Kasturi Metal Composite IPO

The company operates in the steel fiber and construction materials segment, which is closely linked to infrastructure development, industrial construction, and real estate growth.

India’s push for infrastructure development, highways, smart cities, industrial corridors, and manufacturing expansion has increased demand for advanced construction materials such as steel fibers and reinforced concrete solutions.

The industry is moderately fragmented, with both organized and unorganized players. Competition is based on quality, pricing, delivery timelines, and customization capabilities.

Long-term growth prospects remain favorable due to government spending on infrastructure and private sector industrial investments.

The promoters of the company are:

• Samit Surendra Singhai

• Akash Surendra Singhai

• Surendra Fatechand Singhai

• Lata Surendra Singhai

They have several years of experience in the steel and construction materials industry. The promoter group provides strategic direction, oversees operations, and supports business expansion.

Their background and technical knowledge have played a key role in building the company’s manufacturing capabilities and customer base.

The company is led by an experienced management team:

• Chairman & Managing Director: Samit Surendra Singhai – responsible for production and overall operations.

• Whole-Time Director: Akash Surendra Singhai – handles sales, marketing, and customer relations.

• CFO: Pravin R. Kesharwani – manages finance and accounting.

• Company Secretary & Compliance Officer: Madhu Awasthi – oversees legal and regulatory compliance.

Senior management and skilled employees support daily operations, quality control, procurement, and logistics.

The company faces risks related to dependence on a limited number of suppliers for key raw materials such as low and medium carbon wire rods. Any disruption in supply or sharp increase in raw material prices could negatively impact margins and operations.

Its business is exposed to fluctuations in steel prices and overall construction and infrastructure demand. A slowdown in these sectors could reduce order volumes and revenue.

The company also carries risks associated with working capital intensity, as it must maintain inventories and provide credit to customers. Delays in receivables could strain cash flows.

Regulatory compliance, environmental norms, and taxation policies pose operational risks. Any non-compliance or adverse regulatory changes may lead to penalties or restrictions on operations.

Since this is the company’s first public issue, there is no prior trading history of its shares, and investors face uncertainty regarding market price and liquidity post listing.

The company and its subsidiary are involved in certain tax-related and regulatory proceedings. These include direct tax and statutory cases with relatively small amounts under dispute.

Management believes that these cases will not materially impact business operations. However, any unfavorable outcome could have financial implications.

The company has stated that it has obtained required statutory approvals for conducting its business.

The company has shown steady growth in revenue and profitability over recent years.

Revenue from operations has increased due to higher sales volumes and improved product mix.
Profit after tax has remained positive, indicating stable operating performance.

Net worth has strengthened over time, reflecting retained earnings and capital infusion.

Operating cash flows have generally been positive, supported by profitable operations.

Investing cash flows have been negative mainly due to capital expenditure on plant and machinery.

Financing cash flows reflect borrowings, repayment of loans, and issuance of shares.

Overall cash position fluctuates based on expansion activities and working capital needs.

Key performance indicators include:

• EBITDA margin in the range of around 10–15%

• Return on Equity and Return on Capital Employed showing healthy operational efficiency

• Earnings per share showing consistent profitability

• Net asset value per share improving over time

These ratios indicate a reasonably stable financial position with growth potential.

The company intends to utilize the IPO proceeds for:

• Capital expenditure for expansion of manufacturing capacity

• Funding working capital requirements

• General corporate purposes

These objectives aim to strengthen operations and support future growth.

The issue is a 100% fresh issue of equity shares with no offer for sale component.

A portion of the issue is reserved for market makers, while the remaining shares are allocated among:

• Qualified Institutional Buyers (QIBs)

• Non-Institutional Investors (NIIs)

• Retail Individual Investors

The issue follows the book-building process and is proposed to be listed on BSE SME.

The issue price is determined through the book-building process based on market demand and peer comparison.

Valuation is justified considering the company’s growth, profitability, net worth, and business prospects.

Since there are limited comparable listed peers, valuation relies primarily on internal financial performance and sector outlook.

Before the issue, the company’s capital structure consists of promoter and existing shareholder equity.

Post issue, equity share capital will increase due to the fresh issue, and promoters’ shareholding will dilute accordingly.

The company does not have any outstanding convertible instruments.

The company has entered into certain transactions with promoters and group entities in the ordinary course of business.

These include purchases, sales, and reimbursement of expenses.

Management states that such transactions are conducted on arm’s length basis and are in compliance with statutory requirements.

Material agreements include:

• Issue agreement with the book running lead manager

• Registrar agreement

• Underwriting agreement

• Market making agreement

• Banker to the issue agreement

These contracts govern the IPO process and operational relationships.

The company has constituted:

• Audit Committee

• Nomination & Remuneration Committee

• Stakeholders Relationship Committee

It follows provisions of the Companies Act and SEBI regulations applicable to SME listed entities.

Policies for transparency, disclosures, and internal controls have been adopted.

Management highlights steady revenue growth driven by increased demand for steel fibers and concrete solutions.

Cost of raw materials remains a key factor affecting margins. The company focuses on operational efficiency and better procurement practices to manage costs.

Future plans include capacity expansion, diversification of products, and strengthening distribution channels.

The company expects infrastructure and construction growth in India to support long-term business performance.