Newmalayalam Steel Limited, incorporated on March 31, 2017 and converted to a public limited company on February 1, 2024, is engaged in the business of manufacturing galvanised pipes, tubes, and sheets. The company operates a manufacturing unit in Kerala and sells its products under the 'Demac Steel' brand through a widespread dealer base. Galvanised pipes and tubes are used for building roofs to reduce heat and avoid leakage, with galvanisation offering added advantages of increased product life and rust-free quality. The products experience constant demand in Kerala's construction industry due to the region's inclement weather conditions. The company generates revenue primarily through dealers (88.01% in H1 FY2025) and direct customers (11.99%), with significant related party transactions with group company Jaihind Steel Private Limited.
steel manufacturingconstruction materialsgalvanised products
Objects of the Issue
- IT / Technological Upgradation of existing manufacturing facility ₹287.62 lakhs p.19
- Expansion of the existing solar facility for power generation ₹234.33 lakhs p.19
- Funding of expenditure towards civil construction of new factory shed cum storage facility within the existing factory premises situated at Kerala ₹255.95 lakhs p.19
- Advertising and Marketing for brand building ₹505.55 lakhs p.19
- Funding incremental working capital requirements of our Company ₹1,420.00 lakhs p.19
- General Purpose ₹1,035.50 lakhs p.19
- IPO expenses ₹437.05 lakhs p.19
- IT / Technological Upgradation of existing manufacturing facility ₹287.62 lakhs p.79
- Expansion of the existing solar facility for power generation ₹234.33 lakhs p.79
- Funding of expenditure towards civil construction of new factory shed cum storage facility within the existing factory premises situated at Kerala ₹255.95 lakhs p.79
- Advertising, Marketing and Brand Building ₹505.55 lakhs p.79
- Funding incremental working capital requirements of our Company ₹1,420.00 lakhs p.79
- Issue related expenses ₹437.05 lakhs p.79
- General Corporate purposes ₹1,035.50 lakhs p.79
- Funding capex for expansion of manufacturing capacity by establishing a new factory shed ₹287.62 lakhs for IT/Technological Upgradation of existing manufacturing facility; ₹234.33 lakhs for Solar installation; ₹188.74 lakhs for Steel building fabrication for factory; ₹67.21 lakhs for Material for building for factory constructions p.125
- Repayment of borrowings
- Funding working capital requirements and general corporate purposes
Issue Structure
- Total Issue
- ₹4,176.00 lakhs
- Fresh Issue
- 46,40,000 Equity Shares of face value of ₹10/- each at ₹90 per share aggregating ₹4,176.00 lakhs
- Offer for Sale
- Not Applicable
- Price Band
- Floor Price: ₹85; Cap Price: ₹90
- Lot Size
- 1,600 Equity Shares
- Face Value
- ₹10/- per Equity Share
Business Model
The company manufactures galvanised pipes, tubes, and sheets and sells them through a dealer network in Kerala. Revenue is primarily earned from dealers who further sell to contractors, builders, and consumers. The company also engages in direct sales to customers. It purchases pre-galvanised coils as raw materials from various sources including imports from Vietnam, domestic suppliers like JSW and AMNS, and from Jaihind Steel Private Limited. The company maintains significant related party transactions with its promoter group entities.
Business Segments
Manufacturing of galvanised pipes and tubes used for building roofs to reduce heat and avoid leakage, with rust-free properties
Manufacturing of galvanised sheets with rust-resistant properties for construction applications
Manufacturing of galvanised pipes, tubes, and sheets using electric resistance welding technology for construction and household applications in Kerala
Square, rectangular, and round pipes used in building construction, architecture, automobiles, industrial equipment, solar panel frames, interior works, furniture, décor, signage, and agricultural equipment
Galvanized iron pipes used in building construction, automobiles, industrial equipment, solar panel frames, interior works, furniture, décor, signage, and agricultural equipment
Raw material used for the production of pipes
Used in gate works, general engineering, construction, vehicle body works, fencing and barricade
Coils slitted into different widths required for producing different sizes of tubes or pipes
Includes scraps and rejected pipes
Manufacturing and sale of galvanized pipes, tubes, and sheets for construction, roofing, and general household applications
SWOT Analysis
Strengths
- • Established brand presence in Kerala under 'Demac Steel' with consistent demand(p.18)
- • Steady historical growth through dealer base expansion and production capacity increases(p.30)
- • Strong financial performance with consistent profitability in past years(p.30)
- • Diversified distribution network with 121 dealers across Kerala(p.26)
- • No independent verification of industry data(p.45)
- • Established production capacity and operations(p.45)
- • Established brand presence and customer loyalty in Kerala market(p.120)
- • Diverse product portfolio across pipes, tubes, and sheets reducing revenue concentration(p.121)
- • Strategic location near Cochin Airport and Port reducing logistics costs(p.124)
- • Cost-efficient sourcing from international suppliers(p.124)
- • ISO 9001:2015 certification demonstrating quality management systems(p.122)
- • Integrated multi-product manufacturing facility with economies of scale(p.124)
- • Solar power generation reducing electricity dependency(p.129)
- • Established track record with 7+ years of operations since incorporation(p.205)
- • Strong brand presence in Kerala market under 'Demac Steel' brand(p.205)
- • Installed manufacturing capacity of 7,500 MT from two electric resistance welding tube mills(p.205)
- • Positive net worth and operating profitability across multiple years(p.222)
- • ISO 9001:2015 certified management systems(p.219)
Weaknesses
- • High dependence on Jaihind Steel Private Limited for 28.77% of revenue and 34.44% of raw materials(p.27)
- • Lack of formal agreements with key suppliers Jaihind Steel and Jaihind Tubes for business continuity(p.27)
- • Geographic concentration of manufacturing operations in Kerala(p.28)
- • History of delays in payment of statutory dues including EPF and GST(p.31)
- • Significant reliance on dealers (88.01% of revenue) with no long-term formal agreements(p.26)
- • Negative operating cash flows in FY 2024(p.39)
- • Directors lack formal educational qualifications(p.35)
- • No formal contracts with third-party transportation providers(p.37)
- • Inability to adequately procure and maintain insurance coverage(p.45)
- • No historical dividend payments with uncertain future dividend policy(p.45)
- • Vulnerability to employee fraud and inventory theft(p.45)
- • Resource strain from listing compliance requirements(p.46)
- • Significant reliance on capital raise deployment and management discretion(p.45)
- • High dependence on single major customer (Jaihind Steel accounting for 28.97% of revenue)(p.118)
- • Geographic concentration of operations in Kerala only(p.120)
- • Declining export volumes with sharp 50.2% year-on-year fall in FY23(p.110)
- • Declining revenue from operations (₹35,479.84 lakhs in FY23 to ₹30,016.06 lakhs in FY24)(p.117)
- • Declining profit after tax and EBITDA margin compression(p.117)
- • Dependency on imports for raw materials with limited domestic coking coal availability(p.114)
- • Trademark application objected by authorities(p.132)
- • High debt burden with total borrowings of ₹3,917.94 lakhs as of September 30, 2024(p.212)
- • Significant unsecured personal loans from promoters totaling ₹280 lakhs(p.204)
- • Declining profitability with PAT declining 28.91% from FY2023 to FY2024(p.209)
- • Multiple personal guarantees from promoters and directors securing bank credit facilities(p.189)
- • Group companies engaged in similar business activities creating conflict of interest(p.178)
- • Manufacturing facilities concentrated in single location creating operational risk(p.205)
Opportunities
- • Expansion of manufacturing capacity and distribution network in new markets(p.33)
- • Government-backed affordable housing schemes expected to increase steel demand(p.34)
- • Expansion of solar facility for power generation to reduce operational costs(p.19)
- • Infrastructure development and construction spending growth supporting steel demand(p.18)
- • Advertising and brand building initiatives to strengthen market position(p.19)
- • IT and technological upgradation to improve operational efficiency(p.19)
- • IT and technological upgradation of manufacturing(p.81)
- • Expansion of solar facility for cost reduction and energy independence(p.82)
- • Construction of new factory shed to expand production capacity(p.82)
- • Geographic expansion through advertising and brand building(p.85)
- • Incremental working capital funding for growth(p.85)
- • Government infrastructure investment surge with capex allocation increased to ₹10 lakh crore(p.114)
- • Expanding renewable energy sector with solar installations growing at 29% CAGR(p.115)
- • Rising demand for solar structural pipes supporting solar farms expansion(p.115)
- • Pradhan Mantri Awas Yojana housing construction gaining momentum(p.112)
- • Jal Jeevan Mission allocating ₹70,000 crore for water distribution pipes(p.113)
- • Global steel demand recovery with 2.3% growth forecasted for CY23(p.109)
- • National Steel Policy targeting crude steel capacity of 300 MT by 2030(p.114)
- • India's per capita steel consumption significantly below global average providing growth headroom(p.113)
- • Growing demand for galvanised pipes and tubes in Kerala construction sector(p.205)
- • Potential migration to NSE Main Board with listing criteria easily achievable(p.235)
- • Expansion opportunities through increased installed capacity utilization(p.205)
Threats
- • High cyclicality of steel industry and vulnerable to price fluctuations(p.29)
- • Significant raw material dependency on pre-galvanised coils with supply chain risks(p.26)
- • Seasonal fluctuations in demand with lower sales during monsoon season(p.29)
- • Intense competition from larger organized and unorganized steel manufacturers(p.40)
- • Vulnerability to local economic, regulatory and social disruptions in Kerala(p.28)
- • Dependence on electricity supply with vulnerability to tariff hikes(p.39)
- • Industrial accident risks from hazardous steel manufacturing processes(p.30)
- • Regulatory changes and policy uncertainties affecting infrastructure spending(p.34)
- • Foreign exchange rate fluctuations affecting equipment procurement costs(p.34)
- • Evolving and uncertain regulatory environment affecting business(p.49)
- • Adverse impact of GST changes and tax law amendments(p.49)
- • Heavy dependence on Indian economic conditions(p.49)
- • Foreign investment transfer restrictions(p.49)
- • Risk from India's debt rating downgrade affecting financing costs(p.50)
- • Political instability and changes in economic liberalization policies(p.50)
- • Global economic and political factors beyond management control(p.50)
- • Natural calamities and disaster impacts on economy(p.50)
- • Terrorism and civil unrest impacts on markets and business(p.50)
- • Volatile international steel prices impacting margins(p.108)
- • Geopolitical tensions impacting global demand and supply(p.108)
- • Chinese market weakness and lockdown impacts on global demand(p.108)
- • Government export duty restrictions previously imposed (May-November 2022)(p.110)
- • Competition from unorganized sector and Asian counterparts(p.115)
- • Inflation and high interest rates limiting demand recovery(p.109)
- • Higher input costs and logistical challenges affecting highway construction(p.112)
- • Inflationary pressure potentially affecting automobile demand(p.112)
- • Volatility in steel raw material prices affecting profitability(p.206)
- • Dependence on Kerala construction sector economic conditions(p.206)
- • Seasonal revenue fluctuations tied to monsoon season(p.206)
- • Global economic factors affecting steel trade and export-import dynamics(p.206)
- • Intense competition from established regional and national steel tube manufacturers(p.178)
- • Revenue decline of 15.40% in FY2024 due to price fall in steel sector(p.208)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Vazhappily Davis Varghese | Promoter | 49.74% | 36.39% |
| Divyakumar Jain | Promoter | 28.85% | 21.11% |
| Ankur Jain | Promoter | 16.84% | 12.32% |
| Mahendra Kumar Jain | Promoter | 4.21% | 3.08% |
| Molly Varghese | Promoter | 0.08% | 0.06% |
| Cyriac Varghese | Promoter | 0.08% | 0.06% |
| Vazhappily Davis Varghese | Promoter | 49.74% | 36.39% |
| Divyakumar Jain | Promoter | 28.85% | 21.11% |
| Ankur Jain | Promoter | 16.84% | 12.32% |
| Mahendra Kumar Jain | Promoter | 4.21% | 3.08% |
| Molly Varghese | Promoter | 0.08% | 0.06% |
| Cyriac Varghese | Promoter | 0.08% | 0.06% |
| Vazhappily Davis Varghese | Promoter | 49.74% | — |
| Divyakumar Jain | Promoter | 28.85% | — |
| Mahendra Kumar Jain | Promoter | 4.21% | — |
| Molly Varghese | Promoter | 0.08% | — |
| Cyriac Varghese | Promoter | 0.08% | — |
| Vazhappily Davis Varghese | Promoter | 49.74% | — |
| Divyakumar Jain | Promoter | 28.85% | — |
| Ankur Jain | Promoter | 16.84% | — |
| Mahendra Kumar Jain | Promoter | 4.21% | — |
| Molly Varghese | Promoter | 0.08% | — |
| Cyriac Varghese | Promoter | 0.08% | — |
Leadership
Vazhappily Davis Varghese · Managing Director
Mahendra Kumar Jain · Chairman
Shravan Kannan Dev · Company Secretary and Compliance Officer
Rahul Jain · Chief Financial Officer
Auto-extracted from the company's RHP using AI, with each fact linked to its source passage (hover any row to see the quote & page). Provided for research only, not investment advice — verify against the official RHP before relying on it.
Newmalayalam Steel IPO FAQs
What is the lot size of Newmalayalam Steel IPO?
The minimum lot size of Newmalayalam Steel IPO is 1,600 shares. One lot costs ₹1,44,000 at the cut-off price.
When does Newmalayalam Steel IPO open and close?
Newmalayalam Steel IPO opened for subscription on 19 Dec 2024 and closed on 23 Dec 2024.
What is the listing date of Newmalayalam Steel IPO?
Newmalayalam Steel IPO listed on 27 Dec 2024.