Vibhor Steel Tubes Limited (VSTL) has marked a significant milestone in its expansion journey by commencing supply of Electric Resistance Welded (ERW) and Galvanized (GI) pipes from its newly commissioned greenfield plant in Sundargarh, Odisha. This development represents a substantial boost to the company's production capabilities and market reach.

Plant Specifications and Investment

The new facility boasts an impressive capacity of 156,000 MTPA (Metric Tonnes Per Annum) and was established with an investment of Rs 119.83 crore over a 30-month period. Spread across 23.98 acres, the plant received electricity access on July 11, paving the way for the start of commercial production in the same month.

Expanded Product Portfolio

In addition to ERW and GI pipes, the Odisha plant is set to manufacture a range of value-added products, including:

• Crash barriers
• Power transmission line towers
• High mast lighting poles
• Octagonal poles
• Monopoles

This diversification into high-value products is expected to significantly boost the company's profit margins in the coming quarters.

Increased Production Capacity

With the addition of the Odisha plant, VSTL's total production capacity has surged to 377,000 MTPA, spread across three manufacturing units located in Maharashtra, Telangana, and Odisha. This expansion strengthens the company's position in the steel tubes and pipes sector.

Strategic Importance

Vijay Kaushik, Chairman and Executive Director of Vibhor Steel Tubes, emphasized the strategic importance of the new facility, stating, "The commencement of supply from the Sundargarh facility marks a significant milestone in strengthening our production and distribution capabilities, ensuring timely supply and enhanced service to our valued customers." He further added that the plant would enable the company to tap into new markets and focus on exports "in a big way."

Financial Performance

VSTL reported the following financial results:

These figures indicate the company's solid financial footing as it embarks on this expansion phase.

Manufacturing Agreement

It's worth noting that VSTL has a manufacturing agreement with Jindal Pipes, which accounts for over 80% of its total turnover. Under this agreement, VSTL manufactures and supplies finished goods under the brand name "Jindal Star."

Future Outlook

The company anticipates significant growth in both top-line and bottom-line figures in the forthcoming quarters, driven by the new plant's focus on high value-added products and increased production capacity. This expansion is expected to enhance VSTL's competitiveness in the domestic market and potentially boost its export capabilities.

As Vibhor Steel Tubes Limited continues to strengthen its market position with this new facility, industry observers will be keenly watching how this strategic expansion translates into financial performance and market share in the coming months.

Investors in Vibhor Steel Tubes and Borana Weaves are bracing for potential market movements as both companies face the expiration of their shareholder lock-in periods on Thursday, August 21.

Vibhor Steel Tubes Lock-in Expiry

Vibhor Steel Tubes is set to see a significant portion of its shares become eligible for trading. Approximately 38 lakh shares, representing 20% of the company's outstanding equity, will be released from the one-and-a-half-year lock-in period.

The company, which had an impressive initial public offering (IPO) with over 300 times subscription, has experienced a rollercoaster ride in its share price since listing. Vibhor Steel Tubes made a stellar market debut at ₹425.00, marking a 151% premium to its IPO price of ₹151.00. However, the stock has since corrected, returning to levels close to its initial offering price.

Borana Weaves Lock-in Expiry

Simultaneously, Borana Weaves will see the end of its three-month lock-in period. This will result in 15 lakh shares, constituting 6% of the company's outstanding equity, becoming available for trading.

Borana Weaves also witnessed strong investor interest during its IPO, securing nearly 150 times subscription. Unlike Vibhor Steel Tubes, Borana Weaves' share price has remained stable, currently trading at its IPO price of ₹216.00.

IPO Sizes and Market Performance

Both companies conducted relatively modest-sized initial public offerings:

The expiry of these lock-in periods could potentially impact the trading volumes and price movements of both stocks. Investors and market analysts will be closely watching how the newly tradeable shares affect the market dynamics for Vibhor Steel Tubes and Borana Weaves in the coming days.

As always, investors are advised to conduct thorough research and consider their risk appetite before making any investment decisions, especially in light of these upcoming changes in share availability.