VMS TMT Ltd

About VMS TMT Limited IPO

VMS TMT Limited IPO is an IPO of up to 1,50,00,000 equity shares. It consists of fresh issue of up to 1,50,00,000 equity shares. The shares will be allotted on TBA. The credit of shares to the demat account will take place on TBA and the initiation of refunds will take place on TBA.

Objective of VMS TMT Limited IPO

• Funding capital expenditure for setting up of solar power plant at Survey Nos. 82, 81, 63, 64, 61,49,40 and 39 situated at Village Zenta, Tharad Taluka, Banaskantha District, Gujarat–385565 (Solar Power Plant).
• Funding long-term working capital requirements of the company.
• Repayment/prepayment, in full or part, of certain borrowings availed by the company.
• General corporate purposes.

Industry Outlook

In fiscal years 2023 and 2022, the TMT bar industry showed a significant recovery, with net sales increasing by 8.2% in FY 2023 and an impressive 44.8% in FY 2022. This indicates strong demand and improved operations after the pandemic. However, the higher costs of raw materials in FY 2023 affected the percentage of net sales compared to FY 2022.

Profit after tax grew by 28.0% in FY 2023, indicating that the industry is doing well despite cost challenges. This strong profit growth shows the industry's resilience and its ability to adapt to changing market conditions.

India's TMT bar industry is a flourishing market, anticipated for significant growth.

Demand for TMT bar in India is projected to accelerate further owing to government policies and initiatives which have been instrumental in driving the demand as it aims at achieving quality and sustainable infrastructure.

As a result, the use of TMT bars that complement the advancements in building technology and towards the development of robust and sustainable infrastructure, is poised to witness healthy growth in the coming years.

Company Information

VMS TMT Limited is engaged in manufacturing Thermo Mechanically Treated Bars (TMT Bars) at their manufacturing facility situated at Bhayla Village, Ahmedabad, Gujarat, India. TMT Bars are high-strength reinforcement steel used widely in construction due to their exceptional strength, ductility, and corrosion resistance (Dun & Bradstreet Report). They conduct their business predominantly in the state of Gujarat from where they have derived over 98% of their revenues from operations in fiscal 2024.

Risks of VMS TMT Limited IPO

• Their business and profitability are substantially dependent on the availability and cost of their raw materials. They are also dependent on third-party suppliers for meeting their raw material requirements which are on a purchase order basis. Any disruption to the timely and adequate supply of raw materials, or volatility in the prices of raw materials may adversely impact their business, results of operations and financial condition.

• The demand and pricing of TMT bars is volatile and sensitive to the cyclical nature of the industries it serves including raw material prices. A decrease in TMT Bar prices may have a material adverse effect on their business, results of operations, prospects and financial condition.

• Their manufacturing facilities and their sales are concentrated in Gujarat, India. Any significant social, political, economic or seasonal disruption, natural calamities or civil disruptions in Gujarat could have an adverse effect on their business, results of operations, and financial condition.

• The company is dependent on their retail licence agreements with Kamdhenu Limited. If the retail licence agreements are terminated, they may consequently lose distributors and dealers that distribute their products, which could materially and adversely impact their business, results of operations and financial condition.

Anchor Investor Information

The Anchor Investor Bidding Date shall be one Working Day prior to the Bid/Issue Opening Date.

IPO Registrar and Book Running Lead Managers

Book running lead managers:

Arihant Capital Markets Limited

Registrar for the IPO is KFin Technologies Limited

Business Model

The company earns its revenue through the following sources:

• Manufacturing TMT bars from iron billets manufactured through their reheating furnace and rolling mill.

• They also sell iron billets and binding wire incidental to their TMT bars business.

Company Growth Trajectory

In fiscal 2024, fiscal 2023 and fiscal 2022, the company sold 1,61,902MT, 1,51,795.00 MT and 88,410.00 MT of TMT Bars, respectively, and had revenue from operations of ₹872.95 crores, ₹882.01 crores and ₹493.72 crores in the same respective periods.

Their total income has grown at a CAGR of 32.98 % from ₹493.74 crores in fiscal 2022 to ₹873.16 crores in fiscal 2024. Their EBITDA has grown at a CAGR of 60.29% from ₹16.03 crores in fiscal 2022 to ₹41.20 crore in fiscal 2024. For fiscal 2024, fiscal 2023 and fiscal 2022, they have achieved a profit margin of 1.54%, 0.48% and 1.39%, respectively.

How To Check Allotment Status of VMS TMT Limited IPO?

You can check the allotment status of shares either on the website of the Bombay Stock Exchange (BSE) or on the website of the registrar KFin Technologies Limited. To check the status on the BSE website:

• Visit the BSE website
• Click on “Investor Services” and choose “Application Status Check”
• Choose the issue type — Equity or Debt (Equity in this case)
• Select the Issue Name from the drop-down. The issue name is the company’s name, which is VMS TMT Limited
• Enter your application number or PAN number
• Check the box which says “I’m not a Robot” and click on “Search” to know the allotment status

Follow these steps to know the allotment status on the registrar’s website:

• Visit the KFin Technologies Limited website
• Choose “Public Issues” from the “Investor Services” drop-down
• Select VMS TMT Limited from the drop-down
• Enter your PAN number or Application number
• Click on “Submit” to know the allotment status

To apply for this IPO:

• Step 1: Log in to your Kotak Securities Demat account: Log in to your Demat account to access IPO investments. Next, select the current IPO section
• Step 2: Specify IPO details: Enter the number of lots and the price you wish to apply for
• Step 3: Enter UPI ID: After entering your UPI ID, click submit. This will place your bid with the exchange
• Step 4: Mandate Notification: Your UPI app will receive a mandate notification to block funds
• Step 5: Approve Request: Your funds will be blocked once you approve the mandate request on your UPI