VMS TMT Launches Rs 149 Crore IPO with 23% Grey Market Premium
VMS TMT, an Ahmedabad-based TMT bar manufacturer, has opened its IPO to raise Rs 149 crore. The price band is set at Rs 94-99 per share, with the issue closing on Friday and listing scheduled for September 24 on NSE and BSE. The company plans to use Rs 115 crore of the proceeds to repay borrowings. Despite a revenue decline from Rs 873 crore in FY23 to Rs 771 crore in FY25, VMS TMT improved its profit after tax from Rs 4.20 crore to Rs 14.70 crore and increased its EBITDA margin from 2.5% to 5.9%. The grey market premium stands at 23%, indicating positive investor sentiment. Some analysts recommend long-term subscription despite aggressive pricing.
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VMS TMT, an Ahmedabad-based manufacturer of TMT bars, has opened its Initial Public Offering (IPO) to raise Rs 149 crore. The company has set the price band at Rs 94-99 per share, with the issue closing on Friday and listing scheduled for September 24 on both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
Company Profile
VMS TMT specializes in the production of TMT bars for the construction industry, which accounts for 95% of its revenue. The company operates a plant with an annual capacity of 2,00,000 metric tonnes. In Gujarat, VMS TMT markets its products under the Kamdhenu brand through a network of 3 distributors and 227 dealers.
Financial Performance
The company's financial trajectory shows mixed results:
| Fiscal Year | Revenue (Rs Crore) | Profit After Tax (Rs Crore) | EBITDA Margin |
|---|---|---|---|
| FY23 | 873.00 | 4.20 | 2.5% |
| FY25 | 771.00 | 14.70 | 5.9% |
Despite a decline in revenue from Rs 873.00 crore in FY23 to Rs 771.00 crore in FY25, VMS TMT has shown significant improvement in profitability. The company's profit after tax increased from Rs 4.20 crore in FY23 to Rs 14.70 crore in FY25. Notably, the EBITDA margin expanded from 2.5% in FY23 to 5.9% in FY25, indicating improved operational efficiency.
IPO Details
- Issue Size: Rs 149 crore
- Price Band: Rs 94-99 per share
- Closing Date: Friday (current week)
- Listing Date: September 24
- Listing Venues: NSE and BSE
Use of Proceeds
The primary objective of the IPO is to repay borrowings. Out of the total funds raised, Rs 115 crore will be allocated towards debt repayment, which could potentially improve the company's financial health and reduce interest costs.
Market Sentiment
The grey market premium for VMS TMT's IPO stands at 23%, suggesting positive investor expectations for the stock. This premium indicates that investors in the unofficial grey market are willing to pay 23% above the issue price, reflecting optimism about the company's prospects.
Analyst Recommendations
Despite the aggressive pricing of the IPO, some analysts are recommending long-term subscription. They cite the company's recent improvements in profitability and its strong distribution network in Gujarat as factors supporting their positive outlook.
Investors considering participation in this IPO should carefully evaluate the company's financial performance, growth prospects, and the competitive landscape of the steel sector before making an investment decision.
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