German Green Steel & Power IPO

Strengths · 8

• 01Profit has almost doubled in two years, from Rs 41.67 crore in FY2024 to Rs 59.94 crore in FY2025 and Rs 79.89 crore in FY2026.
• 02EBITDA has more than doubled over the same period, from Rs 80.11 crore to Rs 166.96 crore.
• 03Sales have grown steadily, from Rs 1,137.54 crore in FY2024 to Rs 1,685.38 crore in FY2026.
• 04The issue is priced moderately at about 13.11 times earnings on an EPS of Rs 10.60, with RoCE of 19.31% and RoNW of 18.86%.
• 05The Samakhiyali plant is vertically integrated, so the company makes its own sponge iron and billets rather than buying them, which protects margin when input prices rise.
• 06The German TMT brand has established recognition in Gujarat, which is unusual for a regional steel maker and supports pricing.
• 07Being close to the Gujarat ports cuts freight on both imported raw material and outbound shipments.
• 08Rs 226.33 crore of the issue money goes into expanding the Samakhiyali plant and building a hybrid wind and solar power plant, which should reduce energy cost over time.

Risks · 8

• 01The profit margin is thin at 4.76%. Steel is a commodity and the company keeps under five paise of every rupee of sales.
• 02Borrowing was Rs 334.37 crore against a net worth of Rs 421.55 crore, a debt to equity ratio of 0.79.
• 03The business is concentrated in Gujarat and western India, so a slowdown in construction in that region affects nearly all of it.
• 04Steel prices, iron ore and coal costs are cyclical and set by the market, not by the company.
• 05Two of its three products, MS billets and sponge iron, are intermediate commodities sold with no brand premium at all.
• 06It is expanding sponge iron and billet capacity at the same time, which brings execution risk and a period where the new capacity costs money before it earns.
• 07This is a fresh issue combined with an offer for sale, so a part of the money goes to the selling shareholders and not to the company.
• 08Promoter holding will come down from 96.63% to 68.54% after the issue.

German Green Steel and Power Limited was started in 2008. It is an iron and steel maker working mainly in western India, with its strength in Gujarat and its focus on TMT bars, the ribbed rods used to reinforce concrete.

It sells business to business, to three kinds of customer: distributors, dealers and institutional buyers. Its brand German TMT has built recognition for TMT bars in Gujarat. Its products are TMT bars in sizes from 8 mm to 40 mm, along with MS billets and sponge iron, which are the intermediate materials that go into making steel.

Its corporate and registered office is in Ahmedabad. It runs two manufacturing facilities in Gujarat. The Samakhiyali facility is vertically integrated, meaning it makes its own intermediate material rather than buying it, and sits close to the Gujarat ports. The Viramgam facility is operated through its material subsidiary German TMX Private Limited. The company is expanding its sponge iron capacity at Samakhiyali from 66,000 tonnes a year to about 1,48,500 tonnes, and is raising its MS billet capacity from 2,14,500 tonnes a year as well.

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