Madhur Iron & Steel (India) Limited IPO

01At a glance

What the company does — melts and re-rolls steel into structural shapes, principally angles and channels, and has recently added fabrication and galvanising of those shapes (DRHP p.3).

Who pays it — business buyers, including public-sector undertakings and government entities in the power and railway sectors for which it is an approved vendor; the document does not name a single customer (DRHP p.3).

Why it is raising money — ₹8,195.43 lakh for a new rolling mill at Berla, ₹3,400.00 lakh for working capital and ₹1,000.49 lakh to repay borrowings (DRHP p.135).

How fast it has grown — revenue from ₹23,925.12 lakh in FY24 to ₹44,401.61 lakh in FY26, and profit after tax from ₹1,256.03 lakh to ₹2,387.57 lakh (DRHP p.86).

The one thing to understand — the company has reported profit in each of the last three years and negative cash from operations in each of the same three years, for a cumulative operating outflow of ₹12,430.21 lakh against cumulative profit of ₹5,455.85 lakh (DRHP p.88).

02The business, in plain words

Madhur Iron & Steel takes semi-finished steel — billets and blooms — heats it and rolls it into structural shapes: angles, channels, mild-steel sections, flats and rods. An angle is the L-shaped bar that transmission towers and railway electrification masts are bolted together from. The company has recently begun fabricating and galvanising those shapes into finished tower parts rather than selling the raw sections alone (DRHP p.3).

A power or railway contractor needs steel angles cut and drilled to a drawing → it places an order with an approved vendor → the company rolls the sections at Bhilai, and now also fabricates and galvanises them → it is paid per tonne, against that order.

Two things sit beside the rolling business. The first is trading: the company buys steel and resells it without processing, which was 34.19% of revenue in FY26 against 12.45% in FY24 (DRHP p.3). The second is accreditation: it describes itself as an approved vendor of certain public-sector undertakings and government entities in power and railways, which is what lets it bid for that work at all (DRHP p.3).

The company operates two units at Bhilai in Chhattisgarh. Unit I rolls structural steel; Unit II, which began fabrication and galvanising operations in September 2026, does the engineered work (DRHP p.6). It employed 240 permanent people as of 31 August 2026 (DRHP p.285). It has no subsidiary, no holding company and no joint ventures (DRHP p.307).

Earnings equation: Revenue = tonnes rolled × realisation per tonne + tonnes traded × trading spread. The manufacturing margin is the gap between the billet price and the section price, against a largely fixed mill cost, so it widens with utilisation and narrows when input prices move faster than order prices.

03Where the money comes from

Manufacturing has been shrinking as a share of the total while the absolute number grows. Structural steel products were ₹20,944.24 lakh, or 87.55%, of FY24 revenue and ₹29,221.72 lakh, or 65.81%, of FY26 revenue; traded products went from ₹2,980.88 lakh to ₹15,179.89 lakh over the same two years (DRHP p.3).

Inside manufacturing, one product does most of the work. Manufactured angles were ₹26,598.53 lakh in FY26, 60% of total revenue, against ₹16,051.24 lakh and 67% in FY24 (DRHP p.3). Traded angles added a further ₹9,532.37 lakh, 21% of FY26 revenue, up from ₹200.62 lakh in FY24 (DRHP p.4). MS sections and flats and rods, together 17% of FY24 revenue, were nil in FY26 (DRHP p.4). Engineered products — parts and components of transmission line towers — were ₹1,306.49 lakh, the first revenue the company has reported from that segment (DRHP p.4).

Geography is concentrated on both sides of the business. Chhattisgarh was 75.39% of FY26 revenue against 66.56% in FY24, with Odisha next at 15.21% (DRHP p.5). Procurement from Chhattisgarh was 67.90% of total purchases in FY26 and 84.49% in FY24 (DRHP p.24).

Source: DRHP p.6. Revenue does depend on a small number of buyers, and the dependence has increased: the largest customer moved from about one rupee in seven to about one rupee in five over two years, and the top ten from 56.87% to 62.04%. No customer is named anywhere in the document. Supply is more concentrated still — the top ten suppliers were 79.55% of procurement in FY26, against 57.29% in FY24 (DRHP p.24).

04The growth record

Source: AP p.9, p.10, restated from DRHP p.86 and p.88.

Revenue compounded at 36.2% a year over the two years, EBITDA at 44.8% and profit after tax at 37.9%. The EBITDA margin rose 134 basis points across the two years and the profit margin 13 basis points; the gap between the two is finance cost, which rose from ₹708.16 lakh to ₹1,847.29 lakh as borrowings grew (DRHP p.86).

Read from the filing: return on equity and return on capital employed both fell every year while profit rose, because equity and borrowings grew faster than earnings. Equity share capital went from ₹661.86 lakh to ₹2,978.45 lakh over the two years, which includes two bonus issues rather than cash raised (AP p.9; DRHP p.109, p.113).

05What the growth is made of

Revenue rose ₹20,476.49 lakh between FY24 and FY26. Two components account for nearly all of it, and the document supports the split.

Trading accounts for ₹12,199.01 lakh of the increase, from ₹2,980.88 lakh to ₹15,179.89 lakh (DRHP p.3). That is 60% of the total revenue increase from a business that buys steel and resells it. Manufacturing accounts for ₹8,277.48 lakh of the increase, from ₹20,944.24 lakh to ₹29,221.72 lakh (DRHP p.3).

Volume explains most of the manufacturing increase. Capacity utilised at Unit I rose from 35,255.35 MT in FY24 to 49,064.23 MT in FY26, a rise of 13,808.88 MT, or 39.2% (AP p.10). Manufacturing revenue rose 39.5% over the same two years. Read from the filing: at that level of agreement, essentially all of the manufacturing growth is tonnes rather than realisation, and average realisation per tonne was close to flat.

Within manufacturing the mix moved. MS sections, ₹3,750.04 lakh in FY24, were nil in FY26; angles absorbed that volume and more (DRHP p.4). The company began reporting engineered products for the first time in FY26 at ₹1,306.49 lakh (DRHP p.4).

The DRHP does not disclose realisation per tonne for traded goods, so the trading increase cannot be separated into volume and price at all. Nor does it disclose tonnes by product, so the shift from MS sections to angles cannot be measured in tonnes.

06Earnings quality

The line that needs explaining is the first. Over three years the company earned ₹5,455.85 lakh of profit and consumed ₹12,430.21 lakh of cash in operations. The document gives the reason directly: inventories rose ₹3,772.94 lakh, ₹5,580.24 lakh and ₹2,273.04 lakh in FY24, FY25 and FY26, and trade receivables rose ₹4,019.18 lakh in FY25 and ₹3,860.70 lakh in FY26 (DRHP p.88). Trade receivables on the balance sheet went from ₹180.43 lakh at the end of FY24 to ₹8,020.52 lakh at the end of FY26; inventories from ₹9,419.90 lakh to ₹17,273.17 lakh (DRHP p.84).

The gap was funded by borrowing. Financing activities brought in ₹4,212.79 lakh, ₹6,566.39 lakh and ₹5,915.03 lakh across the three years, and total borrowings rose from ₹7,250.35 lakh to ₹19,492.55 lakh (DRHP p.88, AP p.9).

Read from the filing: a re-roller that is adding tonnes, holding more stock and extending more credit will consume cash while it grows, and the document attributes the outflow to exactly those two lines. What the document does not show is whether receivable days stop at 50, because it discloses no ageing schedule by customer and no collection history.

07The balance sheet

Total borrowings were ₹19,492.55 lakh at the end of FY26, of which ₹18,628.02 lakh was current and ₹864.53 lakh non-current — that is, 95.6% of the debt is working-capital borrowing that turns over within the year (AP p.9). Cash and cash equivalents were ₹22.18 lakh, with a further ₹361.12 lakh in other bank balances (DRHP p.84). Net worth was ₹11,789.73 lakh, so the debt-to-equity ratio was 1.66×, against 1.25× a year earlier (AP p.10).

Contingent liabilities were ₹452.67 lakh, 3.84% of net worth: ₹445.46 lakh of bills discounted with the company's bankers under letters of credit and ₹7.21 lakh of bank guarantees. There were no disputed direct or indirect tax demands, no MSMED claims and no industrial-disputes claims (DRHP p.47, DRHP p.90). Lease liabilities were ₹44.56 lakh non-current (DRHP p.84).

The document does not state the size of the fresh issue in rupees, so the post-issue balance sheet cannot be drawn. Two of its lines can be: ₹1,000.49 lakh of the net proceeds repays borrowings, and ₹3,400.00 lakh funds working capital (DRHP p.135). Applied to the FY26 balance sheet, the first would take borrowings from ₹19,492.55 lakh to ₹18,492.06 lakh, a reduction of 5.1%. This is a judgement, not a disclosure: on that arithmetic the issue does not materially change the debt position, because the borrowing is working-capital borrowing and the working-capital object adds to the assets those borrowings fund.

08What the money is for

The issue is a fresh issue of up to 1,10,00,000 equity shares of face value ₹10 each. There is no offer for sale (DRHP p.1).

Source: DRHP p.135. General corporate purposes are capped at 25% of gross proceeds under the SEBI regulations, and the amount is to be finalised when the issue price is set.

The largest object is a new rolling mill at Berla in Bemetara district, on about 6.25 acres assembled through three sale deeds registered in October 2025, March 2026 and May 2026 (AP p.6, DRHP p.8). The DRHP states that the ₹8,195.43 lakh estimate is based on management estimates, has not been appraised by any bank or financial institution, rests on third-party quotations that may expire, and that no definitive agreements have been entered into (DRHP p.39). It also discloses, as a risk factor, that orders have not yet been placed and payments have not been made for the proposed unit (DRHP p.56).

Into the business the whole of it. The issue is entirely a fresh issue. To selling shareholders nil. There is no offer for sale (DRHP p.1).

That is unusual enough to state plainly: no existing holder is realising anything in this issue, and every rupee raised goes to the company.

The company may, in consultation with the lead manager, undertake a pre-IPO placement of up to 22,00,000 equity shares before the red herring prospectus is filed; if it does, the issue size reduces accordingly and the placement may not exceed 20% of the issue (DRHP p.135).

This is a judgement, not a disclosure: the three stated objects total ₹12,595.92 lakh before general corporate purposes and issue expenses, and the fresh issue is up to 1,10,00,000 shares. Those two figures together imply the price the company has in mind, but the DRHP states no band and none should be read into it here.

09Who is selling

Nobody. The issue is a fresh issue of up to 1,10,00,000 equity shares and the offer-for-sale portion is stated as not applicable (DRHP p.1, AP p.1).

The one thing that could change this before the issue opens is the pre-IPO placement described above, which is a primary issuance by the company and not a sale by an existing holder (DRHP p.135).

10Promoters

The promoter is Jayant Agrawal, the managing director, aged about 26. He has been associated with the company since 27 January 2020, completed a bachelor's degree in business administration at Christ University, Bengaluru in 2020, and has about six years of experience in the industry. He is responsible for strategic planning, business development, procurement and operations (AP p.7).

He holds 2,20,08,400 equity shares, 73.89% of pre-issue capital. The promoter group holds a further 13,20,000 shares, 4.43%: Umang Agrawal 2.55%, Virendra Kumar Agrawal 1.61% and Sangeeta Agrawal 0.27%. Promoter and promoter group together hold 78.32% (AP p.8).

The board is the promoter as managing director, Rajesh Modha as whole-time director, and three non-executive independent directors — Shikha Jain, Roopa Garg and Prashant Samantrai. The chief financial officer is Prateek Sethi and the company secretary is Ketan Kumar Gupta (AP p.13).

Promoter economics. The average cost of acquisition per equity share for the promoter is ₹0.43 against a face value of ₹10, after adjusting for bonus shares (AP p.12). The weighted average cost of acquisition of all equity shares transacted in the last three years was ₹18.35, with a range of ₹0 to ₹200; in the last 18 months and the last one year the weighted average was nil, because no shares were transacted (AP p.12).

Two bonus issues sit behind that ₹0.43. On 16 May 2024 the company issued 66,18,600 shares as a one-for-one bonus, taking capital to 1,32,37,200 shares; on 5 September 2025 it issued 1,48,92,273 shares on the same one-for-one basis, taking capital to 2,97,84,546 shares (DRHP p.109, DRHP p.113). Between those two events it allotted shares to a long list of outside holders, and the top ten non-promoter holders now hold 7.37% between them, the largest being Ankit Mittal at 0.97%, Raghav Investment Private Limited at 0.88% and Saket Agarwal at 0.87% (AP p.8, AP p.9).

Remuneration and related dealings. The promoter was paid ₹54.35 lakh in FY26, ₹51.50 lakh in FY25 and ₹33.00 lakh in FY24, 0.12% of turnover in the latest year (DRHP p.91). The company paid him interest of ₹29.82 lakh in FY25 and nil in FY26, and repaid ₹292.17 lakh of loans taken from him in FY25 (DRHP p.92).

Litigation and regulatory. There is one material civil matter against the promoter with no amount attributed, and no criminal, tax, statutory or SEBI or exchange disciplinary proceeding against him (AP p.13). The DRHP does not disclose any other listed company promoted by him.

11Who already owns it

Source: AP p.8, p.9; the last row is the balance and is computed here, not printed.

The named outside holders are a mixture of individuals and small institutions: Ankit Mittal 2,89,100 shares, Raghav Investment Private Limited 2,62,400, Saket Agarwal 2,59,600, APPL Containers Limited 2,50,000, Strategic Sixth Sense Capital Fund 2,10,146, NKA Resources LLP 2,00,000, Jalan Chemical Industries Private Limited 2,00,000, Vijay Kumar 1,80,000, Sunil Kumar Gupta 1,72,800 and Chakshu Goyal 1,72,800 (AP p.8, AP p.9).

The post-issue column is left blank throughout the DRHP because the issue price is not set. This is a judgement, not a disclosure: on the full 1,10,00,000 shares and no pre-IPO placement, post-issue capital would be 4,07,84,546 shares, the promoter would hold about 53.96%, promoter and group about 57.20%, and the issue would be about 26.97% of the enlarged capital.

12What changed just before the IPO

The document supports a list. Each item is a fact; none of them is characterised here.

• Receivables went from almost nothing to fifty days. Trade receivables were ₹180.43 lakh at the end of FY24, ₹4,172.94 lakh at the end of FY25 and ₹8,020.52 lakh at the end of FY26 (DRHP p.84).
• Trading became a third of revenue. From ₹2,980.88 lakh, 12.45%, in FY24 to ₹15,179.89 lakh, 34.19%, in FY26 (DRHP p.3).
• Two one-for-one bonus issues in sixteen months, in May 2024 and September 2025, taking shares outstanding from 66,18,600 to 2,97,84,546 (DRHP p.109, DRHP p.113).
• A new segment began. Engineered products — transmission-tower parts — reported their first revenue of ₹1,306.49 lakh in FY26, and Unit II commenced fabrication and galvanising operations in September 2026, the same month the DRHP was filed (DRHP p.4, AP p.12).
• A related-party capital-goods purchase appeared. The company bought ₹1,061.38 lakh of capital goods from B.S.L. Rail Track Engineers Private Limited in FY26, 2.39% of turnover, against nil in the two prior years (DRHP p.91).
• Job-work charges to a group company rose fifty-fold. Payments to Shri Ashutosh Structure Private Limited went from ₹9.62 lakh in FY25 to ₹517.97 lakh in FY26 (DRHP p.91).
• Related-party sales fell as a share of turnover, from 12.23% in FY25 to 7.69% in FY26, while remaining ₹3,413.37 lakh in absolute terms (DRHP p.92).
• Land for the new unit was assembled, through three sale deeds registered in October 2025, March 2026 and May 2026 (AP p.6).
• Borrowings rose 169% over two years, from ₹7,250.35 lakh to ₹19,492.55 lakh, while net worth rose 176% largely through retained earnings and the share issues (AP p.9).
• An audit-trail non-compliance was regularised. The company filed an adjudication application in Form GNL-1 under section 134 of the Companies Act, which the Registrar has admitted and which is under process (AP p.13).

13Capacity and expansion

Source: AP p.9, AP p.10, on an independent chartered engineer's certificate. In FY26 Unit I rolled 49,064.23 MT and fabricated 181.62 MT (AP p.10).

Three things follow from the table. Re-rolling capacity was raised from 44,100 MT to 57,600 MT between FY24 and FY25, and utilisation of that line reached 85.18% in FY26 — the highest of the three years and close enough to the ceiling that further tonnes need new capacity. The fabricated-goods line at Unit I ran at 91.04% in FY24 and 2.33% in FY26, a fall the DRHP does not explain in the abridged disclosure. Unit II has 18,000 MT of installed capacity and no utilisation figure at all, because it only commenced operations in September 2026 (AP p.12).

The Berla unit is a new rolling mill on about 6.25 acres, costed at ₹8,195.43 lakh from the net proceeds and scheduled across FY27 and FY28 (DRHP p.135). The DRHP does not state the tonnage the Berla mill will install, does not give a commissioning date, and records that orders have not been placed (DRHP p.56). Capacity is not revenue: on this company's own record, a line can sit at 2.33% utilisation for a year.

14Market size and industry structure

As claimed. The industry section relies on a report by CareEdge, commissioned for the offer document. It states that India's per-capita finished steel consumption was 109.2 kg in CY25 against a global average of 209 kg, that the National Steel Policy 2017 targets 300 MT of steel-making capacity by CY30 and 160 kg of per-capita consumption, and that steel carries an output multiplier of 1.4× on GDP and an employment multiplier of 6.8× (AP p.7).

The part that is addressable. The company rolls structural sections for power and railway infrastructure buyers, and 75.39% of its revenue came from one state in FY26 (DRHP p.5). National steel consumption is therefore not its market; the relevant demand is structural-section demand from transmission and railway-electrification work reaching buyers within economic freight distance of Bhilai. The DRHP does not size that.

What the company is today. Revenue of ₹44,401.61 lakh in FY26 against a national figure the document does not translate into tonnes for this product category, so the company's share of its own market cannot be computed from the DRHP.

Every industry figure above is from a report commissioned by the issuer for this document, and is labelled as such each time it is cited.

15Competitive position

The DRHP names no competitor and gives no comparative financial table, so the table this section normally carries cannot be built from the document.

What the document does give is the basis on which the company says it wins work: approval as a vendor of certain public-sector undertakings and government entities in the power and railway sectors, which requires accreditation and compliance with prescribed technical and quality standards (DRHP p.3); certifications including ISO 9001:2015, ISO 14001 and ISO 45001:2018 obtained in 2026, and conformity with a European Union construction-products regulation for angles, channels, MS sections and flats and rods (DRHP p.285); and location in Chhattisgarh, from which it draws 67.90% of its purchases and to which it makes 75.39% of its sales (DRHP p.24, DRHP p.5).

Read from the filing: vendor approval and freight economics are the two barriers the document evidences. Neither is quantified in it — there is no disclosure of how many approved vendors compete for the same tenders, and no disclosure of what freight costs as a share of realisation.

16Peers the company named

The company names none. The DRHP states that as on its date there are no listed companies in India or globally that operate under a comparable business model, and that accordingly no industry comparison has been provided (AP p.11).

That statement should be read together with what the document does elsewhere: it explains how listed-peer earnings per share and industry price-to-earnings ratios would be sourced, noting that peer financial information is standalone and that the industry ratio is taken from BSE as of 10 September 2026 (DRHP p.53). The machinery for a peer table is described; the table itself is not provided.

Read from the filing: India has several listed structural-steel re-rollers and section makers, so the absence of a peer set is a choice about comparability rather than a statement that no roughly similar listed company exists. Because the issuer has named none, this study does not substitute its own — and the comparison is in any case only meaningful once a price band exists.

17Risks, in plain words

Customers. The top ten buyers were 62.04% of FY26 revenue and the largest was 21.90%, both up from two years earlier (DRHP p.6). Losing one of the top three, which are 34.13% between them, would take out about a third of revenue against a fixed mill cost, and the document names no customer, so a reader cannot judge how replaceable any of them is.

Suppliers. The top ten suppliers were 79.55% of procurement in FY26, up from 57.29% in FY24 (DRHP p.24). The business depends on billets and blooms, whose availability and price the company does not control, and which it must finance through the 157 days of inventory it now carries (DRHP p.24, DRHP p.412).

Financial. Operating cash flow was negative in each of FY24, FY25 and FY26 (DRHP p.88). Current borrowings were ₹18,628.02 lakh of ₹19,492.55 lakh total, so 95.6% of the debt must be rolled over inside a year, at a finance cost that has already grown from ₹708.16 lakh to ₹1,847.29 lakh (AP p.9, DRHP p.86).

Business. One product, angles, was 60% of revenue from manufacturing alone in FY26 (DRHP p.4). One state was 75.39% of revenue and 67.90% of purchases (DRHP p.5, DRHP p.24). The fabricated-goods line ran at 2.33% of capacity in FY26 (AP p.10), and the engineered-products business it is being expanded into has existed for one year and one quarter.

Issue-specific. The Berla capital expenditure of ₹8,195.43 lakh has not been appraised by any bank or financial institution, rests on quotations that may expire, and no orders have been placed (DRHP p.39, DRHP p.56). A cost overrun would be funded from somewhere other than the net proceeds.

Regulation and compliance. The FY25 audit report carries an observation on the accounting-software audit trail, no audit trail existed before 18 May 2024, and an adjudication application under section 134 of the Companies Act is pending with the Registrar (AP p.13).

Promoters. The promoter holds 73.89% before the issue and is 26 years old with about six years in the industry; the DRHP itself does not disclose a succession arrangement (AP p.7, AP p.8).

18Litigation and regulatory matters

Source: AP p.13 and p.14, as at the date of the DRHP; amounts are to the extent quantifiable and material civil matters are those meeting the company's materiality policy.

Nothing is outstanding by the promoter, by the directors, by the key managerial personnel or against the key managerial personnel and senior management. There are no disciplinary actions by SEBI or the stock exchanges against the promoter. Separately, there are no disputed direct or indirect tax demands in contingent liabilities (DRHP p.47).

19Related-party transactions

Source: DRHP p.91 and p.92.

Two movements are worth stating precisely. Related-party purchases of raw material collapsed from ₹3,545.56 lakh in FY24, 14.82% of turnover, to ₹447.90 lakh in FY26, while two new categories appeared in their place: job-work charges of ₹517.97 lakh and a capital-goods purchase of ₹1,061.38 lakh, both in FY26, both from group companies, both from a base of nil or near nil (DRHP p.91).

The company has also obtained shareholder approval at its annual general meeting for the acquisition of land and building from its group company Shri Ashutosh Structure Private Limited (DRHP p.41). The DRHP does not state the consideration for that acquisition in the summary section.

Loans from the promoter were repaid: ₹25.00 lakh in FY24 and ₹292.17 lakh in FY25, with interest of ₹30.69 lakh and ₹29.82 lakh, and nil on both counts in FY26 (DRHP p.92).

20What the offer document does not say

• No customer is named, anywhere. Concentration is given in percentages only (DRHP p.6).
• No realisation per tonne, for manufactured or traded goods, so revenue cannot be split into volume and price except by inference.
• No tonnage by product. Angles are 60% of revenue but the document does not say how many tonnes.
• No capacity for the Berla unit. The largest object of the issue is costed at ₹8,195.43 lakh with no stated tonnage and no commissioning date (DRHP p.135).
• No explanation for the fabricated-goods line falling from 91.04% to 2.33% utilisation in two years (AP p.10).
• No receivables ageing or collection history, against receivable days that moved from about 4 to about 50 in two years.
• No order book. There is no disclosure of orders in hand, order-book value or cancellation history for an order-based business.
• No peer comparison, by the issuer's own statement that no comparable listed company exists (AP p.11).
• No price band, lot size or issue dates, which is normal at DRHP stage and will come with the red herring prospectus.
• No consideration stated for the related-party land and building acquisition approved by shareholders (DRHP p.41).

21Five questions for management

1. Trade receivables went from ₹180.43 lakh to ₹8,020.52 lakh in two years while revenue less than doubled. What are the credit terms with the top three customers now, and what were they in FY24?
2. The fabricated-goods line at Unit I ran at 91.04% utilisation in FY24 and 2.33% in FY26. What happened to that business, and does the new engineered-products line at Unit II serve the same customers?
3. What tonnage will the Berla mill install, at what utilisation does it cover its own depreciation and interest, and in which quarter is it expected to produce?
4. Capital goods of ₹1,061.38 lakh were bought from B.S.L. Rail Track Engineers Private Limited in FY26, against nil in the two prior years. What was bought, and how was the price established?
5. Trading was 34.19% of FY26 revenue. What gross margin does the trading business earn, and is it working capital funded on the same lines as the manufacturing business?

2Sources and cited facts

This study was read from 2 documents the company filed. The 82 figures it cites are listed under the document each came from, with the page and the sentence as printed.