German Green Steel & Power IPO (25 Sep-29 Sep) Analysis

Sep 27

8 min read

Updated: Oct 4

IPO Analysis | Mainboard (BSE and NSE) | Book Built Issue (Fresh Issue and Offer for Sale) | Regulation 6(1)

Based on Red Herring Prospectus dated September 21, 2026 | Sponge Iron, MS Billets, TMT Bars and Captive Power | Ahmedabad, Gujarat

German Green Steel and Power Limited is incorporated under CIN U27100GJ2008PLC054437, with its registered and corporate office at German House, Near Bharat Petrol Pump, Opp. Kochrab Ashram, Paldi, Ahmedabad 380007, Gujarat.

The website is www.germansteel.in. The promoters are Inamulhaq Shamsulhaq Iraki, Abdulhaq Shamsulhaq Iraki and Ibrarulhaq Inamulhaq Iraki. Mansuri Abira Idris is Company Secretary and Compliance Officer. The company has joint statutory auditors, Talati and Talati LLP and S A M A S and Associates, both Chartered Accountants.

The company runs a vertically integrated steel business through two manufacturing facilities in Gujarat: the Samakhiyali facility, which processes iron ore in house into Sponge Iron and rolls this into MS Billets and TMT Bars, and the Viramgam facility.

As of March 31, 2026, approximately 75.44% of energy requirements are met from its own captive coal based, waste heat recovery, wind and solar power plants, reducing dependence on the state electricity grid.

TMT Bars are the dominant product, contributing 78.74% of FY2026 revenue from operations, with MS Billets at 6.02% and Sponge Iron at 1.85%. Customers fall into three channels: distributors, dealers and direct institutional customers such as roadway, engineering, thermal power and real estate companies, mostly concentrated in Gujarat. The financial year ends March 31.

Key Basics

This is a mainboard book built issue on the BSE and NSE, with NSE as the designated exchange, made under Regulation 6(1) of the SEBI ICDR Regulations, meaning the company meets the standard profitability and net worth track record test. The RHP is dated September 21, 2026.

The Offer Price, Price Band and lot size remain undetermined at this stage. Figures in this RHP are already stated in Rs. Lakhs, so no unit conversion was needed for this article.

Field	Value
Document Type	Red Herring Prospectus dated September 21, 2026. Price Band, Offer Price and lot size are [TBD].
Platform	Mainboard, BSE and NSE. Designated Stock Exchange: NSE.
Issue Structure	Fresh Issue of Rs.29,000.00 Lakhs plus an Offer for Sale of up to 10,00,000 Equity Shares (5,00,000 each from the two selling promoters). Fresh Issue size already reduced by the Pre IPO Placement.
Face Value	Rs.10 per Equity Share
Pre issue Equity	5,44,85,888 Equity Shares. Promoters and promoter group hold 96.63%; the balance 3.37% is held by Pre IPO Placement investors.
Pre IPO Placement	18,38,000 Equity Shares allotted on September 26, 2025 at Rs.270 per share, raising Rs.4,962.60 Lakhs, already reduced from the Fresh Issue. Of this, Rs.2,672.63 Lakhs has been utilised toward the capex object and Rs.2,289.97 Lakhs toward general corporate purposes.
Selling Shareholders	Inamulhaq Shamsulhaq Iraki and Abdulhaq Shamsulhaq Iraki, both promoters, 5,00,000 shares each
BRLMs	Systematix Corporate Services Limited, Emkay Global Financial Services Limited, Pantomath Capital Advisors Private Limited
Registrar	Bigshare Services Private Limited
Bid Dates	Anchor September 24, 2026. Bidding opens September 25, 2026 and closes September 29, 2026.

What distinguishes this issue is the Pre IPO Placement completed a year before filing, at Rs.270 per share, already partly spent on the same capital expenditure the Fresh Issue is meant to fund. The Offer for Sale is small relative to the Fresh Issue and comes entirely from two of the three promoters.

How Will the IPO Money Be Used?

This is a Fresh Issue plus an Offer for Sale. The company receives no proceeds from the Offer for Sale; those proceeds go to the two selling promoters.

Object	Amount (Rs. Lakhs)	Details
Capital expenditure: expansion of Samakhiyali facility and hybrid wind and solar power plant	22,633.05	Total project cost Rs.34,813.58 Lakhs. Rs.6,241.01 Lakhs already deployed from the Pre IPO Placement, internal accruals and an HDFC Bank term loan. A further Rs.5,939.52 Lakhs is to come from the same HDFC term loan, leaving Rs.22,633.05 Lakhs to be funded from the Fresh Issue.
Prepayment or repayment of borrowings	769.99	To be deployed in Fiscal 2027.
General corporate purposes	[TBD]	Capped at 25% of Gross Proceeds. Rs.2,289.97 Lakhs already spent from the Pre IPO Placement counts against this cap.
Total Net Proceeds	[TBD]	To be finalised once the Offer Price is set.

The expansion raises installed Sponge Iron capacity at Samakhiyali from 66,000 to approximately 1,48,500 MTPA, MS Billets from 2,14,500 to 4,12,500 TPA, and TMT Bars from 1,81,500 to 3,46,500 MTPA, roughly doubling each line. The company has arranged firm finance for 75% of the project cost as required by SEBI ICDR Regulation 7(1)(e), and has a CARE Analytics Detailed Project Report and vendor quotations backing the capex numbers, which is a more advanced state of readiness than most fresh capex objects in this batch.

Financial Performance

Revenue, EBITDA, and Profitability

Consolidated (Rs. Lakhs)	FY2026	FY2025	FY2024
Revenue from Operations	1,67,898.17	1,50,757.13	1,12,978.18
EBITDA	16,695.67	11,680.75	7,933.32
EBITDA Margin	9.94%	7.75%	7.02%
Profit After Tax	7,988.87	5,994.36	4,166.66
PAT Margin	4.76%	3.98%	3.69%
EPS, Basic and Diluted (Rs.)	14.91	11.39	7.91
Return on Net Worth	18.86%	20.40%	23.67%
Return on Capital Employed	19.31%	15.91%	18.62%

Revenue grew 11.37% in FY2026 to Rs.1,67,898.17 Lakhs, on top of 33.46% growth in FY2025, and EBITDA margin has risen every year, from 7.02% to 9.94%. Profit After Tax grew 33.28% in FY2026.

Return on Net Worth has fallen each year even as profit grew, from 23.67% in FY2024 to 18.86% in FY2026, because total equity, boosted by the Pre IPO Placement and retained earnings, grew faster than profit. Debt to Equity improved from 1.13x in FY2024 to 0.79x in FY2026.

Customer concentration is falling: the largest customer's share of revenue dropped from 17.55% in FY2024 to 10.67% in FY2026, and the top 10 customers' combined share fell from 57.92% to 50.62% over the same period. In FY2024, a promoter linked entity, Iraki Enterprise Limited, appeared among the top 10 customers, contributing 3.00% of that year's revenue; it does not appear in the FY2025 or FY2026 top 10 lists.

Balance Sheet and Cash Flow

Consolidated (Rs. Lakhs)	FY2026	FY2025	FY2024
Total Assets	1,22,024.04	1,01,520.08	55,973.49
Total Equity	42,369.59	29,391.32	17,606.16
Net Working Capital	15,856.27	16,694.15	12,993.70
Debt to Equity Ratio	0.79x	1.18x	1.13x
Net Cash from Operating Activities	14,080.40	7,442.88	2,835.54
Net Cash from Investing Activities	(13,483.70)	(22,404.32)	(6,310.20)

NAV per share as of March 31, 2026 was Rs.77.76. Operating cash flow has grown every year, nearly doubling in FY2026 to Rs.14,080.40 Lakhs from Rs.7,442.88 Lakhs, a healthier trend than several other companies in this batch. Investing outflows have been heavy in each of the last two years, Rs.22,404.32 Lakhs in FY2025 and Rs.13,483.70 Lakhs in FY2026, reflecting the ongoing Samakhiyali and Viramgam capacity build out ahead of this Offer.

How Does It Compare to Peers?

The RHP names five listed and unlisted peers: Beekay Steel Industries, Gallant Ispat, Kamdhenu, MSP Steel and Power, and VMS TMT, based on closing prices on BSE as of September 9, 2026. German Green Steel's own P/E cannot be shown until the Price Band is set.

Company	EPS (Rs.)	P/E (x)	NAV (Rs.)	RoNW (%)
German Green Steel and Power	14.91	[TBD]	77.76	18.86%
Beekay Steel Industries	18.94	22.54	548.18	3.49%
Gallant Ispat Limited	20.07	27.80	137.44	14.60%
Kamdhenu Limited	2.72	14.57	14.06	19.77%
MSP Steel and Power Limited	0.56	61.57	18.18	3.28%
VMS TMT Limited	4.95	8.92	45.97	9.22%

German Green Steel's RoNW of 18.86% is the best in this peer set, ahead of Kamdhenu's 19.77% by only a narrow margin and well ahead of Beekay Steel and MSP Steel, both under 3.5%. The RHP's stated industry average P/E of 35.25 is not a true average of the five peers; the RHP's own note explains it is calculated only from the highest (MSP Steel, 61.57) and lowest (VMS TMT, 8.92) figures, averaged between just those two, so Beekay, Gallant and Kamdhenu's P/E ratios are not reflected in that average at all.

Key Risks

• Return on Net Worth has declined every year, from 23.67% in FY2024 to 18.86% in FY2026, even as profit after tax grew, because the equity base grew faster on the back of the Pre IPO Placement and retained earnings.

• The company relies on volatile input materials, scrap, iron ore, coal, silico manganese and dolomite, which together were 82.77% of total expenses in FY2026, all sourced from third parties on a purchase order basis with no long term contracts.

• The company does not have long term supply contracts with customers either, and sells on a purchase order basis; 50.62% of FY2026 revenue still comes from just 10 customers, most of them Gujarat based distributors and dealers.

• A subsidiary, German TMT Private Limited, was previously operating and marketing under the name German TMX and had to change its corporate name, withdraw a trademark application and discontinue a domain name after cease and desist notices from H&K Rolling Mill Engineers over the TMX and Thermex marks, and the company has since entered a licensing agreement to continue using Thermex technology.

• A total of Rs.22,633.05 Lakhs of the Rs.29,000.00 Lakhs Fresh Issue, about 78%, funds a single expansion project at one facility; any delay or cost overrun on this project concentrates directly on the newly raised capital.

• The Pre IPO Placement was priced at Rs.270 per share a year before this filing; investors should judge whether the eventual Offer Price represents a premium or discount to that recent transaction.

• A promoter linked entity, Iraki Enterprise Limited, was among the company's top 10 customers as recently as FY2024, contributing 3.00% of that year's revenue, though it has since dropped out of the top 10 list.

• A pending case before the Gujarat High Court concerns an unauthorised electricity use finding against the company by its power distribution licensee, with a provisional bill of Rs.161.01 Lakhs; the company won the first appeal, and the licensee has since appealed that outcome.

• Total Assets nearly doubled in two years, from Rs.55,973.49 Lakhs in FY2024 to Rs.1,22,024.04 Lakhs in FY2026, driven substantially by capital work in progress and property additions still being commissioned, so a portion of the balance sheet reflects capacity not yet in full production.

• The peer set used for comparison mixes companies of very different scale, from Kamdhenu at Rs.774.70 Lakhs Total Income to Gallant Ispat at Rs.4,47,851.60 Lakhs, so ratio comparisons should be read with that gap in mind.

• Industry and market data in this RHP comes from a report commissioned and paid for by the company itself from CARE Analytics and Advisory Private Limited, including the Detailed Project Report certifying the capex numbers.

Positives to Note

• Revenue grew from Rs.1,12,978.18 Lakhs in FY2024 to Rs.1,67,898.17 Lakhs in FY2026, and EBITDA margin expanded in every year shown, from 7.02% to 9.94%.

• Operating cash flow nearly doubled in FY2026 to Rs.14,080.40 Lakhs from Rs.7,442.88 Lakhs in FY2025, and has grown in every year shown, a stronger and more consistent trend than several peers in this comparison set.

• Debt to Equity improved from 1.13x in FY2024 to 0.79x in FY2026, and the company has arranged firm financing for 75% of its expansion project cost ahead of the Offer, as required under SEBI ICDR Regulation 7(1)(e).

• Customer concentration has been falling: the largest customer's revenue share dropped from 17.55% to 10.67%, and the top 10 customers' combined share dropped from 57.92% to 50.62%, over the three years shown.

• Approximately 75.44% of the company's energy needs are met from its own captive coal, waste heat recovery, wind and solar power sources as of March 31, 2026, reducing exposure to grid tariffs and power cuts.

• As on the date of the RHP, there are no outstanding criminal proceedings against the company, its subsidiaries, its promoters or its directors, and no regulatory or statutory actions pending against any of them.

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