Vibhor Steel Tubes Establishes Unit in Odisha to Expand Capacity to 3.41 Lakh Tonne

Vibhor Steel Tubes Ltd (VSTL) is venturing into new territory with the establishment of a new unit in Sundargarh, Odisha, aimed at bolstering its total manufacturing capacity to 3.41 lakh tonnes, as confirmed by a company spokesperson on Wednesday. The Hisar-based steel manufacturer currently operates two plants-one in Mahabubnagar, Telangana, and another in Raigad, Maharashtra-with a combined installed capacity of 2.21 lakh tonnes.

Vijay Kaushik, the chairman of VSTL, shared during an interaction with reporters, "With the commissioning of the third project in Odisha, our capacity will increase by 1,20,000 MT to 3,41,000 MT."

In response to inquiries regarding the project timeline, Kaushik outlined the objective of making the plant operational by the first quarter of the financial year 2024-25. He further disclosed that the company has secured the necessary land for the project and has already placed orders for plant and machinery, with funding to be sourced through internal accruals.

Details regarding the investment were withheld due to regulatory obligations, as VSTL is currently in the process of listing on BSE and NSE. The Initial Public Offering (IPO) for Vibhor Steel Tubes is slated to open on February 13 and close on February 15, with a price range set at Rs 141-151 per share. The IPO includes a fresh issue of equity shares valued at up to Rs 72.17 crore through the book-building route.

Khambatta Securities has been appointed as the sole book-running lead manager for the offer, with KFIN Technologies serving as the registrar. The proceeds from the issue are earmarked for fulfilling working capital requirements.

VSTL specializes in the production of steel products such as electric resistance welded pipes, hot-dipped galvanized pipes, and hollow section pipes. The new facility will focus on manufacturing value-added products like crash barriers and monopoles, aimed at enhancing margins.

Kaushik also revealed plans to explore export markets once the new production facility becomes operational, leveraging proximity to raw material supply to reduce freight costs post-expansion. Additionally, the company has renewed its agreement with Jindal Pipes, effective from April 1, 2023, to manufacture and supply finished goods under the Jindal Star brand. The agreement, with a tenure of six years, is subject to renewal by mutual consent, as noted by the company official.

ET