VMS TMT Makes Stock Market Debut with 12% Grey Market Premium
VMS TMT, a Gujarat-based steel manufacturer, is launching its IPO today. The company offered 1.5 crore fresh shares priced between Rs 94-99 per share, valuing it at Rs 491 crore. The grey market premium is around 12%. VMS TMT specializes in TMT bars for construction, with a facility near Ahmedabad. The company showed significant financial improvement, with FY25 profit after tax at Rs 268 crore and EBITDA margin around 39%. IPO proceeds will mainly repay Rs 115 crore in borrowings. Post-IPO, promoter holding will decrease from 96.3% to 67.2%. At Rs 99 per share, the stock is valued at 25 times FY25 earnings.
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VMS TMT, a Gujarat-based steel manufacturer, is set to make its stock market debut today following the closure of its Rs 148-crore Initial Public Offering (IPO). The company's shares are commanding attention with a grey market premium of approximately 12%, suggesting modest investor expectations for the newly listed entity.
IPO Details
The VMS TMT IPO was priced in the range of Rs 94-99 per share, offering 1.5 crore fresh shares to the public. At the upper end of the price band, the company is valued at a market capitalization of about Rs 491 crore.
Company Profile
VMS TMT specializes in the manufacture of TMT (Thermo Mechanically Treated) bars, which are widely used in the construction industry. The company's manufacturing facility is located in Bhayla village near Ahmedabad, Gujarat. VMS TMT markets its products under its own brand and also through a licensing agreement with Kamdhenu for the 'Kamdhenu NXT' brand in Gujarat.
Financial Performance
The company has reported a remarkable financial turnaround in recent years:
| Financial Metric | FY24 | FY25 |
|---|---|---|
| Revenue | 873.00 | 770.00 |
| Profit After Tax | 13.50 | 268.00 |
| EBITDA Margin | <5.00 | ~39.00 |
Despite a moderation in revenue, VMS TMT has shown significant improvement in profitability and operational efficiency. The company achieved a Return on Equity (RoE) of 54% and Return on Invested Capital (RoIC) of 96% for FY25. The debt-equity ratio stands at 0.9x, indicating a balanced capital structure.
IPO Proceeds Utilization
The funds raised from the IPO will be primarily used for:
- Repayment of borrowings worth Rs 115 crore
- Funding general corporate purposes
Shareholding Structure
Post-IPO, the promoter holding in VMS TMT will decrease from 96.3% to 67.2%, enhancing the public float and potentially improving liquidity in the stock.
Valuation
At the upper price band of Rs 99, VMS TMT's stock was valued at 25 times its FY25 earnings, reflecting investor expectations of continued strong performance.
As VMS TMT makes its market debut, investors will be closely watching its performance, given the company's recent financial turnaround and the current market sentiment towards new listings in the manufacturing sector.
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