Bombay Coated & Special Steels Opens Rs 183 Crore IPO at 17x Earnings, With Debt Paydown the Main Use of Funds

Bombay Coated and Special Steels opened its initial public offering on Thursday, seeking Rs 183 crore through an issue made up entirely of new shares. The price band is Rs 78-82 per share and bidding closes on Monday, November 2. At the top of the band, the Mumbai-based company would be valued at about Rs 515 crore.

The pitch is a small, fast-growing supplier to India's appliance boom. The main question is whether thin margins and a stretched balance sheet justify the price.

What the company does

Incorporated in 2019, the company is a steel service centre. It buys steel coils and processes them through slitting, cut-to-length cutting, shearing and embossing into ready-to-use parts for original equipment manufacturers and original design manufacturers. Its customers include appliance and refrigeration makers such as Haier India, IFB Refrigeration, Dixon Electro, Amber Enterprises and Western Refrigeration. It also supplies the automotive, electrical equipment and general engineering sectors.

The customer base is widening: the company served 261 customers in FY26, up from 252 in FY25 and 225 in FY24. It operates across four industrial locations.

Offer structure

The issue covers about 2.23 crore new shares, with no offer for sale, so all of the money goes to the company. Investors must bid for at least 182 shares, about Rs 14,924 at the upper price. Half the issue is reserved for qualified institutional buyers, 35% for retail investors and 15% for non-institutional investors.

On the eve of the offer, the company raised Rs 54.10 crore from six anchor investors at Rs 82 a share, including IMAP India Capital Investment Trust, Aarth AIF Growth Fund and LRSD Capital. Smart Horizon Capital Advisors is the sole book-running lead manager and KFin Technologies is the registrar.

About Rs 125 crore of the proceeds will go towards repaying borrowings. The rest will fund new processing equipment and general corporate purposes.

The financials: growth without margin

Revenue rose about 20% in FY26 to roughly Rs 1,267 crore, from Rs 1,056 crore a year earlier. Net profit grew far more slowly, by about 7% to Rs 30.54 crore from Rs 28.67 crore. EBITDA was about Rs 86 crore, a margin of under 7%, and net margin was below 2.5%. That is normal for steel processing, where the company earns a conversion spread rather than owning the steel's value, but it leaves little room for error if steel prices or customer demand swing.

The June 2026 quarter looked stronger. The company earned Rs 15.08 crore on revenue of Rs 397.55 crore, about half of last year's full-year profit in three months. Investors should be careful about treating that as a run rate. One quarter in a steel-linked business can be flattered by inventory gains when prices rise.

Valuation and the brokerage split

At Rs 82, the issue is priced at about 16.9 times FY26 earnings and 9.8 times EV/EBITDA, according to Anand Rathi. Listed peers vary widely: BMW Industries trades at about 15 times earnings, Manaksia Coated Metals at about 31 times and Shiv Aum Steels at nearly 99 times. That puts the IPO towards the lower end of the range, though above the closest scale peer.

Brokerages are divided. Anand Rathi recommends subscribing for the long term, citing industry tailwinds and a return on net worth of about 25%. BP Equities and Ventura also say subscribe. Arihant Capital is neutral and flags heavy dependence on the appliance segment. Marwadi Financial Services says avoid, pointing to low cash conversion, falling EBITDA and profit margins, and a valuation it considers expensive.

Key risks

The appliance concentration is the clearest risk. A slowdown in refrigerator or air-conditioner demand would hit volumes directly. High leverage is the second risk. The debt repayment should help, but the profit growth trend suggests interest costs and working capital have been absorbing much of the revenue gain. Grey-market quotes of about Rs 8-9 a share point to a modest listing premium, but these are unofficial and can change quickly.

This is an original summary based on public reporting. See our editorial policy for how we source, write, and correct our stories.