₹4,000 crore IPO pipeline: Steel companies prepare public issues amid safeguard duty boost

The policy intervention follows a muted year for steel IPOs in 2025, when only a few mainboard listings came to market and several issues struggled to sustain post-listing performance.

The safeguard duty, effective April 21, 2025, is expected to improve near-term pricing visibility for domestic producers by raising the landed cost of imports and reducing price undercutting.

According to industry insiders, the policy intervention is bound to help revive several fundraising plans that were earlier deferred amid weak equity sentiment, softer demand and sustained import pressure.

"Safeguard duty is expected to improve sector visibility and pricing discipline, which can help restore investor confidence. At the same time, companies that are well-positioned on cost efficiency, product diversification and balance-sheet strength are likely to be better placed to access capital markets as conditions stabilise," said Sandeep Kumar, Managing Director, A-One Steels.

The IPO pipeline remains sizable, with more than a dozen steel and allied companies at various stages of the listing process.

On the mainboard, several companies, including AOne Steels India Ltd, Jindal Supreme (India) Ltd, Steel Infra Solutions Co. Ltd, Rajputana Stainless Ltd, German Green Steel & Power Ltd., Renny Strips Ltd, R.K. Steel Manufacturing Co. Ltd, and Karamtara Engineering Ltd are preparing to tap the IPO market, according to merchant bankers.

In the SME segment, companies including R.P. Multimetals Ltd, Elec Steel Processing Industries Ltd and Kasturi Metal Composite Ltd have received exchange approvals but are awaiting more favourable market conditions before launching their issues.

Together, these companies are expected to raise over ₹4,000 crore from their maiden public offerings.

"The safeguard duty has improved near-term pricing discipline and earnings visibility and this is, encouraging several issuers with approvals in hand to revisit capital market plans, subject to broader market conditions. We estimate that steel and steel-linked companies could collectively raise around ₹4,000 crore through the IPO route over the next 12-18 months," Priyesh Shantilal Jain, Director, Socradamus Capital, said.

IPO proceeds are expected to be deployed towards capacity expansion, entry into value-added steel segments, strengthening integration and reducing leverage, said Deep Jain, Senior Manager at Mumbai-based investment banking firm Unistone Capital.

Some issuers are also expected to allocate funds for green steel initiatives, aimed at improving ESG credentials and supporting long-term valuation re-rating.

"Moreover from a capital markets perspective, deal timing and valuations will continue to be driven by earnings sustainability, balance-sheet strength and visibility beyond the duty period. Of course, safeguard duty provides some near-term support," Jain added.

From a capital markets perspective, the safeguard duty is seen as a near-term tailwind for steelmakers, though industry participants stress that sustainable valuations will hinge on strong fundamentals over the long run.

Foreign broking firm Jefferies in a recent note said that clearer pricing trends and margin stability are particularly important for investor confidence in cyclical sectors such as steel.

The broking firm also said Indian steel companies could see volume growth of 6-9% CAGR (compound annual growth rate) over FY26-28, adding that the reinstatement of safeguard duty should further lift domestic steel prices and support regional spreads.