Subscribe for Bombay Coated and Special Steels Ltd IPO; Anand Rathi

What happened

Anand Rathi recommends subscribing to the Bombay Coated and Special Steels Ltd IPO at the upper price band of ₹82 per share, valuing the company at 16.9x FY26 P/E and 9.8x FY26 EV/EBITDA, with a post-issue market capitalization of about ₹5,152 million.

Confirmed

Global impact / market context

The company sits between big steel makers and appliance manufacturers, turning steel coils into cut and shaped parts. That means its profit depends on processing fees per sale and steady orders from appliance and engineering customers, rather than on steel prices alone.

Analyst inference

Its valuation sits between listed peers: BMW Industries at 15.0x P/E and Manaksia Coated Metals at 31.0x P/E. That suggests investors are weighing steady appliance-sector demand against the risk that customers cut orders or push back on processing fees.

Analyst inference

What to watch

1. The company lists customers including Haier Appliances India, IFB Refrigeration, Dixon Electro Manufacturing, Amber Enterprises, Western Refrigeration, PG Technoplast, EPack Durable and Kruger Ventilation Industries, which shows a concentrated appliance and engineering customer base. Confirmed
2. Track how much of the IPO money goes into new steel processing lines and working capital, which is cash tied up in inventory and unpaid customer bills, because that spending decides future capacity and cash available. Proposed
3. Watch demand from home and commercial appliance makers and any pricing pressure on processing services, since weaker orders or lower fees per sale would directly reduce revenue and profit per sale. Analyst inference

Evidence

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