Bssponge Limited IPO

01At a glance

What the company does: makes steel and steel products at a single 47.19 hectare plant at Taraimal, Raigarh, Chhattisgarh, from sponge iron through billets and slabs to TMT bars, HR coils, wire rods, ERW pipes and tubes and ferro alloys, with a 67 MW captive power plant (DRHP p.25, AP p.4).

Who pays it: more than 1,000 customers in FY26, including steel makers, re-rollers, pipe makers, fabricators and other industrial customers, reached through direct institutional sales and traders, distributors and dealers; no single customer was more than 4.12% of FY26 revenue (DRHP p.227, AP p.4). The document does not name its customers.

Why it is raising money: ₹650.0 crore of the fresh issue is to repay or prepay borrowings, and the rest goes to general corporate purposes capped at 25% of the gross proceeds (DRHP p.109). The ₹200.0 crore offer for sale goes to three promoter family sellers, not the company (DRHP p.3, DRHP p.108).

How fast it has grown: revenue from ₹1,494.4 crore in FY24 to ₹2,592.5 crore in FY26, about 31.7% a year, and profit after tax from ₹143.9 crore to ₹171.1 crore, about 9.0% a year (our arithmetic, DRHP p.77).

The one thing to understand: revenue grew much faster than profit. Operating EBITDA margin fell from 19.08% in FY24 to 14.39% in FY26 and PAT margin from 9.63% to 6.60%, while raw materials went from 68.41% to 73.67% of revenue (DRHP p.122, DRHP p.26). The promoters and promoter group own 100% of the company today (DRHP p.56).

02The business, in plain words

Steel can be made by melting scrap or sponge iron in an electric furnace. Sponge iron is iron ore with the oxygen taken out, done in coal-fired rotary kilns (DRHP p.158). This company makes sponge iron and either sells it or melts it into billets and slabs, which it rolls into TMT bars, wire rods and HR coils; some HR coils are then formed into ERW pipes and tubes. It also makes ferro alloys, mainly silico manganese, used in steel making (AP p.4, DRHP p.225).

A steel maker, re-roller, pipe maker or fabricator places a purchase order → the company turns iron ore, pellets and coal into sponge iron in its kilns, melts it into billets and slabs, and rolls them into finished products at the same site → the product is sent by road or rail → the company is paid per tonne, generally within 7 to 15 days where credit is given.

Source for the chain: DRHP p.35, DRHP p.45, DRHP p.252. Sales are made on purchase orders with no long-term customer contracts (DRHP p.35).

The plant runs twelve rotary kilns, six of 100 tonnes a day and six of 250 tonnes a day, and installed capacity across products was 1,627,500 tonnes a year at March 31, 2026 (DRHP p.224, DRHP p.33).

Heat from the kilns runs a 48 MW waste heat power unit, and dolochar, a kiln by-product, fuels two more units of 4 MW and 15 MW; captive power met 96.01% of the plant's power need in FY26 (DRHP p.34, DRHP p.35).

The company began with one 30,000 tonne kiln in 2005 and added billets and TMT bars in 2019, HR coils in 2022, ferro alloys in 2023, ERW pipes in 2024 and wire rods in 2026 (DRHP p.271).

Sponge iron, billets, HR coils and ferro alloys are sold or used in house; TMT bars, wire rods and ERW pipes are all sold (DRHP p.230). The brand is "BS TMX" (DRHP p.40). All sales are in India, across 20 states and three union territories in FY26 (DRHP p.28).

Earnings equation: Revenue = tonnes sold of each product × price per tonne. In FY26 the company sold 455,617 tonnes of sponge iron, 105,820 tonnes of HR coils, 76,788 tonnes of TMT bars, 62,932 tonnes of billets and slabs, 41,589 tonnes of ERW pipes, 33,514 tonnes of ferro alloys and 11,579 tonnes of wire rods (DRHP p.122). It does not print prices per tonne.

03Where the money comes from

Source: DRHP p.30, AP p.5; the crore figures and the combined last row are our arithmetic. Sponge iron and HR coils together were 71.96% of FY24 revenue and 58.73% of FY26 (DRHP p.30). The company reports one segment, iron and steel products, all in India (AP p.4).

By region, the central states (Chhattisgarh, Madhya Pradesh and Uttar Pradesh) were 81.16% of FY24 revenue and 74.87% of FY26 (DRHP p.29). Chhattisgarh alone was 72.57% in FY24 and 56.24% in FY26, ₹1,458.1 crore (DRHP p.29).

Source: DRHP p.36. Revenue does not depend on a few customers: the ten largest were 17.32% of FY26 revenue. It depends more on a region, Chhattisgarh, and on two products. On the supply side the concentration is higher: the top ten suppliers were 78.92% of FY24 raw material purchases and 68.91% of FY26, and the largest 12.37% in FY26 (DRHP p.27). FY26's top ten included a "Maharatna" PSU, MSP Steel & Power Limited, JSAR Steel Corporation, Shyam Metalics and Energy Limited and a "Navratna" PSU (DRHP p.28).

04The growth record

Source: DRHP p.122, AP p.9, AP p.10; crore conversions are our arithmetic.

Our arithmetic over FY24 to FY26: revenue grew about 31.7% a year (our arithmetic, DRHP p.77), operating EBITDA about 14.4% a year (our arithmetic, DRHP p.122) and profit after tax about 9.0% a year (our arithmetic, DRHP p.77). The document itself gives 31.71% and 9.03% (DRHP p.54). Operating EBITDA margin went from 19.1% to 14.4%, down 469 basis points, and PAT margin from 9.63% to 6.60%, down 303 basis points (DRHP p.122).

In rupees, revenue went from ₹1,494.4 cr to ₹2,592.5 cr and PAT from ₹143.9 cr to ₹171.1 cr (DRHP p.77). Year on year, revenue grew 46.40% in FY25 and 18.50% in FY26 (DRHP p.122). Profit grew 8.00% in FY26 (DRHP p.397) and about 10.1% in FY25 (our arithmetic, DRHP p.77).

Operating cash flow FY26 was ₹144.1 cr, down from ₹300.9 crore in FY25, mainly because inventories rose ₹122.5 crore in the year (DRHP p.78). Over the three years PAT was ₹473.5 crore and operating cash flow ₹627.5 crore (our arithmetic, DRHP p.77, DRHP p.78). Other income was ₹13.5 crore, 5.8% of FY26 profit before tax of ₹231.9 crore (our arithmetic, DRHP p.77).

Net debt to operating EBITDA was 1.80 times in FY26, 1.8×, and debt to equity 0.97 times, 1.0× (DRHP p.122). Return on capital employed FY26 was 22.9% (DRHP p.122). Net working capital was 37 days of revenue in FY26 (DRHP p.42). Related-party transactions were ₹142.7 cr in FY26, 5.51% of revenue (DRHP p.55). Contingent liabilities were ₹11.0 cr at March 2026 (DRHP p.79). Borrowings stood at ₹859.5 cr at July 31, 2026 (DRHP p.407).

The year end is March 31 throughout (DRHP p.25). Net worth as defined excludes a revaluation reserve: total equity was ₹797.5 crore at March 2026 against net worth of ₹714.8 crore, and FY26 other comprehensive income includes a ₹9.5 crore fair valuation of an item of property, plant and equipment (DRHP p.76, DRHP p.77, AP p.9).

05What the growth is made of

Revenue rose ₹1,098.1 crore from FY24 to FY26 (our arithmetic, DRHP p.30). By product, sponge iron added ₹606.3 crore, ferro alloys ₹225.3 crore, ERW pipes ₹182.1 crore, billets and slabs ₹108.4 crore, TMT bars ₹61.0 crore, wire rods ₹51.7 crore and others ₹22.3 crore, while HR coils fell ₹159.0 crore (our arithmetic, DRHP p.30).

Volume did the work. Sponge iron sold went from 168,890 tonnes to 455,617 tonnes, ferro alloys from 1,602 to 33,514 tonnes and ERW pipes from nil to 41,589 tonnes (DRHP p.122).

Revenue per tonne, our arithmetic on the document's revenue and sales volumes, fell for the main products: sponge iron from about ₹27,841 to ₹23,628, HR coils from about ₹46,288 to ₹42,151 and TMT bars from about ₹45,163 to ₹41,921 (our arithmetic, DRHP p.30, DRHP p.122).

At FY24's sponge iron revenue per tonne, FY26's extra volume alone would have added about ₹798.3 crore, against the ₹606.3 crore actually added; the difference is lower price per tonne (our arithmetic, DRHP p.30, DRHP p.122).

New capacity sits behind the volume: sponge iron capacity went from 510,000 to 675,000 tonnes a year, billets and slabs from 219,000 to 367,500, and ERW pipes and wire rods were added (DRHP p.33). HR coil revenue fell because more HR coil went into pipes from December 2024, and billets went into wire rods from FY26 (DRHP p.31). The document does not give per-tonne prices or a price and volume split of its own, so the per-tonne figures above are arithmetic, not disclosures. The industry report the company commissioned puts the sponge iron price at ₹30,163 a tonne in FY24 and ₹27,525 in FY26 (DRHP p.160).

06Earnings quality

The item that needs explaining is margin. Cost of materials consumed went from 68.41% of revenue in FY24 to 74.03% in FY25 and 73.67% in FY26 (DRHP p.26). Iron ore pellets alone went from 19.41% to 26.86% of revenue (DRHP p.26). Depreciation rose from ₹61.4 crore to ₹92.8 crore and finance costs from ₹43.1 crore to ₹61.9 crore as new capacity came on (DRHP p.77). Tax took 21.1% of FY24 profit before tax and 26.2% of FY26, after a deferred tax credit in FY24 (our arithmetic, DRHP p.77).

FY26 other income of ₹13.5 crore includes a ₹2.8 crore gain on redeeming preference shares and ₹1.5 crore of unrealised investment gains, and interest of ₹1.0 crore earned on advances to Nachiketa Gift-Ads Private Limited, a promoter (DRHP p.395, DRHP p.358). Bad debts written off were ₹0.05 crore in FY26 (DRHP p.45). Of Ashish Agarwal's ₹12.0 crore FY26 pay, ₹2.4 crore was capitalised into qualifying assets rather than expensed (DRHP p.359); this is why the MD&A shows director remuneration of ₹21.7 crore for FY26 (DRHP p.396).

07The balance sheet

At March 31, 2026 total assets were ₹1,785.7 crore: property, plant and equipment ₹959.8 crore, capital work in progress ₹151.3 crore, inventories ₹353.9 crore, trade receivables ₹64.4 crore, other current assets ₹135.4 crore and other financial assets, current and non-current, ₹104.5 crore (our arithmetic, DRHP p.76); cash and cash equivalents were ₹0.3 crore and other bank balances ₹3.1 crore (DRHP p.76). Against that: borrowings of ₹483.5 crore non-current and ₹287.5 crore current, trade payables ₹78.5 crore, lease liabilities ₹2.2 crore and total equity ₹797.5 crore (DRHP p.76).

By July 31, 2026, borrowings were ₹859.5 crore: term loans ₹531.8 crore, working capital loans ₹212.4 crore, vehicle loans ₹6.0 crore, unsecured loans ₹22.9 crore and non-fund based facilities ₹86.5 crore (DRHP p.41). Lenders are HDFC Bank, Indian Bank, Axis Bank and State Bank of India, and the loans carry personal guarantees of Parmanand Agarwal and Ashish Agarwal (DRHP p.407). Unsecured loans from promoters and the promoter group were ₹23.4 crore at March 2026 (DRHP p.56). Contingent liabilities were ₹11.0 crore, of which bank guarantees to coal suppliers ₹6.1 crore and a ₹4.3 crore recovery suit (DRHP p.79). Capital commitments were ₹11.6 crore (DRHP p.353).

After the issue, as far as the arithmetic goes: ₹650.0 crore is to repay borrowings, 75.62% of the ₹859.5 crore outstanding at July 31, 2026, which would leave about ₹209.5 crore if nothing else changed (DRHP p.110, our arithmetic). The loans identified for repayment total ₹744.1 crore outstanding, so the company will choose among them (DRHP p.114). Net worth would rise by the fresh issue less expenses, but expenses are blank, so the post-issue figure cannot be stated (DRHP p.108).

08What the money is for

Source: DRHP p.109; the percentage is our arithmetic on the ₹800.0 crore gross fresh issue. The whole ₹650.0 crore is to be deployed in FY27 (DRHP p.109). The candidate loans are term loans and working capital lines from HDFC Bank, State Bank of India, Axis Bank and Indian Bank at 7.25% to 9.15% a year, taken for kilns, induction furnaces, rolling mills, the pipe mill and the captive power plant (DRHP p.112 to DRHP p.114).

The company says the repayment will reduce debt and interest outflow (DRHP p.110). The objects have not been appraised by a bank (DRHP p.51). None of the fresh issue is earmarked for the planned brownfield expansion or the Nawapara greenfield plant, whose cost and funding are not yet finalised (DRHP p.34).

The company may place up to ₹160.0 crore of shares before the red herring prospectus, which would reduce the fresh issue (DRHP p.73).

Into the business up to ₹800.0 crore, the fresh issue, before expenses (DRHP p.3). To selling shareholders up to ₹200.0 crore, the offer for sale, by three promoter family sellers (DRHP p.3).

09Who is selling

Source: DRHP p.91 for the amounts and classification, DRHP p.99 for holdings, DRHP p.104 for average cost per ₹10 share. The fresh issue is ₹800.0 cr and the offer for sale ₹200.0 cr by 3 selling shareholders (DRHP p.3). By seller: Parmanand Agarwal ₹70.0 cr, Ashish Agarwal ₹60.0 cr and Sulochana Agarwal ₹70.0 cr (DRHP p.3). The promoters offer ₹130.0 crore, 65% of the offer for sale (our arithmetic, DRHP p.91).

The number of shares each sells will be fixed with the price (DRHP p.91). The document states the relationships: Sulochana Agarwal is the spouse of Parmanand Agarwal and Ashish Agarwal is the son of Parmanand Agarwal (DRHP p.298). The low average costs follow from shares bought at ₹10 long ago and a 44:1 bonus in September 2026 (DRHP p.94, DRHP p.100).

10Promoters

The promoters are Parmanand Agarwal, Ashish Agarwal, Richhi Agarwal, Bijay Kumar Agarwal and Nachiketa Gift-Ads Private Limited (DRHP p.295). Together they hold 88.45% before the issue, and 100% with the promoter group (DRHP p.99, DRHP p.56).

• Parmanand Agarwal, aged 80, Chairman and non-executive director, on the board since incorporation, with over 49 years in mining, construction, steel and power (AP p.7).
• Ashish Agarwal, aged 44, Managing Director, on the board since 2004, with over 22 years in steel and power (AP p.7).
• Richhi Agarwal, aged 40, whole-time director, on the board since 2026, overseeing management, administration, CSR and marketing (AP p.7).
• Bijay Kumar Agarwal, aged 60, whole-time director, first appointed in 2011, handling government relations and legal liaison, and holding no shares (AP p.7, DRHP p.102).
• Nachiketa Gift-Ads Private Limited, incorporated in 1995 for investment, financing and commodity trading, owned 33.50% by Parmanand Agarwal, 50.67% by Ashish Agarwal and 15.84% by Sulochana Agarwal (DRHP p.296, DRHP p.297).

The document states that Richhi Agarwal is the wife of Ashish Agarwal and daughter-in-law of Parmanand Agarwal, and that Bijay Kumar Agarwal is Parmanand Agarwal's brother-in-law (DRHP p.278).

Pay: in FY26 Ashish Agarwal and Parmanand Agarwal were each paid ₹12.0 crore, Richhi Agarwal ₹1.3 crore as an employee and Bijay Kumar Agarwal ₹0.1 crore (DRHP p.280). In FY24 the first two were paid ₹6.0 crore each (DRHP p.80). Promoter remuneration FY24 to FY26 was ₹12.7 cr → ₹25.4 cr across the four individuals (our arithmetic, DRHP p.80). From September 12, 2026 the terms are up to ₹12.0 crore a year for Ashish Agarwal, up to ₹10.0 crore for Richhi Agarwal, a ₹1.8 crore commission for Parmanand Agarwal as non-executive chairman and up to ₹0.1 crore for Bijay Kumar Agarwal (DRHP p.278, DRHP p.279).

Other businesses and deals with the company: Parmanand Agarwal and Ashish Agarwal are directors of Nachiketa and designated partners of Florance Engineering Enterprises LLP and Zortea Logistics LLP (AP p.7). In November 2025 the company bought two land parcels of 34.72 hectares at Gharghoda from Nachiketa for ₹11.0 crore, for the Nawapara plant, and it has a June 2025 letter of intent to acquire a Raipur property from Florance for a corporate office (DRHP p.55, DRHP p.81). Zortea supplied ₹57.6 crore of raw materials in FY26 (DRHP p.80). Nachiketa received ₹8.4 crore on the redemption of preference shares in FY26 (DRHP p.358). The company has no group companies (AP p.15).

Pledges, guarantees and cases: no promoter share is pledged (DRHP p.102). Unsecured loans from promoters and promoter group were ₹23.4 cr at March 2026 (DRHP p.56). Parmanand Agarwal and Ashish Agarwal personally guarantee the company's loans (DRHP p.407). There is no criminal, regulatory or material civil case against the promoters (DRHP p.410). Cases against promoters: none; the promoters have two direct tax matters of ₹0.03 crore, and Nachiketa is contesting a ₹14.7 crore land acquisition award for its own land (DRHP p.49, DRHP p.410, DRHP p.411). There has been no SEBI or stock exchange action against them (DRHP p.411).

Promoter economics: Parmanand Agarwal took shares at ₹10 at incorporation in 2000 and in 2002, and bought more at ₹10 in 2006 and 2007 (DRHP p.92, DRHP p.100). Ashish Agarwal bought shares at ₹10 in 2006 and 2007 (DRHP p.100). A 3:1 bonus followed in March 2009, and in June 2017 Sulochana Agarwal transferred 650,000 shares to Parmanand Agarwal and 1,200,000 to Ashish Agarwal at ₹10 (DRHP p.92, DRHP p.95).

Nachiketa subscribed at ₹200 and ₹250 in 2009 and ₹100 in 2014, and received further shares through amalgamations of shareholder companies in 2018 and 2023 (DRHP p.101, DRHP p.102). In August 2026 Parmanand Agarwal gifted shares to Richhi Agarwal and to Avyakt Agarwal and Kaivalya Agarwal, and on September 17, 2026 a 44:1 bonus took the share count from 4,694,210 to 211,239,450 (DRHP p.100, DRHP p.94).

Average cost per share is ₹0.15 for Parmanand Agarwal, ₹0.17 for Ashish Agarwal, ₹2.46 for Nachiketa and nil for Richhi Agarwal (DRHP p.104).

11Who already owns it

Source: DRHP p.99; the second-last row is our arithmetic on three holdings. The company has eight shareholders, all promoters or promoter group; there are no other public shareholders, no fund or institutional investor and no employee stock options (DRHP p.98, DRHP p.99, DRHP p.96). Bijay Kumar Agarwal holds no shares (DRHP p.99). The same five names held 1% or more two years ago in nearly the same proportions (DRHP p.99).

When they came in: the last allotment for cash was on March 31, 2014, 956,400 shares at ₹100 to Nachiketa and other companies (DRHP p.93). No shares were acquired for a price in the last 18 months; the weighted average cost of all shares acquired in the last three years is ₹0.30, in a range of nil to ₹10 (DRHP p.104). The holding after the issue cannot be computed until the price fixes the number of shares; the promoters and promoter group will keep a majority (DRHP p.56).

12What changed just before the IPO

• Revenue and profit: revenue went from ₹1,494.4 cr → ₹2,592.5 cr and profit after tax from ₹143.9 cr → ₹171.1 cr over FY24 to FY26 (DRHP p.77).
• Margins fell: operating EBITDA margin from 19.08% to 14.39% and PAT margin from 9.63% to 6.60% (DRHP p.122).
• New products: ferro alloys began in FY24, ERW pipes in December 2024 and wire rods in February 2026 (DRHP p.397, DRHP p.31, DRHP p.237).
• Capacity added: sponge iron to 675,000 tonnes in 2024, billets and slabs to 367,500 tonnes in 2025, captive power to 67 MW in 2026 (DRHP p.271).
• Less dependence on one state and on a few customers: Chhattisgarh fell from 72.57% to 56.24% of revenue (DRHP p.29). The largest customer was 4.12% of FY26 revenue, the top five 10.88% and the top ten 17.32% (DRHP p.36). The top ten suppliers were 68.91% of FY26 raw material purchases (DRHP p.27).
• Receivable days went from 6 → 8 over FY24 to FY26 (DRHP p.42).
• Promoter pay doubled: promoter remuneration went from ₹12.7 cr → ₹25.4 cr (our arithmetic, DRHP p.80), and new terms from September 2026 allow up to ₹10.0 crore a year for Richhi Agarwal against ₹1.3 crore paid in FY26 (DRHP p.279, DRHP p.280).
• Related-party dealings grew from ₹24.6 crore in FY24 to ₹142.7 crore in FY26, mainly raw material purchases from Zortea Logistics LLP, CSR spending and land bought from Nachiketa (DRHP p.55).
• Land from a promoter: 34.72 hectares bought from Nachiketa on November 18, 2025 for the Nawapara plant (DRHP p.55, DRHP p.81).
• Preference shares redeemed in FY26, with ₹8.4 crore paid to Nachiketa (DRHP p.358, DRHP p.395).
• Borrowings rose from ₹771.0 crore at March 2026 to ₹859.5 cr at July 31, 2026 (AP p.10, DRHP p.407).
• Credit rating from CRISIL went from A- in FY24 to A+ at filing (DRHP p.46).
• Gifts of shares from Parmanand Agarwal to Richhi Agarwal on August 25, 2026 and to Avyakt Agarwal and Kaivalya Agarwal on August 31, 2026 (DRHP p.100).
• A 44:1 bonus was allotted on September 17, 2026 (DRHP p.94). An earlier 3:1 bonus dates from March 2009 (DRHP p.92).
• Last allotment for cash: ₹100 a share, March 31, 2014 (DRHP p.93).
• The company became public: converted by a resolution of September 1, 2026, with a fresh certificate dated September 9, 2026 (DRHP p.3).
• Board reshaped for listing: four independent directors joined from FY27, Parmanand Agarwal became non-executive chairman and Richhi Agarwal a whole-time director (DRHP p.280).
• Office shared with promoter entities: rent agreements dated September 1, 2026 let Nachiketa, Zortea, Florance and B S Foundation use the registered office (DRHP p.56).
• A compliance clean-up: on September 26, 2026 the company applied for adjudication of not having a whole-time company secretary from June 2014 to March 2019 (DRHP p.49).
• The statutory auditor did not change: none in the last three years; ARSK & Associates is the auditor (DRHP p.86).

13Capacity and expansion

Source: DRHP p.251, DRHP p.236; utilisation is on available capacity and is certified by an independent chartered engineer (DRHP p.33). Captive power is to go from 67 MW to 85 MW (DRHP p.236). Wire rods ran only part of FY26, so 62.15% is on 19,438 tonnes of available capacity (DRHP p.33).

Production of sponge iron, billets and slabs and ferro alloys exceeded the capacities permitted under the plant's pollution consents in each of FY24, FY25 and FY26, and applications to raise the permitted levels are pending (DRHP p.39). The brownfield additions depend on consents still to come (DRHP p.236).

The Nawapara plant, on 44.78 hectares near the existing site, is permitted under its terms of reference to reach up to 858,000 tonnes of sponge iron, 792,000 tonnes of billets and slabs, 160,000 tonnes of ferro alloys and 200 MW of power, built in phases; it has no environmental clearance yet and its cost and funding are not finalised (DRHP p.34). The issue does not fund it (DRHP p.109). The document does not tie any capacity to a revenue figure.

14Market size and industry structure

As claimed: the industry report is by CRISIL Intelligence, "Steel intermediaries and Steel products", September 2026, commissioned and paid for by the company for the offer (DRHP p.25). It puts India's finished steel demand at 159.8 million tonnes in 2025, about 9.3% of world demand, and Indian crude steel production at 164.9 million tonnes in CY25 (AP p.7). It puts sponge iron capacity at 72.00 million tonnes and production at 60.30 million tonnes in FY26 (DRHP p.158).

The part that is addressable: sponge iron, billets, long products, HR coils, pipes and manganese ferro alloys sold in India, mostly in the central states. The document does not size this combined market.

What the company is today: its 675,000 tonnes of sponge iron capacity is about 0.9% of the industry's 72.00 million tonnes, and its FY26 production of 729,918 tonnes about 1.2% of industry output (our arithmetic, DRHP p.33, DRHP p.158).

On structure, the company-commissioned report calls the sponge iron industry fragmented and the ferro alloys industry highly fragmented (DRHP p.158, DRHP p.199). Sponge iron goes into induction and electric arc furnaces as a substitute for scrap, so its demand follows secondary steel making (DRHP p.158). Steel is cyclical and exposed to import duties and cheaper imports (DRHP p.31). Raw materials (iron ore, pellets, coal, manganese ore) are bought from PSUs and private suppliers within about 300 km, and the company holds coal supply agreements for 404,500 tonnes a year plus letters of intent for 466,000 tonnes more (DRHP p.27, DRHP p.237).

15Competitive position

Source: DRHP p.121 for the figures, DRHP p.208 for the overlaps; PAT margin is our arithmetic on total income. Peers are consolidated and the company standalone. The peer net debt to operating EBITDA in FY26 ranges from 0.06 to 1.05 times, against 1.80 for the company (DRHP p.213).

What the company puts forward: one integrated site from iron ore to finished products, captive power meeting 96.01% of need with external power at 0.73% of revenue, proximity to coal and ore, and a record of adding capacity (DRHP p.119, DRHP p.253). Against that: one plant in one state, no long-term customer contracts, raw materials at 73.67% of revenue, and higher leverage than the named peers (DRHP p.25, DRHP p.35, DRHP p.26, DRHP p.213).

16Peers the company named

Peers named in the offer document: Shyam Metalics and Energy Limited, Gallant Ispat Limited, Jai Balaji Industries Limited and Sambhv Steel Tubes Limited (DRHP p.121).

The peer table spells the second name "Gallant Ispat Limited" while the risk factors and industry section write "Gallantt Ispat Limited" (DRHP p.121, DRHP p.31). Shyam Metalics' total income is about 7.2 times the company's; Sambhv Steel Tubes is about the same size (our arithmetic, DRHP p.121).

Shyam Metalics also runs stainless steel and aluminium, Jai Balaji ductile iron pipes and Sambhv galvanised and stainless products, which the company does not make (DRHP p.208, DRHP p.212). The document prints peer P/E ratios on September 29, 2026 prices of 28.29 for Shyam Metalics, 26.86 for Gallantt, 44.61 for Jai Balaji and 32.13 for Sambhv, an average of 32.97 (DRHP p.120, DRHP p.121).

The company's FY26 basic EPS is ₹8.10 on the post-bonus share count (DRHP p.119). With no price band, no P/E for the company can be stated.

17Risks, in plain words

One plant, one state: all manufacturing is at the Raigarh plant and its corporate office is in Chhattisgarh (DRHP p.25) → a shutdown, local unrest or a state policy change hits the whole business → Chhattisgarh was also 56.24% of FY26 revenue (DRHP p.29).

Raw material costs: materials were 73.67% of FY26 revenue, against 68.41% in FY24 (DRHP p.26) → the company says it may not pass cost increases on (DRHP p.27) → operating EBITDA margin fell 469 basis points over the period (DRHP p.122).

Suppliers: the top ten suppliers were 68.91% of FY26 purchases and most raw material is bought without long-term contracts (DRHP p.27, DRHP p.28) → coal supply under agreements covers 404,500 tonnes a year, with 466,000 tonnes more only under letters of intent (DRHP p.27).

Two products: sponge iron and HR coils were 58.73% of FY26 revenue (DRHP p.30) → sponge iron is an intermediate product sold to furnace operators and its price per tonne fell over the period (DRHP p.30, DRHP p.160).

Regulation: output of sponge iron, billets and ferro alloys exceeded permitted capacity in all three years (DRHP p.39) → this may be treated as non-compliance with consent conditions → sponge iron ran at 108.14% and ferro alloys at 111.88% of capacity in FY26 (DRHP p.33).

Safety: there were one, two and one fatal accidents at the plant in FY26, FY25 and FY24 (DRHP p.38) → hot metal, kilns and furnaces are hazardous → any accident can halt operations or bring liability.

Expansion: brownfield additions and the Nawapara plant need approvals still pending, and Nawapara's cost and funding are not finalised (DRHP p.34) → capital expenditure was ₹203.9 crore, ₹272.0 crore and ₹234.6 crore in FY26, FY25 and FY24 (DRHP p.34) → more borrowing may follow the repayment from the issue.

Promoter dealings: related-party transactions rose to ₹142.7 crore in FY26, including land bought from Nachiketa and purchases from Zortea (DRHP p.55) → the promoters' pay terms were raised in September 2026 (DRHP p.279).

Issue-specific: all three sellers are promoter family members with an average cost of nil to ₹0.17 a share (DRHP p.104); general corporate purposes and expenses are blank; a pre-IPO placement of up to ₹160.0 crore may be made (DRHP p.73).

18Litigation and regulatory matters

Criminal: no criminal case against the company, promoters, directors, key managerial personnel or senior management (DRHP p.409, DRHP p.411). Regulatory: no action by a regulator against the company, promoters or directors; the company has a pending adjudication application on the company secretary lapse (DRHP p.410, DRHP p.411). Civil: no material civil case against the company or promoters (DRHP p.410). Smaller claims sit in contingent liabilities: a ₹0.02 crore freight claim and a ₹0.14 crore employee compensation claim (DRHP p.53). The company also cannot trace certain old RoC filings, including some Form 32s and a cost auditor form for FY22 (DRHP p.50).

19Related-party transactions

Source: DRHP p.80, DRHP p.81, DRHP p.55; the first row is our arithmetic on two rows. Loans payable to Parmanand Agarwal were ₹171.75 million, to Ashish Agarwal ₹39.12 million and to Florance Engineering Enterprises LLP ₹22.99 million at March 2026 (DRHP p.357, DRHP p.358). The company had ₹212.38 million of advances to Zortea as a supplier at March 2025 (DRHP p.358). Panache Solutions supplied ₹24.27 million of stores and spares in FY26 (DRHP p.359).

What appeared in the two years before filing: raw material purchases from Zortea, from FY25; the advance against pre-emptive rights to Nachiketa property, from FY25, with ₹139.43 million received back in FY26; the land purchase from Nachiketa and ₹84.44 million paid to Nachiketa on preference share redemption, in FY26; capital advances of ₹22.42 million to Florance in FY26; purchases from Panache Solutions in FY26; and rent agreements with promoter entities for the registered office on September 1, 2026 (DRHP p.358, DRHP p.359, DRHP p.56).

20What the offer document does not say

No customer is named, and only some suppliers are. Prices per tonne by product are not given, so the volume and price split in section 04 is arithmetic. Commissioning dates for the brownfield additions are not given, and the Nawapara plant has no cost or funding plan yet. The general corporate purposes amount, offer expenses, price band and share counts in the offer are blank. The document does not say how output above permitted capacity was treated by the pollution board. Which loans will be repaid, out of ₹744.1 crore identified, is left open (DRHP p.114).

Some inconsistencies are recorded as document matters, not business ones: FY26 director remuneration is ₹217.03 million in the MD&A and ₹241.03 million for the three directors in the related-party note, the gap matching ₹24.00 million of pay capitalised (DRHP p.396, DRHP p.357, DRHP p.359); a peer is spelled both "Gallant" and "Gallantt" (DRHP p.121, DRHP p.31); and Richhi Agarwal appears as a relative of key personnel in the related-party tables but as a promoter elsewhere (DRHP p.80, DRHP p.295).

21Five questions for management

1. What was the average realisation per tonne for sponge iron, HR coils and TMT bars in each of FY24 to FY26, and how much of the margin fall came from price rather than cost?
2. By how many tonnes did production exceed the permitted capacity in each year, and what has the Chhattisgarh Environment Conservation Board said about it?
3. What did the company pay Zortea Logistics LLP per tonne for raw materials in FY26 against other suppliers of the same material?
4. What is the expected cost of the Nawapara plant and of the brownfield additions, and how much new borrowing would they need after the ₹650.0 crore repayment?
5. What remuneration will Richhi Agarwal actually draw in FY27 under the new terms allowing up to ₹10.0 crore, and what work does the role cover?

2Sources and cited facts

This study was read from 2 documents the company filed. The 170 figures it cites are listed under the document each came from, with the page and the sentence as printed.