Behari Lal Engineering coming with IPO to raise Rs 306.42 crore

Behari Lal Engineering

• Behari Lal Engineering is coming out with a 100% book building; initial public offering (IPO) of 1,07,51,735 shares of face value Rs 10 each in a price band Rs 271-285 per equity share. 
• Not more than 50% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 35% for the retail investors.
• The issue will open for subscription on August 12, 2026 and will close on August 14, 2026.
• The shares will be listed on BSE as well as NSE.
• The face value of the share is Rs 10 and is priced 27.10 times of its face value on the lower side and 28.50 times on the higher side.
• Book running lead managers to the issue are Emkay Global Financial Services and Systematix Corporate Services.
• Compliance officer for the issue is Sanjeev Kumar Sehgal. 

Profile of the company

Behari Lal Engineering is an integrated iron and steel manufacturing company specializing in customized engineering solutions. Its precision-engineered components for critical industrial applications comprise metal rolls, engineering castings, alloy steel products, forging ingots, and forged shafts/blocks. With decades of experience in the steel industry, it has over the years honed its product development capabilities which combined with a modern and fully integrated digital steel melting shop with ladle refining furnace (LRF), vacuum degassing (VD), foundry, heat treatment, machine shops, rolling mills and a skilled workforce, enable it to provide customized components tailored to meet the specific needs of its customers. Its precision engineered products find application across diverse industries such as automobile, steel, mining, infrastructure and construction, power, aerospace and defence and cement.

Its ability to deliver high precision customised engineered components is enabled by its focus on technology and strong product development team. Its products are manufactured using technologically advanced machines such as computer numerical control (CNC) Lathes, Heavy Duty All Geared Lathes, Boring Machines, CNC Boring Machine, Roll Grinding Machines, Vertical Turning Lathe (VTL), CNC VTL, Radial Drills, Plano Milling Machines and CNC Vertical Milling Machines. Its manufacturing facilities are equipped with sophisticated equipment and machinery that enables it to produce high quality products and manufacture customised product as per the requirements of its customers. Its customised engineering products include metal rolls, engineering castings, and alloy steel products.

Proceed is being used for: 

• Funding capital expenditure requirements for: (i) the purchase and installation of new equipment / machinery (including computers, printers, and computer peripherals), along with civil work for such installation, at Village Salani, Punjab (Manufacturing Facility 1); (ii) the purchase and installation of new roof top solar panels at Manufacturing Facility 1; (iii) the purchase and installation of new equipment / machinery, along with civil work for such installation, at Village Turan, Punjab (Manufacturing Facility 2); and (iv) the purchase and installation of new rooftop solar panels at Manufacturing Facility 2.
• Repayment and/ or pre-payment, in full or part, of certain borrowings availed by the company
• General corporate purposes

Industry overview

The Indian steel industry witnessed a steady uptrend in demand, with consumption growing from around 100 million tonne (MT) in fiscal 2020 to around 169 MT in fiscal 2026. This translates to a CAGR of 9.1% over the period. The key drivers of this growth were the automotive and infrastructure sectors, which logged significant expansion and development. Steel is an alloy primarily composed of iron and carbon, with small amounts of other elements. It is one of the most versatile and widely used materials globally due to its strength, durability and recyclability. The steel industry plays a critical role in economic development, supporting the infrastructure, construction, automotive and manufacturing sectors. It can be classified into crude steel, semi-finished steel and finished steel.  

India's alloy steel production witnessed robust growth from FY2020 to FY2024, with a Compound Annual Growth Rate (CAGR) of 21%. Looking forward to FY30, India's alloy steel market is poised for significant growth, with alloy long steel consumption projected to increase at a CAGR of 5-7% and alloy flat steel expected to grow at a higher CAGR of 8.5-10.5%. India's metal rolls demand saw a robust growth of 7.9% (CAGR) over fiscals 2020-2024. It is projected to increase at a CAGR of around 8-10% during fiscals 2024-2030 and reach around 132-160 KT in fiscal 2030. The castings demand in India stood at 10.3 million tons during fiscal 2020 and reached around 13.5 million tons during fiscal 2024, registering a CAGR of 6.9%.

The Indian government has introduced the PLI Scheme 1.1 to increase the production of specialty steel. This initiative focuses on five product categories: coated/plated steel products, high strength/wear resistant steel, specialty rails, alloy steel products and steel wires, and electrical steel. It aims to promote high-value steel manufacturing, reduce import dependence and strengthen India's position as a global steel powerhouse. The government also aims to attract investments and generate employment in the steel sector through this route.

Pros and strengths 

Long standing relationships with large number of customers: Over its decades of operations, it has offered several precisions engineered components to a large number of customers. Its wide product basket and customised engineered components enable it to service a broad spectrum of customers and are key to its ability in maintaining long term relationships with its customers. During Fiscal 2025, Fiscal 2024 and Fiscal 2023, 378 customers, 366 customers and 270 customers, respectively, were repeat customers. Its long-standing relationship with customers which forms the bedrock of its growth is further demonstrated by the fact that a number of customers have been associated with the company for over a decade.

Diversified product portfolio catering to varied application industries: Its diversified product portfolio is broadly classified into the four categories viz., Metal Rolls, Engineering Castings, Alloy Steel Products and Forging Ingots and Forged shafts/blocks and its precision engineered products find application in over 10 industries including aerospace and defence, aggregate crusher manufacturing, automobile, cement, defence, engineering, finished steel manufacturing, infrastructure, power and railways. It has a diverse product portfolio and it has the ability to manufacture a vast array of products with the ability to customise products in accordance with the requirement of customers.

Strategically located manufacturing facilities with advanced equipment: Its manufacturing facility comprises 2 manufacturing units in Mandi Gobindgarh, Punjab which are spread across 790,000 square feet with a combined installed capacity of 119,464 MT, comprising finished steel processing capacity of 54,464 MT and rolling mill capacity of 65,000 MT. Mandi Gobindgarh, where the company's manufacturing facilities are strategically situated is one of India’s oldest steel manufacturing hubs and is renowned for its steel production capabilities. This location offers seamless connectivity through major highways, ensuring quick and efficient transportation of goods and raw materials. Furthermore, the facility's proximity to key transportation infrastructure, including dry ports and an international airport. Its manufacturing facilities are equipped with advanced capabilities to design, develop and manufacture its product portfolio. Its manufacturing facilities are equipped with sophisticated equipment and machinery that enables it to produce high quality products and meet specific product requirements of its customers.

Robust presence in the steel manufacturing industry: The company commenced its journey in the steel industry in 1995 as a steel trader and, subsequently, established itself as a steel manufacturer. Its experience of over 2 decades in the steel industry has helped it develops robust manufacturing processes which regularly withstand the inspections conducted by, and the scrutiny, of its discerning customers. Its rich legacy and experience in the Indian steel industry have enabled it to cater to various prominent customers including some of India’s most prominent steel manufacturers. Its experience in the industry has also enabled it to adapt its processes to the evolving customer requirements and has enabled it to clear rigorous audits and testing protocols of customers.

Risks and concerns

Heavy reliance on top 10 customers: The company generates significant revenues from its top 10 customers, and in Fiscals 2026, 2025 and 2024, revenue from its top 10 customers constituted 38.00%, 39.91% and 37.81% respectively, of its revenue from operations. It does not enter into long term contracts with its customers and the loss of such customers or a significant reduction in its revenue from such customers will have a material adverse impact on its business and financial condition.

Automobile industry accounts for significant share of revenue: The company caters to a wide array of end-user industries including aerospace and defence, aggregate crusher manufacturing, automobile, cement, defence, engineering – industrial equipment, finished steel manufacturing, infrastructure, power and railways. The company is heavily reliant on its largest industry segment, i.e., automobiles, which contributed 38.65%, 48.75% and 55.61% of revenue from operations in Fiscal 2026, Fiscal 2025, and Fiscal 2024, respectively. If its revenue from the automobile industry continues to reduce and if it is unable to off-set it with revenues from other industries, its financial condition, business and growth prospects could be adversely affected.

Significant dependence on alloy steel products: The company is heavily reliant on its alloy steel products. Its alloy steel products contributed 45.81%, 50.84% and 51.06% of revenue from operations in Fiscal 2026, Fiscal 2025, and Fiscal 2024, respectively. If there is decrease in demand for alloy steel products, metal rolls and engineering castings segments including as a consequence of its customers or the industries in which such customers operate moving away from or preferring to use other products, its revenue from operations and financial condition could be adversely affected. Further, while it would seek to increase the manufacturing of products in its other business segments it cannot assure that such orders will be of sufficient quantity or of sufficient value to offset the loss of business from alloy steel products.

Risk of disruption in raw material supply: Its manufacturing process requires a large number of raw materials. Some of its key raw materials are scrap and ferro alloy i.e. iron combined with other metals and ingots. The other raw materials used in its manufacturing process include billets and sand. It procures these raw materials from third party suppliers. Additionally, it does not enter into long term contracts or other arrangements with the suppliers of its raw materials and rely on purchase orders which are placed as required. While there are a number of suppliers of raw materials it, generally, procure its raw materials from select suppliers with whom it has worked in the past and who have provided it raw materials of acceptable quality at commercially viable rates. Therefore, failure to ensure a steady supply of quality raw materials at commercially acceptable rates could have an adverse impact on its business, results of operations and financial condition.

Outlook

Behari Lal Engineering is engaged in the business of manufacturing and trading of Iron and Steel products such as Ingot, Steel Casting, Metal Rolls and Alloy and Non-Alloy Round, Flat, Hex and Square etc. Its products are manufactured using technologically advanced machines such as CNC Lathes, Heavy Duty All Geared Lathes, Boring Machines, CNC Boring Machine, Roll Grinding Machines, VTL, CNC VTL, Radial Drills, Plano Milling Machines and CNC Vertical Milling Machines On the concern side, its success depends on its continuing relationship with its customers and it derives a significant majority of its revenue from repeat customers. In Fiscals 2026, 2025 and 2024, revenue from repeat customers constituted 84.69%, 86.10% and 80.04%, respectively, of its revenue from operations. Loss of one or more of its repeat customers or reduction in their demand for its offerings could adversely affect its business, results of operation and financial conditions.

The issue has been offering 1,07,51,735 shares in a price band of Rs 271-285 per equity share. The aggregate size of the offer is around Rs 291.37 crore to Rs 306.42 crore based on lower and upper price band respectively. Minimum application is to be made for 52 shares and in multiples thereon, thereafter. On performance front, its total income increased by 5.85% from Rs 5,162.99 million in Fiscal 2025 to Rs 5,465.19 million in Fiscal 2026. Its profit after tax increased by 22.07% from Rs 529.51 million in Fiscal 2025 to Rs 646.36 million in Fiscal 2026.

Meanwhile, it aims to expand its production capacity to meet the increasing demand for its products. By doing so, it will be able to take advantage of economies of scale, broaden its geographic reach, and provide its customers with unique and value-added products and services. It is confident that its industry has significant growth potential, and it is well-positioned to capitalize on the opportunities that the market presents. To drive innovation and stay ahead of the competition, it will continue to leverage its design capabilities and manufacturing expertise to develop cutting-edge products. This will not only help it reduces production costs but also enable it to expand its customer base and establish a stronger presence in new markets.