VMS TMT IPO opens for subscription; GMP at 23%. Should you apply?

Ahmedabad-based VMS TMT has opened its Rs 149 crore IPO for subscription on Wednesday, aiming to expand its footprint in the fast-growing steel sector. The book-built issue, priced in the band of Rs 94–99 per share, will close on Friday. The IPO comes amid robust investor appetite for primary issues, following more than 40 recent listings.

The GMP for VMS TMT currently stands at 23%, indicating investor expectations of a healthy listing pop if market momentum sustains.

VMS TMT IPO details

The company is offering a fresh issue of 1.5 crore equity shares, aggregating up to Rs 148.5 crore at the upper end of the price band. Investors can bid for a minimum of 150 shares and in multiples thereafter, translating into a retail investment of Rs 14,850 at the top price.

About half of the issue is reserved for qualified institutional buyers (QIBs), 35% for retail investors, and the balance for non-institutional investors (NIIs). Shares are scheduled to be listed on both NSE and BSE on September 24.

About the company

VMS TMT manufactures Thermo Mechanically Treated (TMT) bars used widely in construction and infrastructure projects. The company also sells billets, binding wires, and scrap, but derives nearly 95% of its revenue from TMT bars. Its plant, located in Bhayla village near Ahmedabad, has an installed capacity of 2,00,000 metric tonnes annually.
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The company markets its products under the Kamdhenu brand in Gujarat (excluding Saurashtra and Kutch) through a network of three distributors and 227 dealers. To strengthen margins and reduce reliance on billet suppliers, VMS recently integrated a continuous casting machine (CCM) division, allowing it to produce TMT bars from scrap.

Financials

VMS reported revenue of Rs 771 crore in FY25, down from Rs 873 crore in FY24. However, profitability has improved, with profit after tax rising from Rs 4.2 crore in FY23 to Rs 14.7 crore in FY25. Margins have also expanded, with EBITDA margin improving to 5.9% in FY25 from 2.5% in FY23.

For the three months ended June 30, 2025, the company posted revenue of Rs 213 crore, EBITDA of Rs 19.5 crore, and net profit of Rs 8.6 crore.

Objects of the issue

Proceeds from the IPO will be primarily used to prepay or repay borrowings worth Rs 115 crore, with the remainder earmarked for general corporate purposes.

Should you subscribe?

Analysts recommended subscribing to this IPO with a long term view only as the issue appears aggressively priced. "The company has demonstrated healthy profitability, driven by consistent operational excellence and a solid distribution network in Gujarat, amid rising construction activity, the company is well positioned to leverage strong demand across sectors," said Kunvarji Wealth Solutions.

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