Mittal Sections
- Mittal Sections is coming out with an initial public offering (IPO) of 37,00,000 equity shares in a price band of Rs 136-143 per equity share.
- The issue will open on October 7, 2025 and will close on October 9, 2025.
- The shares will be listed on SME Platform of BSE.
- The face value of the share is Rs 10 and is priced 13.60 times of its face value on the lower side and 14.30 times on the higher side.
- Book running lead manager to the issue is Wealth Mine Networks.
- Compliance Officer for the issue is Hirenkumar Babubahi Patel.
Profile of the company
Mittal Sections is a leading manufacturer of an extensive range of Mild Steel sections and structural steel products, including MS Flat Bars, MS Round Bars, MS Angles, and Channels. These products are produced in compliance with various BIS standards, primarily IS 2062:2011, ensuring consistent quality and high performance across all applications. It manufactures products in different grades, such as E250A offering versatility to meet the diverse needs of its clients across multiple industries. The sizes it provides cover a wide spectrum, allowing for customized solutions in both small-scale and large-scale construction and industrial projects.
Its entire product line is marketed under its registered brand name, “MSL-MITTAL,” which stands for quality, durability, and adherence to industry standards. It is dedicated to producing high-quality steel products that meet rigorous specifications, ensuring its clients receive dependable and durable materials for their projects. It currently operates through two manufacturing plants which are located at Changodar in Ahmedabad, Gujarat. As of September 30, 2024, the aggregate installed capacity of its manufacturing plants were 36,000 metric tonnes per annum (MTPA). The company is in the process of increasing the capacities of its existing manufacturing plants which is expected to increase its aggregate installed capacity from 36,000 MTPA to 96,000 MTPA. These proposed expansions are expected to become operational in FY2026.
The company’s product portfolio includes a diverse range of Mild Steel Flat Bars, Mild Steel Round Bars, Mild Steel Angles, and Channels, which cater to a broad spectrum of customers, including industrial clients and end-users. These products are integral to various sectors, such as construction, infrastructure development, manufacturing, automotive, and general engineering. Mild steel structural and sectional products like flat bars, round bars, angles, and channels are essential for fabricating frameworks, reinforcement structures, machinery, and equipment, making them versatile in a range of applications due to their strength, durability, and ease of fabrication.
Proceed is being used for:
- Capital expenditure towards Acquisition of land, construction of factory building and purchase of plant & machineries
- Meeting working capital requirements
- Full or part repayment and/or prepayment of certain outstanding secured borrowings availed by the company
- General corporate purpose, subject to applicable laws
Industry Overview
India is the world’s second-largest producer of crude steel, with an output of 125.32 MT of crude steel and finished steel production of 121.29 MT in FY23. India’s domestic steel demand is estimated to grow by 9-10% in FY25 as per ICRA. India’s steel production is estimated to grow 4-7% to 123-127 MT in FY24. The growth in the Indian steel sector has been driven by the domestic availability of raw materials such as iron ore and cost-effective labour. Consequently, the steel sector has been a major contributor to India's manufacturing output. The Indian steel industry is modern, with state-of-the-art steel mills. It has always strived for continuous modernization of older plants and up-gradation to higher energy efficiency levels. According to a Deloitte report the demand for steel in India is projected to grow significantly over the next decade, with annual growth rates expected to range from 5% to 7.3%.
In the past 10–12 years, India's steel sector has expanded significantly. Production has increased by 75% since 2008, while domestic steel demand has increased by almost 80%. The capacity for producing steel has grown concurrently, and the rise has been largely organic. In April-October 2024, crude steel production in India stood at 84.94 MT. In April-October 2024, finished steel production stood at 82.65 MT. In FY25 (April-October), the consumption of finished steel stood at 85.71 MT. In April-September 2024 exports of finished steel stood at 2.32 metric tonnes (MT), while imports stood at 4.70 MT. In FY23, the production of crude steel and finished steel stood at 125.32 MT and 121.29 MT, respectively. In FY24, the production of crude steel and finished steel stood at 143.6 MT and 138.5 MT, respectively.
The steel industry has emerged as a major focus area given the dependence of a diverse range of sectors on its output as India works to become a manufacturing powerhouse through policy initiatives like Make in India. With the industry accounting for about 2% of the nation's GDP, India ranks as the world's second-largest producer of steel and is poised to overtake China as the world's second-largest consumer of steel. Both the industry and the nation's export manufacturing capacity have the potential to help India regain its favourable steel trade balance. Going forward, huge scope for growth is offered by India's comparatively low per capita steel consumption and the expected rise in consumption due to increased infrastructure construction and the thriving automobile and railways sectors.
Pros and strengths
Well-established manufacturing setup: The company currently operates two steel manufacturing plants located in Changodar, Ahmedabad, Gujarat. Through continuous maintenance and optimization of these facilities, it has gained significant control over nearly all aspects of its operations, with the exception of sourcing primary raw materials. This control has allowed it to enhance its operational efficiency, maintain healthy operating margins, and focus on delivering superior quality products while creating multiple points of sale across the steel value chain. Its primary product offerings include MS Angles, MS Flat Bars, MS Round Bars, and Channels, with a combined production capacity of 36,000 MTPA.
Manufacturing plants are strategically located: Its two manufacturing plants are strategically located at Changodar, Ahmedabad within the State of Gujarat and near the raw material suppliers and customers. It is well connected by rail and roads with the rest of the country. Hence reducing the cost of transportation substantially without compromising on the quality of the material procured. It also ensures it a continuous supply of products.
Wide range of its product SKUs: The company offers around 55 stock keeping units (SKUs) of structural steel products used in various industries. Maintaining a variety of products provides it with an opportunity to cater to diverse needs of different customer segment. Its product portfolio includes different specification of Mild Steel Flat Bars, Round Bars, Angles, and Channels. It also offers customization options tailored to specific size, length, breadth, thickness, and other requirements by coordinating with its vendors. Its comprehensive product range, coupled with this customization capability, positions it to effectively capitalize on growth opportunities and meet the evolving demand within its industry.
Risks and concerns
Significant revenue comes from limited customers: The company may continue to derive a material portion of its revenue from its top 10 customers and its financial dependence on its top 10 customers poses a potential risk. The company’s top ten customers contribute 44.37%, 33.75%, 33.06%, 30.16% of total revenue for operation for Two months ended May 31, 2025, the year ended March 31, 2025, 2024 and 2023 respectively. A reduction in business from these top 10 customers or any other major clients could have negative implications for both its revenue and profitability.
Geographical constrain: Majority of its revenue is generated form Gujarat i.e., Rs 2,811.83 lakh, Rs 13,652.50 lakh, Rs 16115.13 lakh and Rs 16628.46 lakh which constituting 99.98%, 99.75%, 99.80% and 99.47% of total revenue for operation for Two months ended May 31, 2025, the year ended March 31, 2025, 2024 and 2023 respectively. Any adverse development affecting its operations in this region could have an adverse impact on its business, financial condition and results of operations.
Dependent on limited suppliers for raw material supply: Several of its key raw materials and components are sourced from a limited group of third-party suppliers giving rise to supplier concentration risks. The company has procured 86.08%, 87.68% and 95.18% of its raw material from top 10 suppliers in FY25, FY24 and FY23 respectively. Any restrictions in supply or defects in quality could cause delays in project construction or implementation and impair its ability to provide its services to customers at a price that is profitable to it, which could have a material adverse effect on its business, financial condition and results of operations.
Outlook
Mittal Sections is engaged in the manufacturing of basic iron and steel products. The company is a manufacturer of mild steel sections and structural steel products, including MS flat bars, round bars, angles, and channels, offering a wide range of high-quality solutions. The company’s manufacturing plants are strategically located, leading to cost efficiencies and a stable supply chain. On the concern side, the company may continue to derive a material portion of its revenue from its top five customers and its financial dependence on its top five customers poses a potential risk. A reduction in business from these top five customers or any other major clients could have negative implications for both its revenue and profitability. Moreover, the company’s revenues are highly dependent on its operations in geographical region of state of Gujarat. Any adverse development affecting its operations in this region could have an adverse impact on its business, financial condition and results of operations.
The company is coming out with a maiden IPO of 37,00,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 136-143 per equity share. The aggregate size of the offer is around Rs 50.32 crore to Rs 52.91 crore based on lower and upper price band respectively. On performance front, the revenue from operations decreased by Rs 2,461.89 lakh or 15.25%, from Rs 16,148.18 lakh in FY 2024 to Rs 13,686.29 lakh in FY 2025. The decline reflects softer demand and lower sales volumes, likely driven by weaker market conditions and reduced order flows compared to the previous year. Moreover, profit after tax (PAT) increased by Rs 171.79 lakh or 90.74%, from Rs 189.34 lakh in FY 2024 to Rs 361.13 lakh in FY 2025.
The company’s growth is the result of rise in its share of business with existing customers, acquiring new customers and its ability to respond to emerging industry trends towards steel and iron industries. It intends to be a cost-efficient steel manufacturer and penetrate deeper in its regional market to capture a higher share of its existing markets, resulting in higher margins due to lower transportation costs of supplying to its local customers and better logistics management. It intends to strengthen its relationships with its existing customers and explore opportunities to grow by expanding the production capacities in the array of products that it offers to its customers. Further, it intends to leverage its relationships with existing customers to increase its wallet share and repeat business with them as well as new business, and potentially become a key vendor for such customers for specific products.
