Mittal Sections IPO: Muted subscription and GMP suggest listing premium may be subdued

Synopsis

Mittal Sections' Rs 52.9 crore SME IPO has closed with moderate investor interest. The company is set to list on the BSE SME platform on October 14. Retail investors showed strong participation, while other categories were less enthusiastic. The grey market indicates a muted debut. Funds raised will support capacity expansion and working capital.

Steel manufacturer Mittal Sections has wrapped up its Rs 52.9 crore SME IPO with moderate investor participation, and all eyes are now on its listing scheduled for October 14 on the BSE SME platform. Despite a steady response from retail investors, the stock is currently showing no premium in the grey market (GMP 0%), suggesting a muted debut expectation next week.

Subscription details

The IPO, which was open for subscription between October 7 and October 9, received an overall subscription of 2.25 times. The retail category led the show, bidding 4.08 times their quota, while qualified institutional buyers (QIBs) subscribed 1.13 times and non-institutional investors (NIIs) just 0.55 times.

The total public bids stood at 79.26 lakh shares against 35.15 lakh shares on offer, indicating interest largely limited to retail participation.

Mittal Sections raised the funds through a fresh issue of 37 lakh shares in the price band of Rs 136–143 per share, valuing the company at around Rs 165 crore post-issue market cap.

The proceeds are set to fund capacity expansion, working capital needs, and partial debt repayment. The company plans to ramp up its manufacturing capacity from 36,000 MTPA to 96,000 MTPA at its facilities in Changodar, Ahmedabad, Gujarat.

Company snapshot

Mittal Sections manufactures mild steel and structural steel products such as MS angles, flats, round bars, and channels under the brand MSL-Mittal. Its products cater to the construction, infrastructure, and engineering sectors.

The company posted a 91% jump in FY25 profit to Rs 3.61 crore even as revenue declined 15% to Rs 137 crore, raising questions about earnings sustainability.

Financially, the company reported a return on equity (ROE) of 34.9% and return on capital employed (ROCE) of 31.3%, with a debt-to-equity ratio of 2.04, indicating significant leverage.

Outlook

The post-listing movement is likely to depend on sustained demand and execution of its expansion plans.

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