German Green Steel And Power Limited IPO

01At a glance

What the company does — a vertically integrated iron and steel maker in western India focused on TMT bars from 8 mm to 40 mm, with MS billets and sponge iron; it has two plants in Gujarat — an integrated one at Samakhiyali and one at Viramgam run by its subsidiary German TMX (DRHP p.28).

Who pays it — mostly dealers and distributors, plus direct institutional buyers; the top ten customers were more than 50% of revenue in the nine months to December 2024, the largest more than 17.24% (DRHP p.28, DRHP p.33). TMT bars were about 79% of FY26 gross revenue (our arithmetic, addendum, page 8).

Why it is raising money — ₹3,252.12 million to expand the Samakhiyali plant and build a hybrid wind and solar power plant, ₹550.14 million to repay borrowings, and the rest for general purposes (DRHP p.29). Converted from ₹ lakh.

How fast it has grown — revenue from ₹11,298 million in FY24 to ₹15,076 million in FY25 and ₹16,790 million in FY26 (addendum, page 8). Converted from ₹ lakh.

The one thing to understand — a steel maker growing fast on borrowed money and rising margins, with more investment to come. EBITDA margin rose from 7.02% to 9.94%, but plant and capital work in progress more than doubled in two years, inventory days lengthened, and borrowings reached about ₹3,340 million before the IPO repays ₹550 million of them (our arithmetic, DRHP p.29, addendum, pages 8 and 31). Converted from ₹ lakh.

02The business, in plain words

A secondary steel maker makes sponge iron and billets, rolls the billets into reinforcement bars for construction, and sells them through dealers to builders and contractors, meeting part of its power needs from its own plants.

A builder in Gujarat needs reinforcement bars for a building → it orders TMT bars from a German Green dealer → the company rolls and dispatches them from its plant → the dealer pays the company on agreed terms.

Earnings equation: Profit ≈ tonnes sold × (price − raw materials and power) − conversion costs − depreciation − interest. EBITDA margin was 9.94% in FY26 (addendum, page 8).

03Where the money comes from

Source: addendum, page 8. Converted from ₹ lakh.

04The growth record

Source: addendum, pages 8 and 35. Converted from ₹ lakh.

05What the growth is made of

TMT bars. Their revenue nearly doubled in two years while billet sales fell (addendum, page 8). Revenue grew 33% in FY25 and 11% in FY26 (our arithmetic, addendum, page 8).

06Earnings quality

Operating cash flow of ₹2,435.88 million over FY24 to FY26 exceeded profit of ₹1,815.00 million, but payments for plant and equipment were ₹4,571.85 million (our arithmetic, addendum, page 35). Inventory rose from ₹1,277.13 million to ₹2,980.90 million and inventory turnover fell from 6.81 to 4.20 times (addendum, pages 8 and 31). Return on net worth fell from 23.67% to 18.86% (addendum, page 8). Converted from ₹ lakh.

07The balance sheet

Source: addendum, pages 8 and 31. Borrowings are the sum of current and non-current amounts (our arithmetic). Converted from ₹ lakh. Share capital rose from ₹84.57 million to ₹544.86 million over the two years (addendum, page 31).

08What the money is for

Source: DRHP p.29. Converted from ₹ lakh.

09Who is selling

Source: DRHP p.30, DRHP p.136. The shares offered are about 3.8% of the company (our arithmetic). The promoters' average acquisition costs are ₹15.28 and ₹5.00 a share (DRHP p.41).

10Promoters

The promoters are Inamulhaq Shamsulhaq Iraki, Abdulhaq Shamsulhaq Iraki and Ibrarulhaq Inamulhaq Iraki, who hold 84.13%; family members in the promoter group hold the remaining 15.87% (DRHP p.30). Eight tax proceedings involving ₹169.51 million are pending against the promoters (DRHP p.33).

11Who already owns it

Source: DRHP p.30. The last row is our arithmetic.

12What changed just before the IPO

• Name — changed from Haq Steels and Metaliks Limited in January 2024 (addendum, page 1).
• Capital spending — ₹2,461.96 million on plant in FY25 alone (addendum, page 35).
• Margins — EBITDA margin up to 9.94% in FY26 (addendum, page 8).

13Capacity and expansion

Two plants, at Samakhiyali and Viramgam (DRHP p.28). Power comes partly from a 16 MW coal-based captive plant, 4 MW of waste-heat recovery and a hybrid wind and solar plant, with further wind and solar capacity to be commissioned (DRHP p.54). The proceeds fund an expansion at Samakhiyali and a hybrid wind and solar plant (DRHP p.29).

14Market size and industry structure

The CARE report cited in the offer document expects India's steel consumption to grow 8% in FY2026 after four years of double-digit growth (DRHP p.28). That projection is CARE's, and newboard has not tested it.

15Competitive position

What the document claims, and what it rests on:

• Integration — sponge iron, billets and bars at Samakhiyali (DRHP p.28).
• Captive and renewable power (DRHP p.54).
• Dealer network in western India (DRHP p.28).

Against that: a commodity product, customer concentration, dependence on raw-material suppliers, and rising inventory and debt (DRHP p.33, addendum, pages 8 and 31).

16Peers the company named

Source: addendum, page 7. Converted from ₹ lakh. The table also lists Kamdhenu; the document gives an average P/E of 36.76, calculated from the highest and lowest (addendum, page 6).

No P/E is possible for the company until a price band is set.

17Risks, in plain words

• Customers. Ten customers were over half of revenue (DRHP p.33).
• Raw materials. Dependence on third-party suppliers (DRHP p.33).
• Debt. Borrowings rose 75% in FY25 (addendum, page 31).
• Working capital. Inventory more than doubled in two years (addendum, page 31).
• Expansion. A large new project funded by the IPO (DRHP p.29).

18Litigation and regulatory matters

Source: DRHP p.32, DRHP p.33. Converted from ₹ lakh.

19Related-party transactions

Not read in detail for this study.

20What the offer document does not say

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

• Updated customer concentration for FY26, as the addendum updates only financial and certain business metrics (addendum, page 1).
• How much capacity the Samakhiyali expansion adds, in the pages read.
• Why share capital rose between FY24 and FY26, in the pages read.
• What the civil claims against the company concern, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. How much new steel capacity will the ₹3,252 million project add?
2. Why has inventory turnover fallen from 6.8 to 4.2 times?
3. How much debt will remain after ₹550 million is repaid?
4. How much does captive and renewable power save per tonne?
5. What are the ₹351 million of tax and civil claims against the company?

1Sources and cited facts

This study was read from 1 document the company filed. The 15 figures it cites are listed under the document each came from, with the page and the sentence as printed.