IPO closes on 19 Sep'25
VMS TMT Ltd
Minimum Investment
₹ 14,850 / 150 shares
Subscribe for listing gains
- VMS TMT Ltd (VMS) has exhibited a mixed financial performance over the past three fiscal years. While revenue has shown a continuous decline, the company has recorded strong earnings growth and boasts an industry-leading Return on Net Worth (RONW).
- In terms of valuation, the IPO appears reasonably priced with a Price-to-Earnings (PE) multiple of 23x based on FY25 earnings.
- VMS is strategically positioned for regional expansion and margin improvement. However, its long-term success hinges on its ability to diversify geographically, strengthen its brand and enhance cash flow stability.
- Given the fair valuation and solid demand for the IPO, investors seeking listing gains may consider subscribing. For those with a longer-term investment outlook, it would be prudent to wait for a few quarters to evaluate the company's execution and financial performance before committing to an investment.
About the company
Founded in
9 Apr'13
Managing director
Varun Jain
- VMS specializes in the manufacturing of Thermo-Mechanically Treated (TMT) bars at its state-of-the-art facility located in Ahmedabad, Gujarat. TMT bars are high-strength reinforcement steel, renowned for their exceptional strength, ductility and corrosion resistance, making them a preferred choice in the construction industry.
- VMS boasts an annual installed capacity of 200,000 tonnes of TMT bars. These bars are distributed through a network of 3 distributors and 227 dealers, on a non-exclusive basis, as of July 31, 2025.
STRENGTHS
- Financial Performance: Despite a 6.5% CAGR decline in revenue, VMS has delivered robust growth in profitability, achieving a 44% CAGR in EBITDA and an impressive 87% CAGR in net profit from FY23 to FY25.
- Solid RoNW: VMS boasts a strong Return on Net Worth (RoNW) of 20.14%, distinguishing it from competitors. This signals not only profitability but also the company’s ability to generate substantial returns on its capital.
RISK FACTORS
- Client Concentration: VMS generates a substantial portion of its operating revenue from its top ten customers, accounting for 97.49% of revenue, with its largest customer contributing 30.19% of the revenue for the three months ending June 30, 2025. The loss or reduced purchases from any of these key customers could negatively impact the business and financial performance.
- Geographic Concentration: VMS' manufacturing facility and sales are heavily concentrated in Gujarat, which accounted for 98.93% of revenues during the three-month period ending June 30, 2025 and 96.71% in FY25. Any significant disruption in the region—whether social, political, economic or seasonal—could materially affect the business, operations and financial stability.
- Declining Topline Growth: VMS has seen a continuous decline in revenue, dropping from Rs 882.05 crore in FY23 to Rs 771.4 crore in FY25. This decline reflects ongoing challenges in revenue generation and raises concerns about the company’s ability to drive growth in the near future.
- Increased Borrowings: VMS' borrowings have risen significantly, from Rs 162.7 crore in FY23 to Rs 275.7 crore in FY25, raising concerns over financial leverage. The firm’s Debt:EBITDA ratio stood at 15.87% as of June 30, 2025, while its Debt:Equity ratio was 3.78%, indicating substantial debt levels and significant financial obligations. Inability to meet these obligations may restrict business opportunities and negatively affect the company’s financial condition, results of operations and cash flows.
- Cash Flow Challenges: VMS has reported negative operating cash flows for the three-month period ending June 30, 2025, as well as in all three of the preceding fiscal years. Continued negative cash flows could strain liquidity, increase dependence on external financing, and jeopardize the company's financial stability and business continuity.
- Decline in Production: VMS’ annual production has dropped from 1,61,807 MT in FY23 to 1,26,065 MT in FY25, resulting in capacity utilization falling to 63.03% from 80.90%. This under-utilization of manufacturing capacity, coupled with an inability to effectively leverage its expanded facilities, may negatively affect future business prospects and financial performance.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 148.50 crore
Fresh Issue
₹ 148.50 crore
OFS
₹ -
Price range
₹ 94 - 99
Lot size
150 shares
Issue Objective
The net proceeds from the fresh issue will be utilised for the following purposes:
- Repayment/ prepayment of certain borrowings availed by the company; and
- General corporate purposes.
Dates
Bidding open
17 Sep'25
Bidding close
19 Sep'25
Allotment date
22 Sep'25
Refund date
23 Sep'25
Listing
24 Sep'25
IPO Reservations
Qualified institutional buyers
<30%
Non-institutional investors
>20%
Retail individual investors
>50%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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