Steamhouse India

Steamhouse India

By Geetanjali Kedia
about 3 days ago

IPO Size: Rs. 414 cr

  • Fresh Issue of Rs. 353 cr (16% dilution) for (i) capex Rs. 114 cr (ii) repaying Rs. 180 cr of Rs. 325 cr gross debt
  • Offer for Sale (OFS) of Rs. 61 cr, by promoter (96% to shrink to 78% post IPO)

Price band: Rs. 77-81 per share

  • Raised Rs. 50 cr in pre-IPO placement at Rs. 73 per share on 24 June 2026

M cap: Rs. 2,239 cr (IPO is 18% of m cap)

IPO Date: Wed 9th Sep to Fri 11th Sep 2026, Listing Thu 17th Sep 2026

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

 

Steam Generation and Distribution Company

Steamhouse India is a 11 year old Surat, Gujarat producer and distributor of steam to industrial users, having an installed capacity of 345 tonnes per hour (TPH) or 2.18 million TPA, across 7 facilities in South Gujarat. Company added nitrogen gas production and distribution in Feb 2025, having installed capacity of 350 nm3 per hour across a single unit. But nitrogen sales have been just Rs. 30 lakh in H2FY26, even after 6 months of launch. Even steam capacity utilization is just 42-43%, for the past 3 fiscals.

 

Doubling Steam Capacity

Over the next 2 years, Steamhouse is increasing its steam distribution capacity from 345 TPH to 705 TPH.

  • Of this, 180 TPH capacity expansion with Rs. 209 cr investment is underway, with Rs. 157 cr incurred as of day (represented by capital work in progress). Total funding is split Rs. 125 cr debt and Rs. 90 cr internal accruals. 90 TPH capacity will be commercialised by CY26-end and 90 TPH in CY27.
  • Another 180 TPH capacity, comprising 120 TPH brownfield and 60 TPH greenfield, with Rs. 114 cr investment will be funded via IPO proceeds, to be operational over next 2 years.

Thus, company’s annual installed capacity for steam will double from 2.19 million TPA to 4.47 TPA by FY28E-end, implying 27% capacity CAGR till FY29E.

 

Margins to Rise

FY26 revenue stood at Rs. 492 cr, comprising Rs. 340 cr steam and Rs. 132 cr from coal trading, the latter being discontinued wef 1.4.26 as company does not have minimum order quantity requirement for coal purchase now. Thus, EBITDA margin, which had slipped from 23% in FY24 (when no coal trading) to 17% in FY26, is likely to expand to the earlier levels.

FY26 PAT stood at Rs. 39 cr, leading to 8% net margin and an EPS of Rs. 1.7. On net worth of Rs. 173 cr, company’s net debt to equity ratio of 1.6:1 will shrink to 0.3:1 post repayment via IPO.

 

Fully Priced in Short Term

M Cap of Rs. 2,239 cr and Enterprise Value of Rs. 2,375 cr implies a current year PE multiple of 38x, on FY27E estimated EPS of Rs. 2.2, making the stock fully-priced for the short term. Even the 11% premium on pre-IPO price of Rs. 73 per share, after 3 months, is unjustified.

Since capacity addition will be Dec 2026 onwards, it will aid revenue FY28E onwards, with FY28E estimated EPS at Rs. 2.8. This leads to a one-year forward PE multiple of 29x, which is attractive for double-digit net margin, low leverage, 16% expected RoCE and further topline growth likely in FY29E thanks to capacity addition. Peer

Linde is trading much higher for its scale and MNC parentage, while Ellenbarrie is ruling at similar multiples for lower growth.