VMS TMT IPO: Should Investors Look at This Gujarat-Focused Steel Maker?

VMS TMT Limited, a Gujarat-based TMT bar manufacturer, has launched its ₹148.5 crore IPO between September 17–19, 2025. The issue is entirely a fresh issue, priced at ₹94 to ₹99 per share, with a lot size of 150 shares. The GMP is quoting at ₹23, suggesting nearly a 23% listing gain over the issue price, which indicates strong initial momentum but also shows that expectations are already high.

In this blog, we break down the IPO; you’ll learn what the company does, why it is raising money, its strengths and risks, how it fares against peers, its valuation, leadership background, and the larger industry view, to help investors make an informed decision.

IPO Overview

• IPO Date: September 17 to September 19, 2025
• Total Issue Size: ₹148.5 crore
• Price Band: ₹94 to ₹99 per share
• Lot Size: 150 Shares
• Tentative Allotment Date: September 22, 2025
• Listing Date: September 24, 2025 (Tentative)
• GMP: The GMP for VMS TMT IPO is ₹23, reflecting a 23% gain over the issue price, according to Chittorgarh.com (as of September 17).
  Disclaimer: GMP is an unofficial indicator and is subject to market volatility.

How Does VMS TMT Make Money?

VMS TMT makes Thermo Mechanically Treated (TMT) Bars, which are used to strengthen buildings and other infrastructure. These steel bars make up 95.99% of the company’s revenue. It also sells other steel products like billets (raw semi-finished steel), binding wires, and scrap, but it is a very small part of the business.

The company has a single large manufacturing facility in Ahmedabad, Gujarat, with a production capacity of 200,000 metric tons per year. It markets its entire range of TMT bars under the “Kamdhenu Brand” through a non-exclusive license agreement. Sales are highly concentrated in Gujarat-98.93% of revenue in Q1 FY25 came from the state itself.

Distribution is handled through a network of 3 distributors and 227 dealers, supported by 50+ third-party trucks for delivery, which allows doorstep service for both retail and institutional buyers.

Objectives of the IPO

The company is raising ₹148.5 crore purely through a fresh issue. The funds will go here:

• ₹115 crore to repay loans, which will reduce interest burden and improve the balance sheet.
• Remaining proceeds will go towards general corporate purposes such as working capital, new initiatives, and operational needs.

Strengths:

• Net profit rose sharply from ₹4.2 crore in FY23 to ₹14.74 crore in FY25.
• Debt-to-equity improved from 5.28x in FY23 to 3.78x in Q1 FY25. Repayment from IPO money will cut debt further.
• Strong distribution in Gujarat with 3 distributors and 227 dealers with integrated logistics.
• The new Continuous Casting Machine (since 2024) helps save costs and reduces dependency on vendors.
• High RoNW (Return on Net Worth): At 20.14% in FY25, it did better than peers like Kamdhenu (18.82%) and Vraj Iron and Steel (10.88%).

Risks:

• Almost all sales are in Gujarat. Any slowdown in the state could hit revenues badly.
• 100% of TMT bar sales are tied to the Kamdhenu brand; loss of this license could cripple business.
• Even after some reduction, leverage at 3.78x is still high, which makes it a debt heavy company.
• Revenue dropped from ₹882 crore in FY23 to ₹770 crore in FY25.
• EBITDA margin at 5.9% is much lower than peers like Kamdhenu (10%) or BMW Industries (21%).
• Despite profits, it burned cash in FY23 and FY25, reporting negative operating cash flows.
• Capacity utilization fell from 80.9% in FY23 to 63% in FY25, showing demand or execution challenges.

For detailed information, visit VMS TMT’s IPO page.

Peer Comparison

Source: RHP, internal calculation

VMS TMT’s income size matches peers, but margins and profits lag significantly. What stands out is its high P/E ratio (33x) compared to an industry average of 9–16x, which makes it look expensive.

IPO Valuation

At the upper band of ₹99, the post-issue market cap will be ₹491.3 crore. Based on FY25 earnings, the P/E is 33x, much higher than listed peers (Kamdhenu 13.5x, Vraj Iron 11.8x, BMW 16.6x). Investors are paying a steep premium for a smaller, debt-heavy company with weaker earnings.

Disclaimer: The P/E ratio here is calculated using the company’s post-IPO equity and its most recent FY25 net profits at the upper end of the price band.

Who’s Leading VMS TMT?

The promoters, Varun Manojkumar Jain, Rishabh Sunil Singhi, Manojkumar Jain, and Sangeeta Jain, hold over 96% of the company pre-IPO. Collectively, they bring more than 30 years of experience in steel, business, and finance.

• Varun Jain (CMD) is a B.Com graduate who later trained at ISB. He has around eight years of steel industry experience, along witha compliance background from ICAI.
• Rishabh Singhi (Whole-Time Director) is a B.Tech (Civil) graduate, relatively young in the business with three years of experience, but brings a technical outlook.
• Manojkumar Jain (Non-Executive Director) is a Chartered Accountant with over 22 years of experience across shipbreaking, steel, and automobiles.
• Sangeeta Jain (Promoter) brings over 30 years of experience in administration; though not active in daily operations, she remains a promoter.

The management team also includes finance veteran Vikram Patel (CFO) and multiple independent directors, though governance questions linger since one independent director is named in an ongoing NCLT petition unrelated to VMS TMT.

Industry Outlook

The TMT bar industry is linked directly to construction and infrastructure. India’s focus on ₹10 lakh crore investments for expanding crude steel capacity and real estate growth at 20%+ CAGR will create consistent demand. Urban expansion into tier-2 and tier-3 cities also supports long-term steel demand.

However, raw material cost volatility and intense competition keep margins thin. Larger players with pan-India presence, like Tata Steel, enjoy stronger economies of scale compared to regional players like VMS TMT.

Analyst View

VMS TMT brings a strong regional presence and improving efficiency with backward integration, but risks from high debt, brand dependence, falling topline, and negative cash flows cannot be ignored. While GMP indicates near-term listing gains, the valuation is stretched when compared to peers who have stronger margins and healthier balance sheets.

For investors, this IPO looks more like a short-term listing opportunity rather than a long-term wealth creator-unless the company shows consistent revenue growth beyond Gujarat and stronger cash flow discipline.

How to Apply for an IPO on INDmoney?

1. Download the INDmoney app and complete your KYC.
2. Go to INDstocks → IPO, or just search “IPO”.
3. Tap on an IPO from the list of live IPOs.
4. View key details like price band, lot size, and dates.
5. Tap Apply Now and choose the number of lots.
6. Use INDpay UPI for instant mandate tracking.
7. Your funds will be blocked until the share allotment is finalized.

For more details, visit the INDmoney IPO page.

Disclaimer

Source: VMS TMT's RHP. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Please be informed that merely opening a trading and demat account will not guarantee investment in securities in the IPO. Investors are requested to do their own independent research and due diligence before investing in an IPO. Please read the SEBI-prescribed Combined Risk Disclosure Document prior to investing. This post is for general information and awareness purposes only and is nowhere to be considered as advice, recommendation, or solicitation of an offer to buy or sell, or subscribe for securities. INDstocks is acting as a distributor for non-broking products/services such as IPO, Mutual Fund, and Mutual Fund SIP. These are not exchange-traded products. All disputes with respect to the distribution activity would not have access to the Exchange investor redressal forum or the Arbitration mechanism. INDstocks Private Limited (formerly known as INDmoney Private Limited) does not provide any portfolio management services, nor is it an investment adviser. Logos above are the property of respective trademark owners, and by displaying them, INDstocks has no right, title, or interest in them. SEBI Stock Broking Registration No: INZ000305337, Trading and Clearing Member of NSE (90267, M70042) and BSE, BSE StarMF (6779), SEBI Depository Participant Reg. No. IN-DP-690-2022, Depository Participant ID: CDSL 12095500, Research Analyst Registration No. INH000018948 BSE RA Enlistment No. 6428.