M P K Steel BSE SME IPO review

•    The company is engaged in manufacturing and marketing specialized general purpose structural steel products. 
•    The company marked steady growth in its top and bottom lines for the reported periods.
•    With product mix and cost-effective process, it has managed to earn higher margins.
•    Based on recent set of financial data, the issue appears fully priced.
•    Well informed/cash surplus investors may park funds for medium to long term.

ABOUT COMPANY:
MPK Steels (I) Ltd. (MSIL) is a manufacturer of general-purpose structural steel products, specializing in providing high-quality solutions for a wide range of industries such as Railways, Telecom Industries, State Electricity Boards, Power & Energy Industries, Automotive Industry, Offshore Structures, Construction Industries, Fabrication Industries, Auto Body Builders, Infrastructural Development Authorities. Over a period of time the Company has adopted energy-efficient and resource efficient production technology which also helped reducing its impact on the environment, while still making sure its products are strong, reliable, and meet the needs of its customers.

The company’s growth is driven by its use of efficient processes and a commitment to meeting customer needs through reliable and consistent product quality. By utilizing the technology, M P K has been able to streamline its manufacturing processes, enhance product quality, and improve overall efficiency. Additionally, the company places great importance on understanding and addressing the needs of its customers, which has helped it build a good reputation within the industry.

The company is well-equipped to manufacture and trade a wide range of structural steel products, including M.S. Channel, M.S. Joist/Beam, M.S. Angle, M.S. Square Bar, M.S. Round Bar, and M.S. Flat where M.S. Channels generate the majority of its revenue and play a pivotal role in driving the success of business. The M.S. Channels MSIL produce are widely used in several sectors for structural support and load-bearing applications. They are particularly important in the construction industry, where they serve as beams, frames, and supports for buildings, bridges, and other infrastructure projects. Additionally, M.S. Channels are commonly used in power and energy industries for the construction of power plants, substation structures, and electrical frameworks. 

In the railway sector, especially with organizations like CORE (Central Organization for Railway Electrification), M.S. channels are used for building railway electrification structures and other railway-related infrastructure. Its M.S. Channels also play an important role in the fabrication industry, were they are used for creating custom frameworks, machinery, and heavy-duty structures. Rajasthan has the lion shares in its total revenue.

The company focuses on ensuring that products meet high-quality standards and are thoroughly inspected and tested to ensure they are free from defects and function as intended. MSIL follows strict parameters for product evaluation to provide reliable and durable steel products that support the needs of clients in their important projects. As of September 15, 2025, it had 79 employees on its payroll.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO of 3258000 equity shares to mobilize Rs. 25.74 cr. at the upper cap. It has announced a price band of Rs. 75 – Rs. 79 per share of Rs. 10 each.  The IPO opens for subscription on September 26, 2025, and will close on September 30, 2025. The minimum application to be made is for 3200 shares and in multiple of 1600 shares thereon, thereafter. Post allotment, shares will be listed on BSE SME. The issue constitutes 32% of post-IPO paid-up equity capital of the company. From the net proceeds of the issue, the company will utilize Rs. 9.18 cr. for working capital, Rs. 2.65 cr. for capex on purchase of machinery and dies, Rs. 7.00 cr. for capex on installation of solar plant, and the rest for general corporate purposes.

The IPO is solely lead managed by Gretex Corporate Services Ltd., while Maashitla Securities Pvt. Ltd. is the registrar to the issue. GRETEX group’s Gretex Share Broking Pvt. Ltd. is the market maker, as well as a syndicate member. 

The company has issued initial equity shares at par, and issued further equity shares in the price range of Rs. 50.00 – Rs. 200.00 per share between April 2006, and March 2013. It has also issued bonus shares in the ratio of 1 for 1 in March 2025. The average cost of acquisition of shares by the promoters is Rs. NA, Rs. 3.44, Rs. 3.50, Rs. 4.65, and Rs. 17.78 per share. 

Post-IPO, company’s current paid-up equity capital of Rs. 6.92 cr. will stand enhanced to Rs. 10.18 cr. Based on the upper price band of the IPO, the company is looking for a market cap of Rs. 80.43 cr. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit, of Rs. 138.85 cr. / Rs. 1.81 cr. (FY23), Rs. 189.17 cr. / Rs. 3.11 cr. (FY24), Rs. 208.03 cr. / Rs. 6.05 cr. (FY25). The company posted steady growth in its top and bottom lines for the reported periods. 

For the last three fiscals, the company has reported an average EPS of Rs. 6.43, and an average RoNW of 20.19%. The issue is priced at a P/BV of 2.26 based on its NAV of Rs. 35.00 as of March 31, 2025, but its post-IPO NAV data is missing from the offer documents.

If we attribute its FY25 super earnings on post-IPO expanded equity base, then the asking price is at a P/E of 13.28, and based on its FY24 earnings, the P/E stands at 25.90. Thus, the issue appears fully priced.

The company has posted PAT margins of 1.31% (FY23), 1.67% (FY24), 2.93% (FY25), and RoCE Margins of 5.47%, 8.93%, 19.32%, respectively for the referred periods. 

DIVIDEND POLICY:
The company has not declared any dividends for the reported periods of the offer document. It will adopt a prudent dividend policy, based on its financial performances and future prospects.

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown Rathi Bars, Mangalam World, as its listed peers. They are currently trading at a P/E of 14.3 and 21.2 (as of September 26, 2025). However, they are not truly comparable on an apple-to-apple basis. This comparison appears to be an eyewash.

MERCHANT BANKER’S TRACK RECORDS:
This is the 23rd mandate from Gretex Corporate in the last three fiscals (including the ongoing one). Out of the last 10 listings, 2 opened at discount and the rest with premium ranging from 0.04% to 22.81% on the date of listing. The LM has average track record.