Madhur Iron͏ and Steel IPO

Madhur Iron & Steel (India) Limited, incorporated in 2012, is a prominent player in the structural steel industry. The company operates under a business-to-business (B2B), order-based model, supplying its products primarily to institutional and industrial customers across India.

Business Verticals

The company operates through two integrated business verticals:

• Manufacturing: This is the core vertical, focused on producing hot re-rolled structural steel products. The company’s flagship products include Angles, Channels, Mild Steel (MS) Sections, Flats, and Rods, all marketed under the registered brand name “SARAL.”

• Trading: This vertical complements the manufacturing operations by offering a broader range of steel products such as billets, blooms, and plates. It allows the company to serve a wider customer base with immediate material availability and a comprehensive solution.

Manufacturing Facilities and Capacity

The company’s primary manufacturing facility is a rolling mill located in Durg, Chhattisgarh. The installed capacity of this unit was significantly enhanced from 30,000 MT per annum to 56,700 MT per annum during Fiscal 2025, reflecting its commitment to scaling operations in line with market demand. As part of its growth strategy, the company proposed to establish a new, automated manufacturing unit (Proposed Unit II) with an installed capacity of 1,20,000 MT to further capture market opportunities.

End-User Industries and Customer Base

Madhur Iron & Steel’s products cater to a diverse range of end-use industries, including:

• Railway electrification and state electricity boards

• Power and energy infrastructure

• Telecom tower manufacturing

• Automotive and ancillary units

• Offshore structure fabrication

• Construction and real estate

• General engineering and auto body manufacturing

The company has built long-standing relationships with key customers, including Kalpataru Projects International Limited and Tata Projects Limited, which has led to repeat orders and consistent business growth.

Quality and Certifications

Commitment to quality is a cornerstone of the company’s operations. It maintains a dedicated quality control department with qualified professionals to oversee the entire production process. Key certifications include:

• ISO 9001:2015 for Quality Management System

• ISO 14001:2015 for Environmental Management System

• ISO 45001:2018 for Occupational Health and Safety

• Bureau of Indian Standards (BIS) Licence for IS 2062:2011

• Compliance with the European Council Directive (EU) No. 305/2011 for construction products

Sustainability Initiatives

Recognizing the importance of operational efficiency and sustainability, the company was in the process of establishing a 3 MWp (DC) captive solar power plant. This initiative was aimed at ensuring a reliable and uninterrupted power supply for its manufacturing operations, reducing dependence on the grid, lowering power costs, and aligning with its broader sustainability objectives.

Industry Outlook

Indian Steel Industry: Poised for Robust Growth

The Indian steel industry is a critical pillar of the nation’s economy, driven by strong demand from infrastructure, construction, automotive, and capital goods sectors. Finished steel consumption in India has grown at a CAGR of approximately 8.7% between Fiscal 2020 and Fiscal 2025, reaching 152 million tonnes in Fiscal 2025. According to a CareEdge Report, total finished steel demand in India is projected to reach around 230 million tonnes per annum by Fiscal 2031, indicating a sustained growth trajectory.

Growth Drivers and Future Prospects

• Infrastructure Push: The government’s continued focus on infrastructure development, including the National Infrastructure Pipeline (NIP) and Gati Shakti initiative, is a primary demand driver. A budgetary allocation of ₹6,150 crore for railway electrification in FY 2025–26 underscores this commitment.

• Power Transmission Expansion: India’s power transmission network has expanded exponentially, from 34,000 Ckm in 1980 to over 496,000 Ckm by FY 2024–25. This expansion, particularly in high-voltage categories, fuels demand for transmission line towers and structural steel.

• Railway Electrification: As of August 31, 2025, 99.1% of the Broad Gauge route network was electrified, reinforcing a sustained demand for the structural steel products required for this infrastructure.

• Strong Production Growth: India’s finished steel production has shown robust growth, increasing at a CAGR of 7.4% from FY20 to FY25, reaching 147 million tonnes, and registering 9.5% year-on-year growth in YTDFY26. This reflects a favourable demand environment.

Market Outlook for Structural Steel

The outlook for the structural steel segment, which Madhur Iron & Steel (India) Limited operates in, is intrinsically linked to these growth drivers. As the nation invests heavily in its core infrastructure, the demand for products like Angles, Channels, and MS Sections is expected to remain consistently high. The company’s focus on quality and its strategic location position it well to benefit from this positive industry tailwind.

How Will Madhur Iron & Steel (India) Limited Benefit

Based on the robust industry outlook, Madhur Iron & Steel (India) Limited is poised to benefit in several ways:

• Capitalize on the projected growth in finished steel demand, which is expected to reach 230 million tonnes by FY31, providing a larger market for its products.

• Leverage the increased budgetary allocation for railway electrification and other infrastructure projects to secure new orders for its structural steel products.

• Benefit from the expanding power transmission network, with its expertise in manufacturing components for high-voltage transmission lines.

• Utilize its strategic location near the Bhilai Steel Plant to gain a competitive edge through lower raw material procurement and logistics costs.

• Enhance its market share by catering to the sustained demand from key sectors such as power, railways, telecom, and construction.

• Improve profitability by reducing reliance on grid power through its proposed captive solar power plant, leading to lower and more predictable energy costs.

• Strengthen its export potential by leveraging its international quality certifications (EU compliance) to tap into global markets.

• Outperform smaller, unorganized competitors by offering a combination of consistent quality, timely delivery, and a diversified product portfolio.

• Achieve economies of scale with the proposed expansion of manufacturing capacity, enabling it to handle larger orders and reduce per-unit costs.

• Improve its financial health by utilizing IPO proceeds to repay debt, thereby reducing interest costs and strengthening its balance sheet for future growth.

Peer Group Comparison

Particulars	Revenue (₹ in lakh)	Face value (₹ )	EPS (₹)	RoNW (%)	NAV (₹)
Madhur Iron & Steel (India) Limited	19,269.52	10.00	3.28	9.44	34.84
Peer Group
Mahamaya Steel Industries Limited	39,585.13	10.00	1.86	-86.51	–
M.P.K. Steels (I) Limited	9,274.84	10.00	2.40	–	–
Skipper Limited	2,52,299.70	10.00	7.22	–	–
Mittal Sections Limited	7,028.00	10.00	2.97	–	–

Key Strategies for Madhur Iron & Steel (India) Limited

Expansion of Manufacturing Facilities

Madhur Iron & Steel (India) Limited aims to expand its manufacturing footprint by establishing a new automated facility (Proposed Unit II) with an installed capacity of 1,20,000 MT. This expansion is intended to capitalize on the sustained demand in the structural steel market, enhance service levels, and achieve significant operational efficiencies and cost benefits through economies of scale, thereby reinforcing its competitive position.

Enhance Forward Integration and Synergy

The company intends to strengthen its business model by acquiring and operationalizing a facility (Proposed Unit I) to manufacture engineered steel products. This forward integration strategy will enable captive consumption of its own structural steel, reducing reliance on external fabricators. This is expected to enhance quality control, improve capacity utilization, and diversify the product portfolio for infrastructure projects.

Reduce Debt Levels and Improve Debt to Equity Ratio

A key strategic objective is to utilize a portion of the Net Proceeds to repay or prepay outstanding term loans. This substantial reduction in overall debt is expected to strengthen the balance sheet, enhance financial flexibility, and significantly lower interest costs. The resulting improvement in the debt-to-equity ratio will support sustainable profitability and long-term value creation for shareholders.

Developing Sustainable and Reliable Energy Infrastructure

The company is focused on establishing a 3 MWp (DC) captive solar power plant to ensure a reliable and uninterrupted power supply for its manufacturing operations. This initiative aims to reduce dependence on external power sources, mitigate risks from tariff volatility, and lower per-unit power costs. Over time, this will improve operating margins and support scalable capacity expansion.

Continuous Upgradation of Quality Standards and Product Diversification

Madhur Iron & Steel is committed to maintaining and upgrading its quality standards to align with both Indian and international benchmarks. By adhering to multiple global specifications and maintaining key ISO certifications, it aims to serve a broad customer base and capitalize on export opportunities. This, combined with a diversified product portfolio, will mitigate demand cyclicality and strengthen long-term customer relationships.