Bombay Coated and Special Steels Ltd

About the company:

Bombay Coated and Special Steels Limited, incorporated in 2019 and operating from its registered and corporate office at 2602, Parinee I, 7-A Shah Industrial Estate, Andheri (West), Mumbai, is a steel processing centre engaged in converting steel coils into value-added processed steel products. Its core competencies are precision slitting, cut-to-length processing, shearing and embossing of steel coils into slit coils, embossed slit coils, blanks, embossed blanks and sheared blanks. The company operates as an intermediary between primary steel producers and end-users, serving Original Equipment Manufacturers and Original Design Manufacturers, and in addition to processing it performs logistics and inventory management functions, holding buffer stock and offering just-in-time delivery. For the home and commercial appliances sector it processes coated and hot-rolled coils; for the general engineering sector it processes non-coated and galvanised plain coils into blanks used in automotive manufacturing, pharmaceutical cleanroom infrastructure, electrical equipment and ventilation systems.

Promoter Vijaykumar Himatrai Gupta commenced operations in 1983 as a steel trader under the sole proprietorship M/s. Bombay Steels. The business expanded into steel processing in 2012 with the establishment of the Bhiwandi facility, followed by a service partnership agreement with JSW Steel Coated Products Limited in 2018. On January 29, 2021 the Company entered into a Business Transfer Agreement to acquire the running business of M/s. Bombay Steels on a going-concern basis, consolidating over four decades of trading and processing experience into the Company. It has been an authorised service partner of JSW Steel Coated Products Limited and/or its holding company since 2021, procuring steel coils under that arrangement and from other suppliers.

The company operates four manufacturing facilities, at Wada and Bhiwandi in Maharashtra, Ghiloth in Rajasthan and Sri City in Andhra Pradesh, aggregating 42,209 square metres and all certified to ISO 9001:2015 for the processing, marketing and supply of processed steel products; the Ghiloth and Sri City facilities are recognised as GEM-4 certified green facilities. Aggregate installed capacity across slitting, cut-to-length, shearing and embossing operations was 4,62,411 metric tons in Fiscal 2026 against actual production of 2,72,011 metric tons, a blended utilisation of 58.82%. Installed capacity increased at a compound annual growth rate of approximately 23.83% between Fiscal 2024 and Fiscal 2026. The company served 261 customers in Fiscal 2026 and had 160 permanent employees and four retainership employees as of June 30, 2026. In Fiscal 2026 it reported revenue from operations of Rs.1,266.82 Crore, adjusted EBITDA of Rs.86.09 Crore and profit after tax of Rs.30.54 Crore.

IPO Details

Objects of the Offer

The Issue is entirely a Fresh Issue and the Company will receive the whole of the proceeds, which it proposes to deploy towards the following objects.

Key Strengths and Opportunities

• Established relationship with JSWSCPL for the supply of steel coils
  The Company has been an authorised service partner of JSW Steel Coated Products Limited and/or its holding company since 2021, under which JSWSCPL supplies galvanised plain, colour-coated and galvalume coils used as raw material. JSWSCPL supplied Rs.1,034.21 Crore of steel coils in Fiscal 2026, being 86.65% of total purchases, against Rs.869.18 Crore and 90.61% in Fiscal 2025 and Rs.557.94 Crore and 84.58% in Fiscal 2024, with other suppliers accounting for the balance. JSWSCPL also provides technical assistance to ensure compliance with prescribed product specifications, and quality control procedures jointly established with JSWSCPL and aligned with its benchmarks are implemented across the Company's operations to ensure consistency and traceability. The arrangement supports business engagement with OEMs and ODMs in the home and commercial appliances sector and other segments of general engineering, particularly where customised processing of JSWSCPL-manufactured coils is required, and facilitates continuity in raw material sourcing.

• Long-standing relationships with customers, including OEMs and ODMs
  The customer base includes Haier Appliances India Private Limited, IFB Refrigeration Limited, Dixon Electro Manufacturing Private Limited, Amber Enterprises India Limited, Western Refrigeration Private Limited, PG Technoplast Private Limited, EPack Durable Limited, Kruger Ventilation Industries (India) Private Limited, Elegant Coatings Private Limited and Magnum MI Steel Private Limited. The Company served 261 customers in Fiscal 2026 against 252 in Fiscal 2025 and 225 in Fiscal 2024, of which 186, 165 and 139 respectively were existing customers, and derived 96.08% of restated revenue from operations from existing customers in Fiscal 2026 against 93.76% and 87.88% in the two preceding years. ODMs contributed Rs.708.39 Crore or 55.92% of Fiscal 2026 revenue and OEMs ?548.28 Crore or 43.28%. Revenue from the top 10 customers was Rs.903.60 Crore in Fiscal 2026, or 71.33% of total revenue from operations, against 67.44% in Fiscal 2025 and 67.43% in Fiscal 2024.

• Strategically located manufacturing network enabling just-in-time supply
  The Company operates as a multi-location steel processing centre with facilities at Wada and Bhiwandi in Maharashtra, Ghiloth in Rajasthan and Sri City in Andhra Pradesh, positioned in proximity to major OEM and ODM manufacturing hubs across Western, Northern and Southern India. The Wada facility sits on the Mumbai–Ahmedabad Highway and Bhiwandi on the Mumbai–Nashik Highway, serving industrial clusters around Pune, Nashik, Vasai-Virar, Boisar, Umbergaon, Khopoli, Silvassa, Aurangabad and Vadodara; Ghiloth lies on the Delhi–Jaipur Highway approximately 90 kilometres from Indira Gandhi International Airport and serves Gurgaon, Noida, Manesar, Jhajjar, Rudrapur and Dehradun; Sri City sits on the Kolkata–Chennai National Highway within an industrial corridor comprising a Special Economic Zone, Domestic Tariff Zone and Free Trade and Warehousing Zone, approximately 100 kilometres from Chennai International Airport. In Fiscal 2026 Ghiloth contributed Rs.542.78 Crore or 42.85% of revenue from operations, Wada Rs.537.06 Crore or 42.39%, Sri City Rs.110.12 Crore or 8.69% and Bhiwandi Rs.70.86 Crore or 5.59%. Each facility has dedicated storage infrastructure for bulk storage of coils and processed products, and buffer stocks are maintained to mitigate supply-chain disruption.

• Integrated and advanced steel processing infrastructure
  The Company has established integrated processing infrastructure comprising high-precision slitting, cut-to-length, shearing and embossing lines, with machinery procured from a mix of reputed domestic manufacturers and international suppliers based in South Korea, Turkiye and China, and all facilities certified to ISO 9001:2015. Its slitting lines process steel coils into slit coils with widths ranging from 22 mm to 1,850 mm and thicknesses from 0.25 mm to 3.20 mm, while the cut-to-length lines process coils into blanks with widths from 150 mm to 1,320 mm and thicknesses from 0.25 mm to 5.50 mm. The shearing lines enable precise straight-edge cutting for downstream fabrication and the embossing lines deliver uniform textured and patterned surfaces. This integrated capability allows the Company to supply ready-to-use processed steel products tailored to customer-specific technical, dimensional and surface finish requirements across the home and commercial appliances and general engineering sectors.

• High entry barriers from authorised supplier arrangements, capital intensity and customer approvals
  The industry is characterised by relatively high entry barriers arising from substantial capital investment in specialised processing equipment, inventory holding requirements, customer qualification processes and technical approval standards. Customers require products conforming to precise specifications linked to end use: refrigerator outer panels require scratch-free surfaces with uniform embossed patterns, while air conditioner components require tight dimensional tolerances and consistent surface finishes compatible with downstream coating and fabrication. Facilities must generally be located close to customer manufacturing units to support just-in-time delivery, so serving multiple regions requires multiple processing centres and substantial capital expenditure in land, buildings, plant and machinery. Vendor onboarding by OEMs and ODMs involves detailed technical evaluations, quality audits and validation processes conducted directly or through appointed technical consultants, and the Company's facilities are subject to periodic audits to maintain approved vendor status.

Key Risks

• Substantial dependence on a single supplier, with contractual restrictions on sourcing elsewhere
  The Company sourced approximately 86.65%, 90.61% and 84.58% of its total steel coil requirements from JSWSCPL in Fiscals 2026, 2025 and 2024, and 85.13% in the three months ended June 30, 2026. As an authorised service partner it is subject to restrictions on procuring galvanised plain, colour-coated and galvalume coils and sheets from other suppliers, and sourcing such products elsewhere risks the loss of its authorised service partner status, which the Company states could significantly impair its sourcing arrangements, customer relationships and business model. The arrangement grants no exclusive territorial rights, and JSWSCPL is entitled to appoint additional authorised service partners within the Company's operating regions, expand its partner network or expand its own steel processing facilities. (Risk Factor 1)

• High debt to equity ratio
  The debt to equity ratio was 2.78 times as at March 31, 2026, against 3.33 times and 4.31 times as at March 31, 2025 and March 31, 2024, and 2.00 times as at June 30, 2026, while the debt service coverage ratio declined from 1.98 times in Fiscal 2024 to 1.77 times and 1.75 times in the two following years and 1.44 times in the June 2026 quarter. The Company states that this level of leverage exposes it to higher interest obligations, increased sensitivity to interest rate changes, reduced financial flexibility and restrictions under financing covenants, and that in adverse conditions its cash flows may be insufficient to meet debt servicing requirements. Return on capital employed over the same periods was 16.40%, 18.78% and 18.60%. (Risk Factor 8)

• Raw material cost dominates the cost base and is exposed to steel price volatility
  The cost of raw materials and components consumed was Rs.1,112.38 Crore in Fiscal 2026, equal to 90.51% of total expenses and 87.81% of revenue from operations, against 92.97% of total expenses in Fiscal 2025 and 89.14% in Fiscal 2024. Steel coils are the principal raw material and their price and availability are subject to volatility and supply constraints from factors outside the Company's control, including global and domestic demand-supply dynamics, logistics and processing costs, inflation, government policy, duties and taxes, trade restrictions and currency movements. (Risk Factor 5)

• Revenue concentration in the Home and Commercial Appliances sector
  The Home and Commercial Appliances sector contributed 86.54%, 81.80% and 77.41% of revenue from the sale of products in Fiscals 2026, 2025 and 2024 respectively, and 89.93% in the three months ended June 30, 2026. Demand in that sector is subject to seasonality and cyclicality, generally peaking during the Indian summer and festive seasons, which the Company states may result in fluctuations in sales volumes, uneven revenue recognition and variations in capacity utilisation across fiscal quarters. Any slowdown, reduced demand or adverse development affecting the sector could materially affect results. (Risk Factor 6)

• Rising revenue concentration in the top ten customers
  The top ten customers contributed 71.33%, 67.44% and 67.43% of revenue from operations in Fiscals 2026, 2025 and 2024 and 73.54% in the three months ended June 30, 2026, while the top five contributed 55.41%, 51.34% and 48.47% over the same three Fiscals. The largest customer was Amber Enterprises India Limited in Fiscals 2026 and 2025 and Western Refrigeration Private Limited in Fiscal 2024, and as of June 30, 2026 the Company had relationships of over three years with several of its top ten customers. The Company states that the loss of any key customer, or a significant reduction in business from them, could have a material adverse effect on its business, results of operations, financial condition and cash flows. (Risk Factor 4)

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