Avtar Steel Limited IPO

01At a glance

What the company does — melts stainless steel into blocks and blooms, and rolls and draws them into black and bright bars, wire rods, profiles and wire in over 150 grades, made to order (AP p.3).

Who pays it — manufacturers, including Bansal Wire Industries, Goodluck India, Stellaris Specialities, Vividh Wires and Goodluck Defense and Aerospace, which use the steel in automobiles, oil and gas, defence, aerospace and construction (AP p.3).

Why it is raising money — ₹2,000 million towards a Specialty Steel Melting Division and wire expansion, ₹2,000 million to repay borrowings, and the rest for general purposes (AP p.7).

How fast it has grown — revenue was flat at about ₹11,000 million in FY24 and FY25 and rose to ₹12,633 million in FY26, while profit nearly tripled from ₹204 million to ₹591 million (AP p.8).

The one thing to understand — profit growth has come from moving up the value chain inside the plant. A wire-rod and bar division started in January 2024; wire rods rose from 7.60% of revenue in FY24 to 20.04% in FY26, while semi-finished blooms fell from 41.83% to 29.66% (AP p.4, DRHP p.40).

02The business, in plain words

A stainless-steel long-products maker melts scrap and alloys into blooms, then rolls them into bars and wire rods that other factories turn into wire, fasteners and parts. The more of that chain a company does itself, the more of the final price it keeps — provided its plants run full.

A wire maker needs stainless wire rod in a special grade → it orders from Avtar Steel → Avtar melts and casts blooms, rolls them into rod in its Haryana plants, and ships them → it is paid per tonne.

The plants are in a single district in Haryana (DRHP p.28). The company reports one segment (AP p.3).

Earnings equation: Profit ≈ tonnes × (price − metal cost − conversion cost). EBITDA margin was 8.94% in FY26, our arithmetic (AP p.8).

03Where the money comes from

Source: AP p.4. The wires row is our arithmetic: the document's total less the other lines, ₹1,644.81 million in FY26.

The top ten suppliers provided 80.75% of FY26 purchases (DRHP p.50). The document says revenue depends on key customers without long-term contracts (DRHP p.35).

04The growth record

Source: AP p.8, AP p.9. Margins are our arithmetic.

05What the growth is made of

Mix, not volume of revenue. Revenue barely moved between FY24 and FY25, yet EBITDA rose 62%, as the new wire-rod division reached nearly a quarter of sales (AP p.4, AP p.8). In FY26, capacity utilisation was 74.82% in steel melting and 74.49% in hot rolling, but only 24.95% in the wire-rod and bar division (DRHP p.39). So there is room to grow the higher-value line without new plant.

06Earnings quality

Operating cash flow was negative in FY24 and FY25 and turned positive at ₹537.09 million in FY26 (AP p.9). Working capital needs are substantial (DRHP p.29). Contingent liabilities at March 2026 include ₹115.29 million of GST and ₹30.77 million of income-tax matters (DRHP p.90). The company has filed two adjudication applications with the Registrar of Companies on its own initiative, and some corporate records are not traceable (DRHP p.34, DRHP p.39).

07The balance sheet

Source: AP p.8, AP p.9.

Borrowings are 1.7 times net worth at March 2026, our arithmetic; ₹2,000 million of the proceeds would repay debt (AP p.7).

08What the money is for

Source: AP p.1, AP p.7.

The new division would make alloy, carbon and valve steel as well as stainless blocks and blooms (AP p.7). The ₹2,000 million is described as part-financing (AP p.7). A pre-IPO placement of up to ₹1,170 million may reduce the fresh issue (AP p.7).

09Who is selling

Source: AP p.1.

10Promoters

The promoters are Sumit Jindal, chairman and managing director, with the company since 2007, and Ayushi Jindal, whole-time director and a company secretary by training (AP p.6, AP p.7). Sumit Jindal is also sole proprietor of Ayushivansh Inox and Alloys (AP p.6).

11Who already owns it

Source: AP p.8.

The Jindal family holds essentially all 51,402,743 shares (AP p.8).

12What changed just before the IPO

• Wire-rod division — commissioned in January 2024 (DRHP p.40).
• Share capital — rose from ₹23.22 million to ₹73.43 million in FY25 (AP p.8).
• Cash flow — turned positive in FY26 (AP p.9).

13Capacity and expansion

Source: DRHP p.39.

The proceeds part-fund a specialty-steel melting unit and wire expansion at the existing site (AP p.7). The document lists under-use of capacity and delays in expansion among its risks (DRHP p.32, DRHP p.39).

14Market size and industry structure

The CARE report cited in the offer document forecasts India's stainless-steel market to grow about 8.2% a year from FY26 to FY30, to about ₹1,704 billion (AP p.6). That forecast is CARE's, and newboard has not tested it.

15Competitive position

What the document claims, and what it rests on:

• Special grades — over 150, made to order (AP p.3).
• Integration from melting to wire rod and wire (AP p.3).
• Named industrial customers in wire, defence and aerospace (AP p.3).

Against that: one location, and competition from other stainless-steel makers (DRHP p.28, DRHP p.31).

16Peers the company named

The document names listed steel peers with P/E ratios from 3.38 to 150.21, average 51.38 (DRHP p.169). For Avtar Steel it gives FY26 earnings per share of ₹11.49, net asset value per share of ₹37.85 and return on net worth of 30.35% (AP p.8, AP p.9). No P/E is possible for the company until a price band is set.

17Risks, in plain words

• One district. All plants are in one district of Haryana (DRHP p.28).
• Raw-material costs. Stainless scrap, nickel and ferro-alloy prices move sharply (DRHP p.30).
• Suppliers. Ten suppliers provide over 80% of purchases (DRHP p.50).
• Working capital. Large needs, funded by borrowing (DRHP p.29).
• Expansion. A new melting division carries construction and demand risk (DRHP p.32).
• Records. Untraceable corporate records and two pending adjudication applications with the Registrar (DRHP p.34, DRHP p.39).

18Litigation and regulatory matters

The litigation summary was not read in detail for this study. The company has filed two adjudication applications with the Registrar of Companies on its own initiative (DRHP p.39).

19Related-party transactions

Sumit Jindal is sole proprietor of Ayushivansh Inox and Alloys (AP p.6). The related-party schedule was not read in detail for this study (DRHP p.54).

20What the offer document does not say

In the sections read for this study, the document does not give:

• Tonnes sold and price per tonne, in the pages read.
• Total cost of the Specialty Steel Melting Division, beyond the ₹2,000 million from the proceeds.
• Dealings with Ayushivansh Inox and Alloys, the promoter's proprietorship.
• Customer concentration figures, which were not read here.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. What is the total cost of the Specialty Steel Melting Division, and how will the rest be funded?
2. Why is the wire-rod division running at 25% utilisation two years after start-up?
3. Does the company trade with Ayushivansh Inox and Alloys, and on what terms?
4. What share of revenue comes from the top ten customers?
5. How much of the margin gain is from product mix and how much from metal prices?

2Sources and cited facts

This study was read from 2 documents the company filed. The 36 figures it cites are listed under the document each came from, with the page and the sentence as printed.