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Key Points

VMS TMT has reported a significant drop in profitability ahead of its public offering. The company's net profit fell by 17.5% while revenue declined marginally by 1% in FY24. Their upcoming IPO consists entirely of a fresh issue of 1.5 crore shares launching September 17. The steel manufacturer plans to use most proceeds to reduce its ₹261.7 crore debt burden.

Key Points: VMS TMT Net Profit Falls 17% in FY24 Ahead of IPO Launch

  • Net profit declined 17.5% to ₹11.11 crore in FY24
  • Revenue slipped 1% to ₹872.95 crore from previous year
  • IPO set to launch on September 17 with fresh issue of 1.5 crore shares
  • Plans to use ₹115 crore from IPO proceeds to repay borrowings
2 min read

VMS TMT's net profit falls 17 pc in FY24, revenue slips, shows DRHP

VMS TMT reports 17.5% drop in net profit to ₹11.11 crore in FY24 as revenue slips 1%. The Gujarat-based steel maker files DRHP for its upcoming ₹115 crore IPO.

"The company posted Rs 872.95 crore in revenue, down 1 per cent from Rs 882.01 crore a year earlier. - DRHP Filing"

Mumbai, Sep 12

Gujarat-based Steel bars manufacturer VMS TMT Limited has reported a sharp fall in its net profit for the financial year ended March 31, 2024, as the company’s profit dropped 17.5 per cent to Rs 11.11 crore compared to Rs 13.46 crore in the previous year, as per its latest financial disclosures.

According to its red herring prospectus (RHP), the company posted Rs 872.95 crore in revenue, down 1 per cent from Rs 882.01 crore a year earlier. Total income too fell by 1 per cent to Rs 873.16 crore against Rs 882.05 crore in the previous financial year.

VMS TMT, which makes thermo mechanically treated (TMT) steel bars under the Kamdhenu brand, has filed its RHP with the Registrar of Companies and is set to launch its IPO on September 17.

The offering will consist entirely of a fresh issue of 1.5 crore equity shares, with all proceeds going directly to the company.

The IPO anchor book for institutional investors will open on September 16, and the issue will close for subscription on September 19.

The company plans to use Rs 115 crore from the IPO proceeds to repay borrowings, while the rest will be set aside for general corporate purposes.

As of June, its total borrowings stood at Rs 261.7 crore. The issue structure reserves 50 per cent of shares for retail investors, 30 per cent for qualified institutional buyers and the remaining 20 per cent for non-institutional investors.

VMS TMT operates primarily in Gujarat, manufacturing TMT bars from scrap and billets at its Bhayla Village plant in Ahmedabad, which has an installed capacity of two lakh metric tonnes per year.

The company’s IPO allotment will be finalised by September 22, with a planned listing on the stock exchanges on September 24.

The company had earlier filed draft IPO papers with SEBI on March 27, which were cleared on July 21. Arihant Capital Markets is acting as the sole book-running lead manager for the issue.

- IANS

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Reader Comments

P
Priya S
ipo timing seems suspicious when profits are falling. retail investors should be careful - company wants to repay debt through public money rather than improving operations first
M
Michael C
Kamdhenu is a decent brand in western India. The 2 lakh metric tonne capacity is good, but they need to expand beyond Gujarat to grow revenue. Regional concentration is risky.
A
Ananya R
Construction sector has been tough this year with rising input costs. Actually only 1% revenue drop isn't bad considering market conditions. Profit margin compression is the real concern.
S
Suresh O
Using IPO money to repay ₹115cr debt while having ₹261cr total borrowing? That's just partial relief. Need to see their growth strategy post-IPO. Not convinced yet.
K
Kavya N
TMT bars market is very competitive with big players like JSW and Tata. Small regional players need strong differentiation. Hope they have a solid plan beyond debt repayment.

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