Behari Lal Engineering

IPO Size: Rs. 302 cr

• Fresh Issue of Rs. 93 cr (8% dilution) for (i) capex of Rs. 56 cr (ii) 2MW solar panel Rs. 7 cr (ii) repaying Rs. 0.6 cr of Rs. 10.1 cr gross debt
• Offer for Sale (OFS) of Rs. 209 cr - 2/3^rd by promoter (88.5% to shrink to 70.8%) and 1/3^rd by SG Tech (10% stake to drop to 3% post IPO)

Price band: Rs.271-285 per share

M cap: Rs. 1,206 cr (IPO is 25% of m cap)

IPO Date: Wed 12^th Aug to Fri 14^th Aug 2026, Listing Wed 19^th Aug 2026

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

 

Iron and Steel Products Manufacturer

Behari Lal Engineering, named after founding family member, is a Delhi-based company offering customized engineering products, under 3 major categories to automobile, infrastructure and engineering sectors users:

1. Alloy Steel products: Accounting for 45% of Rs. 534 cr topline  
2. Metal Rolls: company is India’s leading producer of metal rolls catering to ~10% of country’s demand: accounts for 25% of revenue  
3. Engineering Castings: now accounts for nearly 20% of topline, after segmental revenue rose a 17% CAGR in the past 4 fiscals.  

 

Capacity Increase

Company has 2 manufacturing plants in Punjab with combined installed capacity of 119,464 MTPA, comprising finished steel processing and foundry capacity of 54,464 MT and rolling mill capacity of 65,000 MT. As capacity utilization touched 88% in FY26, it is expanding rolling mill capacity by 13% or 15,000 TPA at the 2^nd plant, to be funded via IPO proceeds. A fixed asset turn of 6x leads to incremental revenue potential of 330 cr from the brownfield capex alone.

In addition, it is also establishing a 3^rd greenfield manufacturing plant for which construction has started, to be funded via internal accruals.  

 

Healthy Growth Visibility

Company is not impacted by metal price volatility. Due to high value-adding in business operations gross margin is as high as 47% with EBITDA per ton rising at 17% CAGR between FY23-FY26 to Rs. 11,500, from Rs. 7,143 in FY23.

Company’s order book rose by 27% YoY in FY26 to Rs. 118 cr, which has already surged 51% in 2 months, to Rs. 179 cr as of 31.5.26. Thus, the new capacity addition is likely to contribute to healthy growth. Also, 80% revenue from repeat customers supports business longevity.

 

Rising Profits

Sales volume has grown at 8% CAGR between FY23 to FY26, to 88,152 MT, with revenue rising at 5% CAGR to Rs. 534 cr. But, EBITDA has grown at 26% CAGR in the past 4 years to Rs. 89 cr, expanding EBITDA margin to 16.2% in FY26, from 9.6% in FY23.

Factors contributing to margin expansion include steel scrap accounting for nearly half of raw material cost, increasing solar energy installation and rising mix of high-value products to nearly half of the revenue. FY26 PAT stood at Rs. 65 cr, leading to 12% net margin and an EPS of Rs. 16.6.

On a net worth of Rs. 345 cr, company’s debt has reduced to Rs. 10 cr as of 31.5.26, from Rs. 20 cr as of 31.3.26. While debt remains low, company remains averse to debt.

 

Attractive Pricing

M Cap of Rs. 1,206 cr and an Enterprise Value of Rs. 1,173 cr leads to a current year PE multiple of 16x, based on FY27E EPS of about Rs. 18.25. This is attractive for double digit net margin, debt-free balance sheet, 22% RoE and rising capacity.