The VMS TMT IPO is drawing attention with its upcoming issue opening on September 17, 2025. With a fresh-issue size of approximately ₹148.50 crores, VMS TMT is trying to raise capital entirely via new shares. The IPO Review of this kind becomes important for investors who want to understand whether subscribing now can deliver good returns, how the risk-reward stacks up, and what grey market premium (GMP) is indicating. In this VMS TMT IPO analysis, we cover everything from issue details, competitive strengths, financials, peer P/E ratio, reasons to invest, risk factors, how to apply, and ultimately whether to Subscribe or Avoid.
About the Company
- VMS TMT Ltd. was incorporated in 2013. The company is primarily engaged in manufacturing Thermo-Mechanically Treated (TMT) bars, along with scrap and binding wires.
- The manufacturing facility is located at Bhayla Village, near Bavla in Ahmedabad district, Gujarat — giving proximity to raw materials, logistic advantages for its regional markets.
- Distribution is via a non‐exclusive network: as of July 31, 2025, VMS TMT has 3 distributors and 227 dealers across Gujarat and some other states.
- The promoters are Varun Manojkumar Jain, Rishabh Sunil Singhi, Manojkumar Jain, and Sangeeta Jain. Prior to the IPO, promoter holding is ~96.28%, which will drop to ~67.18% post issue.
Competitive Strengths
- Local cost advantage & raw material sourcing: Located in Gujarat, close to scrap sources & transport links, which helps in lowering input and freight costs. Also, the company uses both scrap and billets.
- Brand tie-up / licensing: It has a retail license agreement with Kamdhenu Limited to market some TMT bars under the brand name “Kamdhenu NXT” in Gujarat.
- Focused regional presence: Concentrated operations in Gujarat mean better control over supply chain, dealer network, and costs.
- Improving financials with potential for margin expansion: The company shows rising profitability, though revenues have declined recently. If steel / scrap / billet prices stabilize, margins can improve further.
IPO Issue Details
| Parameter | Detail |
|---|---|
| IPO Date | Opens September 17, 2025, closes September 19, 2025 |
| Listing Date | Tentatively September 24, 2025 on BSE & NSE |
| Issue Size | ₹148.50 crores, all fresh issue of ~1.50 crore shares |
| Price Band | ₹94 to ₹99 per share; face value ₹10 per share |
| Lot Size | 150 shares per lot; retail minimum investment ~ ₹14,850 at the upper band |
| Reservation | Retail – 50%, QIB – up to 30%, NII/HNI – ~20% |
| Promoter Holding (pre / post issue) | Pre-IPO ~96.28%, Post-IPO ~67.18% |
Financials
- Revenue trend: FY 2024: ₹873.17 Cr; FY 2025: ₹771.41 Cr — a decrease of about 12% year-on-year.
- Profit After Tax (PAT): ₹13.47 Cr in FY 2024; ₹15.42 Cr in FY 2025 – modest increase.
- Latest quarter (June 2025) shows ₹8.58 Cr on ~₹213.39 Cr income.
- Margins & Ratios: PAT margin ~1.91% (FY2025); EBITDA margin ~5.91%
- Return on Net Worth (RoNW) ~ 20.14%
- Debt / Equity is high: total borrowings ~₹262 Crores as on June 2025; debt‐equity ~6.06 times.
Peer Comparison — P/E Ratio, Highest, Lowest, Industry Average
| Peer | EPS | P/E | Other Key Metrics |
|---|---|---|---|
| Kamdhenu Limited | ~₹2.18 | ~13.50× | Industry peer, more diversified, decent brand presence. |
| Vraj Iron & Steel Ltd. | ~₹13.55 | ~11.77× | Larger earnings, lower P/E. |
| BMW Industries Limited | ~₹2.83 | ~16.57× | Slightly higher P/E than VMS’s expected. |
| Electrotherm (India) Limited | EPS volatile, P/E ~2.37× | Weak profitability, volatile earnings. |
- Highest P/E among peers: BMW Industries (~16.57×)
- Lowest P/E among peers: Electrotherm (~2.37×)
- Industry average P/E: ~12‑16×.
- Valuation of VMS TMT:
- Pre-IPO P/E ~22× based on FY25 earnings and pre-issue equity.
- Post-IPO P/E drops significantly to ~14×, which is closer to industry average and more attractive compared to peers. This shows that dilution benefits existing shareholders and reduces valuation stress.
Objects of the Issue (Use of Proceeds)
- Repayment / prepayment (full or part) of certain borrowings of the company — ~₹115 crores.
- General corporate purposes — balance proceeds.
Grey Market Price (GMP)
- Latest GMP (as of September 12, 2025) is approx ₹10 premium over issue price.
- Based on upper band ₹99 + GMP ₹10, estimated listing price would be ~ ₹109, which suggests potential listing gain of ~ 10.10%.
Reasons to Invest (Positives — Deep Dive)
- Attractive post-IPO valuation: With a post-issue P/E of ~14×, the IPO looks reasonably priced compared to industry average (12-16×) and not very expensive versus peers.
- Potential listing gain: With GMP ~₹10, there’s indication of listing premium.
- Strong promoter holding: Promoters retaining ~67% after IPO suggests confidence.
- Debt reduction: Using ~₹115 Cr to repay debt will reduce interest burden, improve margins.
- Healthy RoNW: ~20.14% is solid, indicating efficient equity usage.
- Scalability potential: With brand tie-ups and distribution expansion, scope to grow beyond Gujarat.
Risk Factors (Negatives — Deep Dive)
- High debt leverage: Debt/equity ~6.06× is risky. Even after repayment, residual debt remains.
- Declining revenue: 12% fall in FY24 → FY25, showing vulnerability to demand and input costs.
- Thin margins: PAT margin ~1.91% is very low.
- Regional concentration risk: ~98% of revenue from Gujarat; limited geographical diversification.
- Valuation premium: IPO P/E ~22‑23× is higher than peers.
- Dependence on commodity cycles: Steel, scrap, energy prices are volatile.
- Listing uncertainty: GMP may not guarantee listing gain.
How to Apply for this IPO
- Via ASBA (through banks/UPI) or your broker’s platform.
- Retail minimum: 1 lot = 150 shares = ~₹14,850 at upper price.
- Retail investors can apply for up to 13 lots (~₹1.93 lakh).
- QIB / NII allocations: 30% / 20% respectively. Anchor allotment on September 16, 2025.
Conclusion: Should You Invest or Avoid?
- Invest if you are moderately bullish on steel/TMT bar sector, expect Gujarat demand to continue, and look for listing gains. Post-IPO valuation of ~14× makes it look more reasonable than initially perceived.
- Avoid if you are risk-averse — given high debt, thin margins, and regional concentration.
Overall, VMS TMT IPO is a “Subscribe with Caution” — good for potential listing gains, but long-term depends on debt reduction and expansion.
FAQs
1. What is the VMS TMT IPO Date?
Opens September 17, 2025; closes September 19, 2025.
2. What is the IPO Price Band?
₹94 to ₹99 per share.
3. What is the Issue Size?
₹148.50 Cr, all fresh issue.
4. When is the Listing Date?
Tentatively September 24, 2025.
5. What is the Grey Market Premium (GMP)?
~₹10 as of Sept 12, 2025.
6. How does valuation compare with peers?
At ~14× post-IPO P/E, it is in line with industry average (12-16×), making it reasonably priced.
7. Is it good for long-term?
Better for listing gains; long-term depends on execution, margin improvement, and debt control.
Disclaimer: This article is for informational purposes only and is not a recommendation to buy, sell or hold any shares or apply for any IPO. The securities market is subject to risks, and readers should consult their financial advisor before making any investment decisions.
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