Renny Strips Limited IPO

01At a glance

What the company does: makes structural steel products across the chain from MS billets to wire rods, HR coils, ERW pipes and tubes, fabrication, and scaffolding and formwork systems (DRHP p.29). Its melting capacity was 199,200 tonnes a year in FY25 (DRHP p.144).

Who pays it: steel users in construction and industry; the top ten customers were 55.13% of revenue in the six months to September 2025 (DRHP p.43). The company served 21 countries in that period (DRHP p.144).

Why it is raising money: ₹1,755.00 million to set up a fourth unit in Ludhiana for scaffolding, formwork and ERW pipes and to upgrade Units I and III, ₹550.00 million to repay borrowings, and the rest for general purposes (DRHP p.30).

How fast it has grown: revenue from ₹5,334 million in FY23 to ₹8,822 million in FY24 and ₹8,562 million in FY25, and ₹4,879 million in the six months to September 2025 (DRHP p.32).

The one thing to understand: growth funded by borrowing. Operating cash flow was negative in each of the four periods shown, a combined ₹542.49 million, while borrowings rose from ₹1,412 million to ₹3,725 million; promoter and family loans have been part of that funding (DRHP p.32, DRHP p.35, DRHP p.374, our arithmetic).

02The business, in plain words

A steel maker melts raw material into billets and rolls them into long and flat products; it adds value by making pipes and scaffolding from its own steel.

A construction contractor needs scaffolding for a high-rise → it orders a scaffolding system from Renny Strips → the company casts billets, rolls them into coils and tubes, and fabricates the scaffolding → it delivers and is paid on credit.

Earnings equation: Profit ≈ tonnes sold × (price − raw material, power and conversion cost) − interest. EBITDA margin was 9.33% in the six months (DRHP p.143).

03Where the money comes from

Source: DRHP p.29.

Source: DRHP p.43. H1 FY26 is six months.

04The growth record

Source: DRHP p.32, DRHP p.143, DRHP p.374. H1 FY26 is six months.

Revenue grew at a compound 26.7% a year from FY23 to FY25 and profit after tax at 43.2% a year (our arithmetic, DRHP p.32). Trade receivable days were 29 in FY23, 20 in FY24, 25 in FY25 and 33 in the six months to September 2025 (DRHP p.61).

05What the growth is made of

Capacity in FY24, margin since. Melting capacity rose from 159,950 to 199,200 tonnes a year in FY24 and utilisation from 64.67% to 94.18%, lifting revenue 65% (DRHP p.144, our arithmetic). Revenue then fell slightly in FY25 while EBITDA rose 70%, and six-month EBITDA of ₹455 million was nearly FY25's full-year figure (DRHP p.143, our arithmetic). The pages read do not explain the margin gain.

06Earnings quality

Profit has not produced cash in any period shown: ₹644.99 million of profit from FY23 to September 2025 against negative operating cash flow of ₹542.49 million (our arithmetic, DRHP p.32, DRHP p.374). Cash was ₹8.69 million at September 2025 (DRHP p.374). The previous statutory auditor included remarks under the Companies (Auditor's Report) Order for FY25 (DRHP p.33). Other income was ₹48.89 million in FY25 against profit before tax of ₹280.58 million, or 17.4% of it (our arithmetic, DRHP p.86).

07The balance sheet

Source: DRHP p.32.

Binny Gupta lent the company ₹396.20 million in FY25 and was repaid ₹168.32 million in the six months; Renny Steel Castings, a promoter-group company, lent ₹447.89 million in FY24 and ₹239.95 million in FY25 and was repaid ₹560.62 million in FY25 (DRHP p.35, DRHP p.37).

08What the money is for

Source: DRHP p.30.

The fresh issue is of up to ₹3,000.00 million (DRHP p.29).

09Who is selling

Source: DRHP p.31. Together they offer up to 12,000,000 shares, about 70% of their combined holding; the split was not read for this study (DRHP p.29, our arithmetic). Dev Raj Gupta and Usha Gupta each offer up to 6,000,000 shares (DRHP p.117).

10Promoters

The promoters are Binny Gupta and Chetna Gupta (DRHP p.29). Two criminal proceedings are pending against the promoters, amounts not ascertainable (DRHP p.34).

11Who already owns it

Source: DRHP p.31. The last row is our arithmetic. The company has seven shareholders, all promoters or promoter group (DRHP p.32).

12What changed just before the IPO

• Share capital: up from ₹28.38 million to ₹681.05 million in the six months after a bonus issue and share split (DRHP p.32, DRHP p.33).
• Margins: EBITDA margin up to 9.33% (DRHP p.143).
• Exports: countries served rose from 13 in FY25 to 21 in the six months (DRHP p.144).
• Borrowings: up ₹827 million in the six months (our arithmetic, DRHP p.32).

The company issued bonus shares at 23 for every 1 held and split each ₹10 share into two of ₹5, both approved in September 2025 (DRHP p.42). The last allotment of shares for cash was a rights issue at ₹195 a share in January 2024 (DRHP p.102). S P A A And Associates ended its term as statutory auditor on September 26, 2025 and Manjul Mittal & Associates was appointed the same day (DRHP p.94). The company converted from a private to a public company, with a fresh certificate of incorporation dated July 3, 2025 (DRHP p.89).

13Capacity and expansion

Melting capacity of 199,200 tonnes a year, used at over 90% in FY25 and the six months (DRHP p.144). The proceeds fund Unit IV in Ludhiana for scaffolding, formwork and ERW pipes (DRHP p.30).

14Market size and industry structure

The CRISIL report cited in the offer document puts India's steel demand at 152 million tonnes in FY2025 and projects 200 to 210 million tonnes by FY2029, and global scaffolding demand at 14.5 to 15.5 million tonnes in 2024 (DRHP p.29). Those projections are CRISIL's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• Vertical integration from billets to scaffolding, per CRISIL (DRHP p.29).
• High utilisation of melting capacity (DRHP p.144).

Against that: no long-term customer contracts, thin historical margins, heavy borrowing and dependence on family lending (DRHP p.35, DRHP p.43).

16Peers the company named

The document gives the listed peers' P/E range as 17.48 to 67.40, average 35.96, using prices on 10 December 2025 (DRHP p.141). The peer names were not read for this study.

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

17Risks, in plain words

• Customers. No long-term agreements; ten customers were 55% of revenue (DRHP p.43).
• Cash flow. Negative in every period shown (DRHP p.374).
• Debt. Borrowings 3.5 times net worth (DRHP p.32).
• Project risk. A new unit to build (DRHP p.30).

18Litigation and regulatory matters

Source: DRHP p.33, DRHP p.34. Contingent liabilities at September 2025 were ₹34.55 million (DRHP p.34).

19Related-party transactions

Loans from Binny Gupta, Chetna Gupta and Renny Steel Castings are shown in section 06 (DRHP p.35, DRHP p.37). Binny Gupta was paid ₹12.00 million a year as chairman and managing director (DRHP p.35). Chetna Gupta was paid ₹6.00 million a year as whole time director, so the two promoters together drew ₹18.00 million in each of FY23 and FY25 (our arithmetic, DRHP p.35).

20What the offer document does not say

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

• Why operating cash flow has been negative every year, in the pages read.
• What drove EBITDA margin from 5.65% to 9.33%, in the pages read.
• What the criminal proceedings against the promoters concern, in the pages read.
• What the previous auditor's CARO remark said, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. Why has operating cash flow been negative in every period despite rising profit?
2. What explains the six-month EBITDA margin of 9.3%, against 3 to 6% before?
3. On what terms have the promoter and Renny Steel Castings lent to the company?
4. Why are Dev Raj Gupta and Usha Gupta offering about 70% of their shares?
5. What criminal proceedings are pending against the promoters?

1Sources and cited facts

This study was read from 1 document the company filed. The 53 figures it cites are listed under the document each came from, with the page and the sentence as printed.