Behari Lal Engineering IPO (12-14 August) Analysis

IPO Analysis | BSE and NSE Main Board | 100% Book Built Offer (Fresh Issue and Offer for Sale) | Regulation 6(1)

Based on Red Herring Prospectus dated August 6, 2026 | Metal Rolls, Engineering Castings and Alloy Steel Products | Mandi Gobindgarh, Punjab

STATUS: LIVE RHP, ANCHOR BID AUGUST 11, BIDDING OPENS AUGUST 12 AND CLOSES AUGUST 14, 2026

Fresh Issue: up to Rs.930 Million | Offer for Sale: up to 7,320,001 Equity Shares by 2 Promoters, 2 Promoter Group Entities and 1 Investor | Main Board Listing on BSE and NSE

One of India's Largest Metal Rolls Producers (10-11.5% Market Share per CRISIL) | RoNW of 21.12% (FY26), Near the Top of a 7-Company Peer Set | Extremely Low Leverage (Debt-Equity 0.06x)

 Behari Lal Engineering Limited was incorporated in 1995 and converted to a public limited company ahead of this Offer. Its CIN is U27109PB1995PLC016490, with its registered office in Village Salani, Amloh Road, Mandi Gobindgarh, Punjab and a corporate office in East Delhi. The Promoters are Parkash Chand Garg, Rajesh Garg, Dinesh Garg, Lovlish Garg and Bhuvnesh Garg.

The Company is an integrated iron and steel manufacturer specialising in customised engineering solutions, comprising 4 core product lines: Metal Rolls (used in rolling mills to produce finished steel products such as TMT rebar and structural steel, across grades including alloy cast steel rolls, S.G.

Iron Pearlitic and Bainitic/Accicular rolls, and forged rolls), Engineering Castings (500 Kg to 20 MT per unit, for steel, iron, mining, aggregate crusher and power industries), Alloy Steel Products (carbon, alloy and stainless steel bars, including recently introduced tool steel and valve steel), and Forging Ingots and Forged Shafts/Blocks.

Per the CRISIL Report commissioned for this Offer, the Company is one of India's largest metal rolls producers, meeting 10.00% to 11.5% of the country's demand in Fiscal 2026.

The Company serves diverse end-use industries including automobile, infrastructure, aggregate crusher manufacturing and general engineering, with sales concentrated in India (91.02% to 95.67% of revenue across the last 3 fiscals).

Revenue from operations grew from Rs.4,460.84 million in Fiscal 2024 to Rs.5,340.25 million in Fiscal 2026, while PAT grew from Rs.357.91 million to Rs.646.36 million over the same period, with EBITDA margin improving steadily from 13.67% to 18.97%.

The Company carries very low leverage throughout the disclosed track record (Debt-Equity ratio of 0.03 to 0.21 times), and has recently commenced construction of a third manufacturing facility, discussed further in Section 6.

Key Basics

Particulars	Details
Document Type	Red Herring Prospectus (RHP) dated August 6, 2026. This is a live offer: Anchor Investor Bidding Date Tuesday, August 11, 2026, Bid or Offer opens Wednesday, August 12, 2026 and closes Friday, August 14, 2026.
Issue Structure	100% Book Built Offer comprising a Fresh Issue of Equity Shares aggregating up to Rs.930.00 million and an Offer for Sale of up to 7,320,001 Equity Shares. Face value Rs.10 per share.
Face Value	Rs.10 per Equity Share.
Promoters and Selling Shareholders	Selling Shareholders include Promoters Rajesh Garg (up to 1,943,623 shares, WACA Rs.1.12) and Lovlish Garg (up to 350,000 shares, WACA Rs.2.72); Promoter Group entities Yogita Garg (up to 2,143,623 shares, WACA Rs.4.08) and Dinesh Kumar Garg HUF (up to 150,000 shares, WACA Rs.5.18); and Investor Selling Shareholder SG Tech Engineering Private Limited (up to 2,732,755 shares, WACA Rs.89.65, by far the highest of the group).
Eligibility Route	Regulation 6(1) of the SEBI ICDR Regulations, 2018, the standard main board profitability-based eligibility route.
Listing Exchange	Main board listing on both BSE Limited and the National Stock Exchange of India (NSE); NSE is the Designated Stock Exchange.
BRLMs	A 2-bank syndicate: Emkay Global Financial Services Limited and Systematix Corporate Services Limited.
Registrar	MUFG Intime India Private Limited (formerly Link Intime India Private Limited).
Bid or Offer Dates	Anchor Bid: Tuesday, August 11, 2026. Opens: Wednesday, August 12, 2026. Closes: Friday, August 14, 2026.
Listed Peers, One Line	7 listed peers in the specialty steel and industrial engineering space (Jayaswal Neco Industries, AIA Engineering, Steelcast, RHI Magnesita India, Vardhman Special Steel, IFGL Refractories, Kennametal India); the Company's RoNW is the second highest of the 8, trailing only Steelcast.

This is a main board metal rolls and specialty steel manufacturer with a genuinely long operating history (incorporated 1995). The Offer for Sale spans both Promoters and Promoter Group entities at very low WACAs, alongside a single institutional Investor Selling Shareholder (SG Tech Engineering) whose WACA of Rs.89.65 is dramatically higher than the Promoter figures, indicating a distinct, more recent capital entry point for that investor.

How Will the IPO Money Be Used?

Object	Estimated Amount (Rs. Million)	Substantiation
Purchase and installation of new equipment/machinery (including computers, printers and peripherals) at Manufacturing Facility 1	195.89	Cost independently certified by GATS India Ltd, an Independent Chartered Engineer, per certificate dated August 6, 2026.
Purchase and installation of new roof-top solar panels at Manufacturing Facility 1	34.00	Independently certified by the same Chartered Engineer.
Purchase and installation of new equipment/machinery at Manufacturing Facility 2	366.50	Independently certified by the same Chartered Engineer; the largest single capital expenditure line item.
Purchase and installation of new roof-top solar panels at Manufacturing Facility 2	34.00	Independently certified by the same Chartered Engineer.
Repayment or prepayment of certain borrowings	5.70	A modest, specific rupee figure, consistent with the Company's already very low absolute debt levels (Rs.101.16 million outstanding secured fund-based borrowings as of May 31, 2026, against Rs.840.79 million total sanctioned).
General corporate purposes	[TBD]	Capped at 25% of Gross Proceeds. No further breakdown provided, as is standard.

The capital expenditure plan (totalling Rs.630.39 million across the 4 named line items) is well substantiated, with every item independently certified by a named Chartered Engineer, and is split evenly across the Company's 2 existing manufacturing facilities, including a rooftop solar component at each site supporting energy cost reduction.

The debt repayment Object is deliberately modest, reflecting the Company's already low leverage rather than a deleveraging-driven Offer. The one disclosed execution caveat is that, as of this RHP, firm orders for the equipment and machinery have not yet been placed, so cost and timing risk remains open despite the certified cost estimates.

As with all RHPs at this stage, the Gross Proceeds, Net Proceeds and General Corporate Purposes figures remain undetermined until the Offer Price is fixed.

Financial Performance

P&L and Key Metrics (Rs. Million unless stated)

Particulars	FY 2026	FY 2025	FY 2024
Revenue from operations	5,340.25	5,079.12	4,460.84
EBITDA	1,013.28	813.12	609.86
EBITDA margin (%)	18.97	16.01	13.67
Profit after tax	646.36	529.51	357.91
PAT margin (%)	12.10	10.43	8.02
Cash Profit	794.17	624.32	484.11
Return on net worth / RoNW (%)	21.12	21.92	18.48
Net worth	3,060.99	2,416.16	1,936.59
Net Debt	166.35	51.18	407.43
Debt to equity ratio (times)	0.06	0.03	0.21

Independently recomputed, revenue grew approximately 13.9% in FY25 and a further 5.1% in FY26, a steadier pace than the sharp swings seen in several other companies in this report series, while PAT grew 47.9% and 22.05% respectively over the same 2 years, driven by consistent EBITDA margin expansion (13.67% to 18.97%) rather than one-off items.

Cash Profit (PAT plus non-cash charges) has grown in lockstep with reported PAT in every year, and RoNW has stayed in a healthy, tight band (18.48% to 21.92%) across all 3 disclosed fiscal years without a sharp reversal in either direction.

The Company's leverage profile is notably conservative for a capital-intensive steel manufacturer: the Debt-Equity ratio has remained extremely low throughout (0.03 to 0.21 times), and Net Debt actually fell from Rs.407.43 million (FY24) to Rs.51.18 million (FY25) before rising modestly to Rs.166.35 million (FY26), still a small figure relative to the Company's Rs.3,060.99 million net worth.

This is one of the more lightly levered companies in this report series, and the modest debt repayment Object in this Offer (Rs.5.70 million) reflects that already-conservative starting position rather than a genuine deleveraging need.

How Does It Compare to Peers?

Company	Total Income (Rs. Million)	Basic EPS (Rs.)	Diluted EPS (Rs.)	RoNW (%)	NAV/Share (Rs.)	EV/EBITDA (times)
Behari Lal Engineering Limited	5,340.25	16.56	16.56	21.12	78.41	NA
Jayaswal Neco Industries Limited	71,318.20	4.77	4.77	16.39	29.26	6.52
AIA Engineering Limited	44,198.64	136.11	136.11	15.53	859.98	24.04
Steelcast Limited	4,231.66	8.58	8.58	21.89	39.03	22.50
RHI Magnesita India Limited	40,199.45	(18.54)	(18.54)	(10.81)	172.42	16.35
Vardhman Special Steel Limited	17,544.33	13.15	13.13	9.59	132.11	13.10
IFGL Refractories Limited	18,942.50	4.81	4.81	7.93	163.00	9.59
Kennametal India Limited	11,703.00	46.82	46.82	13.70	340.02	35.81

The RHP discloses 7 listed peers across the specialty steel, refractories and industrial engineering space, ranging from a smaller company (Steelcast, roughly comparable scale) up to much larger diversified players (Jayaswal Neco Industries, AIA Engineering, RHI Magnesita India).

On RoNW, Behari Lal Engineering's 21.12% is the second highest of all 8 companies in the set, trailing only Steelcast (21.89%) and comfortably ahead of the remaining 6, including 1 currently loss-making peer, RHI Magnesita India, at negative 10.81%.

This is a genuinely strong showing given the peer set includes several much larger, longer-listed companies, though as with any comparison spanning companies of very different scale and product mix, investors should treat it as directional context rather than a precise valuation anchor.

Key Risks

l Revenue is meaningfully concentrated in the top 10 customers (37.81% to 39.91% of revenue across the 3 disclosed years) without long-term contracts, and the Company's automobile end-use industry alone contributed 38.65% of FY 2026 revenue; any downturn in this specific end market could disproportionately affect the Company.

l The Company has not yet placed firm orders for the equipment and machinery underlying the largest capital expenditure Objects of this Offer (totalling Rs.562.39 million of the Rs.630.39 million total capex plan), exposing cost and timing execution risk despite the independent Chartered Engineer certification of the estimates.

l The Company has recently commenced construction of a third manufacturing facility, a new, not-yet-operational capital commitment that carries its own construction and ramp-up execution risk separate from the Objects of this specific Offer.

l Sales remain heavily concentrated within India (91.02% to 95.67% of revenue), and raw material costs, including imported inputs, constitute the largest component of expenses without long-term supplier contracts, exposing margins to commodity price and exchange rate volatility.

l The Company does not have documentary evidence for the educational qualifications of 2 Promoters who are also Directors (Parkash Chand Garg and Rajesh Garg); the Company has relied on affidavits and correspondence with the relevant universities in the absence of the original degree certificates and marksheets.

l The Company has filed certain statutory forms with incorrect information in the past (an inadvertent directorship end-date typo, misspelled allottee names in a 2011 share allotment filing, and an incorrect director category in a 2010 filing), though the Company states the underlying corporate records (register of members, Board resolutions) reflect the correct information and no disputes or regulatory action have arisen to date.

l The Company's Restated Financial Statements carry contingent liabilities aggregating Rs.35.58 million not provided for, and there have been certain past delays in payment of statutory dues.

l The Company's manufacturing operations are power and fuel intensive and dependent on continued availability of machinery without breakdown; under-utilisation of currently operational production lines is also disclosed as a standalone risk.

l The Company benefits from certain subsidies, including electricity dues and GST refunds; withdrawal or reduction of these subsidies could affect margins.

l The majority of the Company's Directors, including its Independent Directors, do not have prior experience serving on the board of a listed company.

l The Company has availed unsecured loans, including from related parties, which may be recalled at any time, and has entered into related party transactions in the past that may continue.

l The industry report prepared by CRISIL, commissioned and paid for by the Company itself, identifies certain limitations investors should weigh when relying on its market share and positioning claims.

Positives to Note

l The Company holds a genuine, independently verified (CRISIL Report) market leadership position, ranking among India's largest metal rolls producers with a 10.00% to 11.5% share of national demand in Fiscal 2026.

l Financial performance has improved consistently across every year of the disclosed track record: EBITDA margin rose from 13.67% to 18.97% and PAT grew from Rs.357.91 million to Rs.646.36 million between FY 2024 and FY 2026, without a single reversal.

l RoNW of 21.12% in FY 2026 is the second highest among a 8-company peer set that includes several much larger, longer-established specialty steel and industrial engineering names, trailing only Steelcast Limited.

l The Company carries unusually low leverage for a capital-intensive manufacturer (Debt-Equity ratio of 0.03 to 0.21 times across all 3 disclosed years), leaving substantial balance sheet capacity for future growth without straining the Company's financial position.

l The entire capital expenditure Object of this Offer is independently certified by a named Chartered Engineer (GATS India Ltd), and is split across the Company's 2 existing, already-operational manufacturing facilities rather than an unproven greenfield site, reducing (though not eliminating) execution risk.

l The Company has a genuinely long operating history, tracing back to 1995, and a diversified product portfolio across metal rolls, engineering castings, alloy steel products and forging ingots, spreading revenue across multiple end-use industries rather than a single product line.

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