Jindal Supreme IPO DHRP Analysis

STATUS: DRHP Filed. Price Band & IPO Dates Not Yet Announced

What Does This Company Do?

Jindal Supreme (India) Limited is a Hisar, Haryana-based manufacturer of steel pipes and tubes. Founded in 1974 by the late Madan Lal Jindal, the company is now managed by his grandson Abhishek Jindal (Promoter), who has over 18 years of experience in the steel tubes industry. All manufacturing is done at a single facility in Hisar, Haryana.

Product	What It Is	Applications
MS Black Pipes/Tubes	Uncoated mild steel pipes	Water supply, construction, fire protection, oil & gas
MS Galvanized Pipes/Tubes	Zinc-coated rust-resistant pipes	Plumbing, agriculture, outdoor structures
Metal Beam Crash Barriers	W-beam and Thrie-beam road barriers (since Apr 2024)	Highways and road safety
GI Tubular Poles	Galvanized iron poles (since Apr 2025)	Street lighting, rural electrification

Products are manufactured as per Indian Standards (ISI) and sold primarily to institutional buyers, infrastructure contractors, and industrial customers, along with a growing dealer network across North India.

2. The IPO: Key Basics

Detail	Information
Total Shares on Offer	Up to 1,34,28,000 equity shares (Face Value ₹10 each)
Fresh Issue	Up to 1,07,41,149 shares .This money comes INTO the company
Offer for Sale (OFS)	Up to 26,86,851 shares .This money goes to VVJ Enterprise Pvt Ltd (promoter group)
Post-IPO Promoter Holding	~73.68% (currently 82.03% pre-IPO)
Listing Exchanges	BSE and NSE
Book Running Lead Manager	Sarthi Capital Advisors Pvt Ltd
Registrar	Bigshare Services Pvt Ltd
Price Band	Not yet announced
IPO Open / Close Dates	Not yet announced

What is a Fresh Issue vs OFS?

• Fresh Issue: New shares are created and sold. The money raised goes to the company.

• Offer for Sale (OFS): Existing shares are sold by a promoter group entity. The money goes to the seller, NOT to the company.

• Here, 80% of the IPO is a Fresh Issue, and 20% is OFS.

3. How Will the IPO Money Be Used?

Of the fresh issue proceeds, ₹7,700 Lakhs (~₹77 Crore) will be used to repay outstanding bank loans (HDFC Bank, Kotak Bank, ICICI Bank). The remainder goes to general corporate purposes (not more than 25% of gross proceeds).

Use of Net Proceeds	Amount (₹ Lakhs)
Repayment/Pre-payment of Bank Loans	7,700.00
General Corporate Purposes	To be finalised (max 25% of gross)

Key Point: This IPO is primarily a debt-reduction exercise, not a growth-funding one. No capex (factory expansion or new machinery) is being funded from IPO proceeds. The fund-use plan has not been appraised by any bank or financial institution.

4. Financial Performance

Note: ₹1 Lakh = ₹1,00,000. All figures are in ₹ Lakhs unless stated otherwise.

4.1 Revenue from Operations

Period	Revenue (₹ Lakhs)	Change
Fiscal 2023 (full year)	50,612	—
Fiscal 2024 (full year)	64,543.98	↑ 27.5%
Fiscal 2025 (full year)	58,639.93	↓ 9.2%
Apr–Dec 2025 (9 months)	48,965.12	~₹65,000 annualised

Revenue grew sharply in FY24 but fell in FY25 by 9.2%. At the 9-month FY26 run rate, the company is back to FY24 levels (~₹65,000 Lakhs annualised).

4.2 Profitability (EBITDA & PAT)

Period	EBITDA (₹L)	EBITDA Margin	PAT (₹L)	PAT Margin
FY23	875.26	1.73%	63.46	0.13%
FY24	2,110.86	3.27%	1,287.28	1.98%
FY25	2,592.17	4.42%	2,426.84	4.01%
Apr–Dec 2025	3,030.22	6.19%	1,630.14	3.33%

The profitability trend is strongly improving. The company earned just ₹63 Lakhs in net profit (PAT) in FY23 on ₹506 Crore of revenue. By FY25, PAT improved to ₹2,426 Lakhs, a 38x jump in two years. EBITDA margins have consistently expanded each year.

4.3 Balance Sheet (As at December 31, 2025)

Balance Sheet Item (Dec 31, 2025)	₹ Lakhs
Total Assets	21,534.75
Total Equity (Net Worth)	9,053.94
Total Borrowings	~9,216.53
Debt/Equity Ratio	1.02x

The debt/equity ratio has improved from 2.09x (FY24) to 1.02x (Dec 2025). Post-IPO debt repayment of ₹77 Crore should bring this down further.

4.4 Key Performance Ratios

KPI	FY23	FY24	FY25	Apr–Dec 25
EPS (Basic/Diluted)	₹0.13	₹3.17	₹6.02	₹4.05
Debt / Equity	1.75x	2.09x	1.28x	1.02x
Return on Equity (RoE)	1.52%	25.59%	32.52%	18.00%
Return on Capital Employed (RoCE)	5.69%	13.92%	22.37%	14.31%

FY25 RoE of 32.52% is impressive but was partly boosted by a ₹1,660 Lakh gain on property sale recorded in 'Other Income.' Underlying RoE excluding this one-time gain would be lower.

5. Product-Wise Revenue Split

Product	Apr–Dec 25	FY25	FY24	FY23
MS Black Pipes	44.52%	46.30%	49.19%	47.26%
MS Galvanized Pipes	26.44%	35.75%	44.62%	46.12%
Metal Beam Crash Barriers	17.69%	10.63%	—	—
GI Tubular Poles	2.98%	—	—	—
Other Operating Income	8.38%	7.32%	6.19%	6.62%

The older core products, Black Pipes and Galvanized Pipes account for ~70% of revenue but their share is declining as the new product lines (crash barriers, poles) scale up. This represents product diversification in progress.

6. Manufacturing Capacity Utilisation

Product (Apr–Dec 2025)	Capacity (MT)	Production (MT)	Utilisation
MS Black Pipes	67,500	45,600	67.56%
MS Galvanized Pipes	33,750	20,130	59.64%
Metal Beam Crash Barriers	18,000	11,837	65.76%
GI Tubular Poles	9,000	1,855	20.61%

GI Tubular Poles are at only 20.61% utilisation . This is a brand-new product (started April 2025) still ramping up. The other three product lines run at 60%–68% utilisation, leaving room to grow revenue without major new investment.

7. Where Does the Revenue Come From?

The company sells predominantly in North and North-West India. The top states by revenue share (Apr–Dec 2025):

State	Revenue Share
Haryana	27.65%
Rajasthan	15.52%
Punjab	14.75%
Uttar Pradesh	11.67%
Delhi	7.74%
All Others	~22.67%

Over 60% of revenue comes from Haryana, Rajasthan, and Punjab alone. This geographic concentration is a meaningful risk.

8. How Does It Compare to Listed Peers?

Data for 9 months ended December 31, 2025:

Company	Revenue (₹L)	EBITDA Margin	PAT Margin	EPS	Note
Jindal Supreme (India) Ltd	48,965	6.19%	3.33%	₹4.05	★ Smallest but strong margins
Vibhor Steel Tubes Ltd	81,422	3.45%	0.76%	₹3.28	Lower margins than Jindal
Sambhv Steel Tubes Ltd	1,72,793	10.66%	5.13%	₹3.21	Margin leader
Hi-Tech Pipes Ltd	2,71,971	4.68%	2.15%	₹2.88	Largest; lower margins

Jindal Supreme is the smallest of the four peers by revenue but has better margins than Vibhor Steel Tubes and Hi-Tech Pipes. Sambhv Steel Tubes is the margin leader. The improving trajectory at Jindal Supreme is a positive signal.

9. Cash Flow Summary

Period	Operating CF (₹L)	Investing CF (₹L)	Financing CF (₹L)
FY23	+778.86	-1,586.75	+805.58
FY24	+2,020.02	-4,304.55	+2,287.46
FY25	+573.98	+1,188.71	-1,765.58
Apr–Dec 2025	+1,722.75	-706.60	-1,017.27

FY24 saw a large capex spend of ₹4,300+ Lakhs (investing outflow) funded via borrowings. FY25 showed unusual positive investing cash flow due to property sale (₹1,660 Lakhs). The 9-month FY26 operating cash flow of +₹1,722 Lakhs is healthy and the best in recent history.

10. Key Risks to Know Before Applying

10.1 High Priority Risks

• Single factory, single location: All manufacturing is at one plant in Hisar, Haryana. A fire, flood, machinery failure, or local disruption could halt operations. There is no formal disaster recovery plan and no business interruption insurance.

• Land is leased from the promoter: The company does not own its factory land. It leases it from promoter Abhishek Jindal (₹1 Lakh/year) and his father Janak Raj Jindal (₹2 Lakh/year), valid till 2052. This is a related-party arrangement and a potential conflict of interest.

• Raw materials = ~89–93% of total costs: The entire cost structure is dominated by steel. Any rise in steel prices directly squeezes margins. The company has limited pricing power.

• Revenue dependent on two products: Black Pipes and Galvanized Pipes together account for ~70% of revenue. A construction or infrastructure slowdown would immediately hurt the top line.

• Website domain not owned by the company: The company's website domain is registered in promoter Abhishek Jindal's personal name and not in the company's name.

10.2 Moderate Risks

• Geographic concentration: Over 60% of revenue from Haryana, Rajasthan, and Punjab. State-specific slowdowns matter a lot.

• Historical TDS payment delays: Instances in FY08, FY12, FY13, and FY17 where TDS was deposited but not adjusted by the tax department (total ₹18,280). Small in amount but regulatorily notable.

• Related party transactions: Business dealings with promoter-related entities including land lease, loans, and directorial remuneration.

• Restrictive bank covenants: Lenders (HDFC, Kotak, ICICI) restrict dividend payments, new expansions, and fresh borrowings without prior bank approval.

•  New products unproven: GI Tubular Poles at only 20% capacity utilisation — market acceptance not yet established.

11. Positives to Note

50-year operating history: Established in 1974; not a startup or pre-revenue company

Rapidly improving profitability: PAT grew from ₹63 Lakhs (FY23) to ₹2,426 Lakhs (FY25), a near 38x jump in two years

Diversified customer base: Top 10 customers account for only ~19.35% of revenue; no single customer dominates

Debt is declining: Debt/Equity improved from 2.09x (FY24) to 1.02x (Dec 2025); IPO proceeds will reduce it further

New product lines: Crash barriers and GI poles align with India's highway and rural electrification push

ISI-certified products: Necessary for institutional and government project sales

High promoter skin-in-the-game: Promoters hold 82% pre-IPO and NO shares are pledged

Things to Watch After Listing

• Price Band Announcement: P/E valuation can only be assessed once the price band is disclosed. Compare with listed peers before applying.

• Full-Year FY26 Results: The DRHP covers only 9 months. Full-year numbers will confirm if the profitability improvement is sustainable.

• GI Tubular Poles Ramp-Up: At 20% utilisation today, success in scaling this product could meaningfully boost margins.

• Debt Repayment Impact: Repaying ₹77 Crore of loans post-IPO will reduce interest costs, which should directly boost PAT going forward.

• Monsoon & Infrastructure Spending: Demand for steel pipes is tightly linked to government infrastructure budgets and the construction cycle.

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