Avtar Steel IPO

India's economy is expected to maintain steady growth, supported by manufacturing and construction activity. Real GVA from manufacturing grew by 10.7% in FY26, while construction recorded 7.4% growth, supporting demand for steel and related products. 

Global crude steel production remained broadly stable between CY20 and CY25, declining from 1,883 MT to 1,849 MT, representing a CAGR of around -0.4%. Weak real estate activity in China and subdued manufacturing in Europe have weighed on global steel demand. 

India is the world's second-largest steel producer and consumer. Domestic finished steel consumption increased at a CAGR of 8.6%, reaching around 164 MT in FY26, supported by infrastructure development, construction and urbanisation. 

The global stainless-steel market is projected to reach USD 178.6 billion by CY30, growing at a CAGR of 7.6%. In India, the stainless-steel market is expected to reach ₹1,704 billion by FY30, registering a CAGR of 8.2%. 

Stainless-steel long products such as bars, rods, wires and sections are expected to grow faster than flat products. Globally, the long products segment is projected to grow at a 9.6% CAGR, while in India it is expected to grow at 9.0%, compared with 7.9% for flat products. 

India's aerospace and defence stainless-steel market is projected to grow at a 21.9% CAGR, supported by defence indigenisation, higher capital expenditure and domestic manufacturing initiatives. 

The marine and coastal infrastructure segment is expected to grow at a 14.4% CAGR, supported by initiatives such as the Sagarmala programme and increasing use of corrosion-resistant stainless steel in infrastructure. 

Demand from building and construction is projected to grow at 11.5% CAGR through FY30, supported by smart cities, urbanisation and investments in climate-resilient infrastructure. 

The power and renewable energy segment is expected to grow at a 10.8% CAGR, driven by grid modernisation, renewable energy projects and related infrastructure requirements. 

Stainless-steel demand from the oil and gas sector is projected to increase at a 10.2% CAGR, supported by LNG terminal expansion and cryogenic storage projects. 

India's speciality steel market is projected to reach ₹3,436 billion by FY30. Demand for alloy and speciality steel is expected to be supported by applications such as gears, crankshafts, structural components and industrial equipment.  

Aluminium wire rods are expected to benefit from rising demand for power transmission cables, EV electrification and the substitution of copper in selected applications. 

The industry continues to receive support from initiatives such as the National Steel Policy 2017, which targets 300 MTPA of crude steel capacity by FY31, along with Atmanirbhar Bharat, BIS Quality Control Orders and the Specialty Steel PLI Scheme. 

Steel manufacturers remain exposed to fluctuations in raw material prices and dependence on imported alloying elements such as nickel and molybdenum. Domestic production capacity for specialised grades, including duplex and super-duplex stainless steel, also remains limited. 

The company operates three manufacturing units across 33.54 acres in Sonipat, Haryana, and New Delhi. Their locations provide access to National Highway 44, industrial clusters, rail networks, the Sonipat Inland Container Depot and ports, supporting domestic distribution and exports.  

Steel scrap is the company's primary metallic raw material. It uses materials such as low-yield scrap, dust, fines, and chips, which have a recovery rate of around 75% to 80%. This helps reduce dependence on virgin raw materials and supports its recycling-focused manufacturing model.  

Avtar Steel's consolidated revenue from operations increased from ₹11,026.43 million in FY24 to ₹12,633.41 million in FY26. During the same period, EBITDA increased from ₹512.54 million to ₹1,129.85 million, while EBITDA margin improved from 4.65% to 8.94%. The company reported a RoCE of 20.74% in FY26.  

Avtar Steel is a participant in the Government of India's PLI Scheme 1.2 for Specialty Steel. Under its MoUs with the Ministry of Steel, the company is eligible for incentives of 11% to 13% on incremental production of alloy steel long products and 7% to 10% on stainless steel wire.  

Managing Director Sumit Jindal has more than 19 years of experience in the stainless-steel industry. The company also has an experienced senior management team, while 17 of its top 30 customers have maintained relationships with the company for more than 5 years.  

Avtar Steel currently has a downstream wire rod and bar rolling capacity of 120,000 MTPA, compared with an in-house melting capacity of 72,000 MTPA. The company plans to use ₹200 crore from the IPO proceeds to establish a new 100,000 MTPA Specialty Steel Melting Division in Sonipat. The facility is expected to improve backward integration and support the utilisation of downstream capacity.  

The new melting facility will allow the company to manufacture blocks and blooms of alloy steel, carbon steel, and valve steel. The alloy steel segment is projected to grow at a 6.2% CAGR between FY26 and FY30, supported by demand from automobiles, defence, railways and industrial machinery.  

The company plans to install multi-stage drawing machines to manufacture stainless steel fine wires with diameters ranging from 6 mm to 0.2 mm. These products can cater to applications in medical devices, aerospace, automotive, and electronics.  

Avtar Steel has acquired a 60% controlling stake in Aluex Wires Private Limited, giving it access to the aluminium wire rod market. The market is projected to grow at an 11.1% CAGR from FY26 to FY30, driven by demand from power transmission, renewable energy and electric vehicles.  

India's stainless-steel market is projected to reach ₹1,704 billion by FY30, growing at a CAGR of 8.2%. Infrastructure development, metro projects, urbanisation and investments in areas such as green hydrogen could support demand for stainless steel products.  

Avtar Steel has been exporting its products since 2010 to markets including the UK, South Korea, Italy, Turkey and Vietnam. Its engagement with a European business development agent could help expand its presence in international markets and diversify its customer base. 

Stainless-steel scrap and ferroalloys such as nickel, chromium, molybdenum, silicon, manganese and niobium account for a major share of the company's expenses. 

Raw material consumption represented 80.75%, 81.43% and 83.43% of total expenses in FY26, FY25 and FY24, respectively. Since Avtar Steel does not have a formal hedging policy and purchases raw materials mainly through spot or purchase orders, sharp commodity price movements could affect margins. 

The company relies heavily on stainless-steel scrap for production. Contaminated or incorrectly segregated scrap can reduce recovery rates, increase rejection, damage equipment and affect the quality of finished products. 

All three manufacturing facilities are in Sonipat, Haryana, exposing the company's operations to location-specific disruptions. Any major power outage, natural event, labour issue or other operational disruption could affect production across multiple facilities. 

The company's facilities fall under the National Capital Region (NCR) and are subject to environmental restrictions imposed under the Graded Response Action Plan (GRAP). The company's Hot Rolling and Cold Finishing Facility has previously faced temporary closure following a regulatory notice. Similar restrictions in the future could disrupt production and customer deliveries. 

Steel manufacturing requires significant funds for raw material inventories, work-in-progress and customer receivables. The company reported negative cash flow from operating activities in FY25 and FY24, highlighting its exposure to working capital requirements. 

The company plans to use ₹200 crore of IPO proceeds for its new Specialty Steel Melting Division in Sonipat. The project has not been appraised by a bank, financial institution or independent agency and is based on management estimates. Construction delays, cost overruns, technical issues or delays in stabilising operations could affect the planned expansion. 

Avtar Steel does not have long-term contracts with volume commitments from customers. Buyers place orders based on their requirements and may reduce or cancel orders, which could affect production planning, inventory levels and revenue visibility.  

A significant portion of the company's domestic revenue comes from the Northern and Western regions of India. A slowdown in these markets or disruptions affecting key industrial clusters could impact demand and sales. 

The company has certain historical corporate records and regulatory filings that are not traceable and has also faced instances of delayed filings. These matters could result in regulatory scrutiny, penalties or other statutory actions. 

Litigation is pending before the District Court of Sonipat following the death of an electrician, Ashwani Kumar, at the company's Wire Rod and Bar Division. The deceased's family has filed a compensation claim of ₹2.50 million. 

Avtar Steel is involved in 5 direct tax cases involving ₹30.45 million and 6 indirect tax cases involving ₹115.29 million. Adverse outcomes in these matters could result in additional financial liabilities. 

As of July 31, 2026, the company had outstanding borrowings of ₹3,393.47 million. Its financing arrangements include restrictive covenants, while personal and corporate guarantees have also been provided by the promoters. Any default could increase financial pressure and restrict the company's operational flexibility. 

Avtar Steel IPO DRHP

Systematix Corporate Services Limited 

Contact Number: 040-79615565 

Email Address: avtarsteel.ipo@kfintech.com