Is VMS TMT's Revenue Decline a Cause for Concern?
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Synopsis
VMS TMT Limited, a Gujarat-based steel manufacturer, has reported a slight revenue decline in FY24, but its profitability has skyrocketed. The company is preparing for an IPO launch on September 17, aiming to address its borrowings while strategically planning for future growth.
Key Takeaways
- VMS TMT's revenue decreased by 1 per cent in FY24.
- Net profit surged by 221 per cent.
- IPO launching on September 17.
- Proceeds will help repay debt.
- Company operates in Gujarat.
Mumbai, Sep 12 (NationPress) The Gujarat-based manufacturer of steel bars, VMS TMT Limited, has disclosed a decrease in its revenue for the financial year ending March 31, 2024. The company reported revenue of Rs 872.95 crore, reflecting a 1 per cent drop from Rs 882.01 crore the previous year, according to its latest financial reports.
As outlined in its red herring prospectus (RHP), total income also declined by 1 per cent, amounting to Rs 873.16 crore compared to Rs 882.05 crore in the prior financial year.
Nevertheless, the steel bars manufacturer has experienced an impressive increase in profitability. The company’s net profit surged over three-fold, soaring 221 per cent to Rs 13.46 crore, up from Rs 4.19 crore in the last financial year.
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 is preparing to launch its IPO on September 17.
This public offering will consist solely of a fresh issuance of 1.5 crore equity shares, with all proceeds being directed back to the company.
The IPO anchor book for institutional investors is scheduled to open on September 16, and the subscription will close on September 19.
The company intends to allocate Rs 115 crore from the IPO proceeds to repay debt, while the remainder will be reserved for general corporate needs.
As of June, VMS TMT’s total borrowings amounted to Rs 261.7 crore. The allocation structure of the issue designates 50 per cent of shares for retail investors, 30 per cent for qualified institutional buyers, and the remaining 20 per cent for non-institutional investors.
VMS TMT operates chiefly in Gujarat, producing TMT bars from scrap and billets at its facility in Bhayla Village, Ahmedabad, which boasts an installed capacity of two lakh metric tonnes annually.
The IPO allotment is set to be finalized by September 22, with a planned listing on the stock exchanges on September 24.
The company initially filed draft IPO documents with SEBI on March 27, which received clearance on July 21. Arihant Capital Markets is serving as the sole book-running lead manager for this issue.
Point of View
It's essential to view VMS TMT's financial results with a balanced lens. While a revenue decline might raise alarms, the unprecedented growth in net profit showcases effective management and potential for future success. The company's forthcoming IPO could be a pivotal moment as they seek to stabilize and enhance their operations.
NationPress
13/09/2025
Frequently Asked Questions
What caused the revenue decline for VMS TMT?
The revenue decline of 1 per cent can be attributed to various market factors affecting the steel industry, which the company has acknowledged in its financial disclosures.
How much has VMS TMT's net profit increased?
VMS TMT's net profit surged by 221 per cent, reaching Rs 13.46 crore compared to Rs 4.19 crore in the previous year.
When is VMS TMT's IPO scheduled?
The IPO for VMS TMT is set to launch on September 17, with the anchor book opening on September 16.
What will the IPO proceeds be used for?
The company plans to utilize Rs 115 crore of the IPO proceeds to repay outstanding borrowings, while the rest will be allocated for general corporate purposes.
Where does VMS TMT operate?
VMS TMT primarily operates in Gujarat, manufacturing TMT bars at their plant located in Bhayla Village, Ahmedabad.
