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VMS TMT Limited IPO 2025: Detailed Review, Financials, and Key Insights
The VMS TMT Limited IPO is one of the upcoming offerings in the Indian stock market that has caught investor attention. The company is raising ₹148.5 crore through a fresh issue, which means all funds raised will be used directly for business growth. The IPO price band is set at ₹94–₹99 per share with a face value of ₹10 per share. Retail investors can apply with a lot size of 150 shares, which translates to a minimum investment of ₹14,100 at the lower end and ₹14,850 at the upper end. The IPO closes on September 19, 2025, with allotment on September 22, 2025, and listing on NSE and BSE from September 24, 2025.
Out of the total proceeds, ₹1.5 crore will be used for debt repayment, while the remaining funds will support general business requirements.
VMS TMT Limited is a significant player in the Indian iron and steel sector, primarily focused on manufacturing TMT bars. These bars are known for their strength, flexibility, and corrosion resistance, making them a critical component in the construction and infrastructure sectors.
The company operates its manufacturing facility near Ahmedabad, Gujarat, and generates nearly all of its revenue from TMT bar sales—95.99% in Q1 FY26, consistently above 90% in previous years. Other products like scrap, billets, and binding wires contribute minimally, with occasional fluctuations.
VMS TMT has an annual production capacity of 200,000 metric tons for TMT bars and 26,000 metric tons for billets. In September 2024, the company achieved backward integration, allowing it to manufacture TMT bars directly from scrap. This reduces dependence on external suppliers and improves operational efficiency, potentially enhancing margins.
Published September 20, 2025.
Strengths of VMS TMT Limited
VMS TMT Limited demonstrates several strengths that make it a noteworthy player in the TMT segment:
Strategic Location Advantage – The plant is located near Ahmedabad, which is ideal for sourcing raw materials like scrap and for transportation, reducing freight costs and improving margins.
Partnership with Kamdhenu Limited – The company sells TMT bars under the Kamdhenu Nxt brand, gaining instant market recognition and saving significant marketing expenditure.
Strong Production Capacity & Utilization – With 80% utilization in FY24 and 71% in Q1 FY25 for TMT bars, and 87% utilization for billets in Q1 FY26, the company efficiently uses its installed capacity.
Backward Integration – Since September 2024, the company can directly produce TMT bars from scrap, reducing raw material dependency and improving cost efficiency.
Financial Momentum – EBITDA margins improved from 2.48% in FY23 to 5.91% in FY25, while PAT margins rose from 0.48% to 1.91%, reflecting better expense management.
Strong Distribution Network – With 3 distributors and 227 dealers as of July 2025, VMS TMT has solid market penetration and customer reach.
Weaknesses and Risks of VMS TMT Limited
Despite its strengths, investors should carefully consider the following weaknesses:
High Geographical Concentration – Nearly 98% of revenue comes from Gujarat. Any adverse events in the state, like floods or political changes, could significantly impact the company.
Customer Concentration Risk – The top 10 customers contribute 97.5% of revenue, with the largest customer alone contributing 28–30%. Lack of long-term contracts increases demand and pricing volatility risks.
Supplier Concentration Risk – 57% of purchases come from the top 10 suppliers, exposing the company to raw material price volatility and potential margin pressure.
Razor-Thin Margins – PAT margin in FY25 was only 1.91%, leaving little buffer against rising costs or competitive pressures.
Heavy Debt Burden – Debt-to-EBITDA ratio stood at 6.06x in FY25, indicating financial risk. Even with ₹15 crore from the IPO allocated to repayment, debt remains substantial.
Limited Brand Recognition – The company relies on the Kamdhenu brand in Gujarat, with limited presence elsewhere.
Promoter Association Risk – Some promoter group membe
Financial Performance Overview
VMS TMT’s financials present a mixed picture:
Revenue Trend – Revenue declined from ₹882.01 crore in FY23 to ₹872.96 crore in FY24, and further to ₹770.19 crore in FY25, mainly due to lower sales volumes, price reductions, and falling exports. Q1 FY26 revenue stood at ₹222.6 crore.
Profitability – Despite declining revenue, profitability improved: PAT rose from ₹4.2 crore in FY23 to ₹14.74 crore in FY25, and EBITDA increased from ₹21.91 crore to ₹45.53 crore. EBITDA margin improved from 2.48% to 5.91%, spiking to 9.18% in Q1 FY26 due to cost control and efficiency measures.
Cost Structure – Raw material costs remain the largest expense (70–82%), making margins highly sensitive to fluctuations. Power and fuel costs have also risen sharply, from 1.59% in FY23 to 11.25% in Q1 FY26.
Cash Flow Challenges – Operating cash flows were negative at -₹17.94 crore in FY25 and -₹22.42 crore in Q1 FY26, with increasing trade receivables and declining inventory turnover affecting liquidity.
High Leverage – Total borrowings stood at ₹391.8 crore in Q1 FY26, with a debt-to-equity ratio of 3.78x and debt-to-EBITDA of 15.87x, highlighting financial stress.
Return Ratios – RONW fell from 20.14% in FY25 to 10.49% in Q1 FY26, and ROCE dropped from 12.79% to 4.52%, impacted by high debt and working capital requirements.
Peer Comparison
VMS TMT operates at a mid-scale in the TMT bars segment. FY25 revenue of ₹771 crore is comparable to Kamdhenu Limited but lower than diversified players like Electrotherm. While return ratios are decent, profitability lags peers due to thin margins and commoditized products. High leverage further limits financial flexibility compared to debt-free peers like Kamdhenu.
Conclusion: Should You Consider the VMS TMT Limited IPO?
The VMS TMT Limited IPO presents a mixed investment opportunity. On the positive side:
India’s infrastructure growth supports TMT demand.
The Kamdhenu partnership enhances brand presence in Gujarat.
Improving profitability indicates better cost and operational management.
However, there are significant risks:
Heavy reliance on Gujarat limits diversification.
Declining revenues and thin profit margins leave little cushion against market or cost pressures.
High debt and cash flow issues pose financial risks.
IPO valuation at ~22x earnings seems high compared to Kamdhenu’s 12x PE.
Investors should carefully study the RHP, evaluate risks, and consult financial advisors before making any investment decision.
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