A-One Steels India IPO

Strengths · 8

• 01Profit recovered strongly in FY2026, reaching Rs 127.41 crore against Rs 7.71 crore in FY2025.
• 02EBITDA nearly doubled in the last year, from Rs 174.06 crore to Rs 303.64 crore.
• 03Net worth has almost doubled in two years, from Rs 421.79 crore in FY2024 to Rs 819.52 crore in FY2026.
• 04Being backward integrated matters in steel. Making its own billets and converting them into coils, pipes, tubes and TMT bars means it captures margin at several stages instead of one.
• 05It also sells met coke and ferrosilicon in the open market, which are inputs other steel makers need, so it is not dependent on finished steel demand alone.
• 06Long term solar and wind power agreements of 15 to 25 years give it more predictable energy costs than peers buying grid power, and its TMT bars are certified as green products by the CII.
• 07The six plants sit near iron ore sources and within 450 km of the Ennore, New Mangalore and Goa-Mormugao ports, which cuts both inbound and outbound freight.
• 08Rs 250 crore of the Rs 405 crore issue repays borrowings, which should reduce interest cost meaningfully.

Risks · 8

• 01At the upper band of Rs 405 the P/E is about 24.55 times on an EPS of Rs 16.50, which is a high multiple for a steel maker earning a 3.04% margin.
• 02Profit is extremely volatile. It was Rs 38.91 crore in FY2024, collapsed to Rs 7.71 crore in FY2025 and then jumped to Rs 127.41 crore in FY2026, so one good year should not be read as the new normal.
• 03The profit margin is very thin at 3.04%. On income of Rs 4,202.05 crore the company kept Rs 127.41 crore.
• 04Debt is high. Total borrowing was Rs 1,010.94 crore against a net worth of Rs 819.52 crore, a debt to equity ratio of 1.17, and it has stayed around Rs 1,000 crore for three years.
• 05Sales are not growing steadily either. Total income fell from Rs 3,862.44 crore in FY2024 to Rs 3,569.63 crore in FY2025 before recovering.
• 06Steel is a cyclical, price driven commodity. Earnings move with steel prices, iron ore costs and construction demand, none of which the company controls.
• 07Return on capital employed is only 12.86%, which is modest for the amount of capital tied up in six plants.
• 08Promoter holding will come down from 85.86% to 74.51% after the issue.

A-One Steels India Limited was started in 2012. It is a backward integrated steel maker, which means it makes the raw material it later shapes rather than buying it in. Its range covers both long steel and flat steel products, along with industrial products used by other steel makers.

From its own MS billets it makes HR and CR coils, which it then converts into HR pipes, CR pipes and galvanized tubes. From the same billets it makes TMT bars, which are the ribbed rods used in construction. Alongside this it makes met coke and silicon manganese and ferrosilicon, which it sells in the open market. Ferrosilicon is used by the steel industry for alloying.

The company buys a large share of its power as green energy, holding solar and wind power purchase agreements running 15 to 25 years for its plants in Karnataka and Andhra Pradesh. Its TMT bars are certified as green products by the CII and are made at the Gauribidanur and Hindupur plants. It has six manufacturing facilities in all, five in Karnataka at Gauribidanur, Bellary, Koppal and Chikkantapur, and one at Hindupur in Andhra Pradesh. These sit close to major iron ore sources and within 450 km of the Ennore, New Mangalore and Goa-Mormugao ports.

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