IPO closes on 1 Aug'25
M&B Engineering Ltd
Minimum Investment
₹ 14,630 / 38 shares
Grey market premium
₹ 55 (14% premium)
Our Verdict:
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- M&B Engineering Ltd (M&B) has posted strong earnings growth over the last three years, supported by industry-leading profit margins. The company maintains a healthy balance sheet with efficient cash conversion and a comfortable Debt-to-Equity ratio of 0.3x. Moreover, the Return ratios remain robust, indicating effective capital deployment and operational efficiency.
- On the valuation front, the IPO seems reasonably priced with a P/E multiple of 25x, aligning well with its financial performance. Furthermore, the grey market premium (GMP) points to a potentially positive listing on the bourses.
- Pre-Engineered Buildings (PEBs) are gaining popularity in India due to cost efficiency and faster project execution. The global PEB market is projected to grow at a CAGR of 9–10% and reach a size of $32–35 billion by CY29.
- Given the company’s robust growth trajectory, proven project execution, favourable industry outlook and solid order book, investors may consider subscribing to the IPO from a medium-to-long term perspective.
About the company
Founded in
16 Jun'81
Managing director
Chirag Patel, Malav Patel
- M&B specialises in PEBs and Self-Supported Steel Roofing solutions. It operates through two divisions: the ‘Phenix’ division, which handles PEBs and complex structural steel components with end-to-end services for industrial, infrastructure and commercial projects; and the ‘Proflex’ division, which focuses on self-supported steel roofing.
- M&B operates 2 manufacturing facilities—one in Sanand, Gujarat and another in Cheyyar, Tamil Nadu. Its total production capacity stands at 103,800 MTPA for PEBs and 1.8 million square meters annually for roofing systems. The Sanand facility is the only PEB plant in India certified by the American Institute of Steel Construction (AISC).
STRENGTHS
- Robust Financial Performance: M&B has demonstrated impressive growth from FY23 to FY25, with a CAGR of 6% in operating revenue, 38% in EBITDA and 53% in net profit.
- Superior Return Ratios: M&B maintains high operational efficiency, with Return on Equity (RoE) and Return on Capital Employed (RoCE) at 25% in FY25, outperforming its listed peers.
- Margin Expansion: Profitability has steadily improved, with the EBITDA margin rising to 12.78% and the net profit margin reaching 7.73% in FY25—positioning M&B ahead of its peers.
- Longstanding Client Relationships: M&B has served more than 2,000 customer groups across sectors such as general engineering, manufacturing, food & beverages, warehousing & logistics, power, textiles and railways. The clientele includes some prominent names, such as Adani Ports, Alembic Pharma, Intas Pharma, Tata Advanced Systems and Balaji Wafers. Customer loyalty remains high as repeat orders accounted for over 57% of revenues in FY25.
- Execution Track Record and Revenue Visibility: M&B has successfully executed over 9,500 projects to date and maintains robust industry relationships. As of June 30, 2025, it holds an order book of Rs 842.83 crore, which provides solid earnings visibility for the next 2-3 quarters.
RISK FACTORS
- Customer Concentration: In FY25, 57.32% of M&B’s consolidated revenue came from repeat customers, with the top 5 customer groups contributing 42.64%. A loss or reduction in repeat orders from these key clients could significantly impact the company’s business operations and financial health.
- Raw Material Dependence: Raw material costs form a major portion of M&B’s total expenses. In FY25, 82.69% of raw materials were sourced from the top 5 suppliers. Any disruption in availability or increase in prices could adversely affect the company’s business performance and cash flows. Additionally, the company’s reliance on a limited supplier base heightens this vulnerability.
- Losses in Subsidiary Operations: M&B’s subsidiary, Phenix Construction Technologies Inc, reported losses in both FY23 and FY24. Continued underperformance may materially and adversely affect M&B’s overall business outlook and financial condition.
- Low Capacity Utilization: M&B intends to expand its manufacturing capacity using proceeds from the offer, despite low utilization levels. While capacity utilization at the Sanand PEB plant stood at 63.27% in FY25, the Cheyyar facility operated at just 23.34%.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 650 crore
Fresh Issue
₹ 275 crore
OFS
₹ 375 crore
Price range
₹ 366 - 385
Lot size
38 shares
Issue Objective
The net proceeds from the fresh issue will be utilized towards:
- Funding capital expenditure for the purchase of equipment and machinery, building works, solar rooftop grid and transport vehicles at the manufacturing facilities;
- Investment in IT software upgradation;
- Repayment or prepayment of certain term loans availed by the company; and
- General corporate purposes.
Dates
Bidding open
30 Jul'25
Bidding close
1 Aug'25
Allotment date
4 Aug'25
Refund date
5 Aug'25
Listing
6 Aug'25
IPO Reservations
Qualified institutional buyers
>75%
Non-institutional investors
<15%
Retail individual investors
<10%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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