Has VMS TMT’s Revenue Declined by Nearly 12% Before IPO?
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Synopsis
VMS TMT's recent revenue decline raises questions ahead of its IPO launch. With a notable net profit increase despite falling sales, the company is gearing up for its public offering. Will this strategy pay off? Get ready for an insightful look at VMS TMT's financial maneuvering as they approach this pivotal moment.
Key Takeaways
- VMS TMT's revenue fell by 11.8% ahead of IPO.
- Net profit increased by 14.5% to Rs 15.4 crore.
- IPO launches on September 17, with subscription closing on September 19.
- Proceeds will largely be used to repay borrowings.
- 50% of shares reserved for retail investors.
Mumbai, Sep 12 (NationPress) The Gujarat-based manufacturer of steel bars, VMS TMT, has disclosed a 11.8% decline in its revenue just prior to its initial public offering (IPO).
As per its red herring prospectus (RHP), the company's revenue fell to Rs 770.2 crore for the financial year 2024–25 (FY25), compared to the previous fiscal year (FY24).
Interestingly, despite the revenue drop, the company’s net profit increased by 14.5% to Rs 15.4 crore during the same timeframe.
VMS TMT, known for producing thermo mechanically treated (TMT) steel bars under the Kamdhenu brand, has submitted its RHP to the Registrar of Companies and plans to initiate its IPO on September 17.
The IPO will entirely consist of a fresh issue of 1.5 crore equity shares, with all proceeds being directed to the company.
The anchor book for institutional investors will be available starting September 16, and the subscription period will conclude on September 19.
VMS TMT aims to utilize Rs 115 crore from the IPO proceeds to settle debts, while the remainder will be allocated for general corporate needs.
As of June, the company's total borrowings reached Rs 261.7 crore. The share distribution structure reserves 50% for retail investors, 30% for qualified institutional buyers, and 20% for non-institutional investors.
VMS TMT operates mainly in Gujarat, producing TMT bars from scrap and billets at its plant in Bhayla Village, Ahmedabad, which has a capacity of two lakh metric tonnes per year.
The IPO allotment is expected to be finalized by September 22, with a listing on the stock exchanges slated for September 24.
The company had initially submitted draft IPO documents to SEBI on March 27, which received clearance on July 21. Arihant Capital Markets is serving as the sole book-running lead manager for the offering.
Point of View
I see VMS TMT's dual narrative of declining revenue yet increasing profit as a fascinating case study. This juxtaposition could signal market resilience or deeper challenges within the steel industry. As the IPO approaches, stakeholders must remain vigilant and informed about the company's strategic moves and market conditions.
NationPress
09/11/2025
Frequently Asked Questions
What caused VMS TMT's revenue decline?
The decline in revenue appears to be a result of broader market conditions impacting sales, despite a rise in net profit which indicates effective cost management or increased efficiency.
When is VMS TMT's IPO scheduled?
The IPO is set to launch on September 17, 2023, with the subscription period closing on September 19.
How will VMS TMT use the funds from the IPO?
VMS TMT plans to use Rs 115 crore from the IPO proceeds to repay existing borrowings, with the remaining funds allocated for general corporate purposes.
What percentage of the shares is reserved for retail investors?
The issue structure reserves 50% of the shares for retail investors.
Who is managing the IPO for VMS TMT?
Arihant Capital Markets is acting as the sole book-running lead manager for the IPO.
