Rajputana Stainless
IPO Size: Rs. 255 cr
- Fresh Issue of Rs. 179 cr for (i) Rs. 98 cr repayment of Rs. 141 cr gross debt as of Dec 25 (ii) Rs. 18.6 cr brownfield capex for forward integration into seamless pipes
- Offer for Sale (OFS) of Rs.76 cr by the promoter (78% stake to shrink to 57%)
Price band: Rs. 116-122 per share
M cap: Rs. 1,020 cr, implying 25% dilution
IPO Date: Mon 9th Mar to Wed 11th Mar 2026, Listing Mon 16th Mar 2026
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Gujarat based Steel Manufacturer
Rajputana Stainless is a 33 year old manufacturer, of long and flat stainless-steel products, such as billets, forging ingots, bars, flat and patti, having a rolling capacity of 36,000 MTPA. From fresh issue proceeds, company aims at capex for stainless-steel seamless pipes manufacturing unit, with a proposed installed capacity of 9,600 MTPA. While this will be operational by Jan 2027, it is an unchartered territory for the company.
Stagnant Revenue with Rising Debt
Company’s topline has remained stagnant in past 3 years, at Rs. 932 cr in FY25, which is actually down 2% from FY23’s Rs. 948 cr. Since installed capacity for melting and rolling are fully utilized, for the past 3.5 years, growth outlook remains bleak.
Just prior to IPO, net margin surged to 4.9% in H1FY26, on revenue of Rs. 502 cr, from 4.3% net margin in FY25. Net margin for FY23 was as low as 2.5%.
Besides this, gross debt has surged 64% in the past quarter from Rs. 86 cr as of 30.9.25 to Rs. 141 cr as of 31.12.25, which is quite alarming.
Expensive Pricing
H1FY26 net profit and EPS stood at Rs. 24 and Rs. 3.5 respectively. After factoring in debt reduction post IPO, FY27E net profit is estimated at about Rs. 70 cr, which leads to a PE multiple of 17x, on a one-year forward basis. This is quite expensive for a small B2B player, operating in price-sensitive steel industry, with slim margins. Growth triggers remain weak and sharp reduction in promoter holding to 57% post IPO is not comforting.
