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Sampat Aluminium coming with IPO to raise Rs 30.53 crore
Sep-16-2025

Sampat Aluminium

  • Sampat Aluminium is coming out with an initial public offering (IPO) of 25,44,000 equity shares in a price band of Rs 114-120 per equity share.
  • The issue will open on September 17, 2025 and will close on September 19, 2025.
  • The shares will be listed on SME Platform of BSE.
  • The face value of the share is Rs 10 and is priced 11.40 times of its face value on the lower side and 12.00 times on the higher side.
  • Book running lead manager to the issue is Marwadi Chandarana Intermediaries Brokers.
  • Compliance Officer for the issue is Bhushan Pramod Puranik.

Profile of the company

Sampat Aluminium is engaged in the manufacturing of aluminium long products i.e. aluminium wires and aluminium rods, primarily through the procurement of Aluminium ingots, rods, wires and also by recycling of aluminium scrap. It manufactures a wide range of continuously cast and hot-rolled aluminium products, utilizing the ‘Properzi process’. The company’s Product Portfolio consists of Aluminium Wire in sizes of 5.5 MM and 6.5 MM and Aluminium Rods in sizes of 7.5 MM, 9.5 MM, 12.5 MM, 16 MM & 20 MM as per customer specifications. Aluminium and its alloys are essential materials in various mechanical and electrical applications, including the distribution and transmission of electricity, as well as in the production of transformers. 

Aluminium wires and rods are widely used across various industries due to aluminium's properties such as being lightweight, corrosion-resistant, conductive, and relatively inexpensive. The company majorly supplies its products to electrical power, construction, manufacturing, building wiring and steel industries Further, there have been certain instances wherein it has provided job work services for supplying of aluminium rods and wires, wherein its customers provide it with the raw materials and it supplies them the aluminium wires and rods as per their requirements.

The company has a manufacturing plant located at Kalol, Gujarat with an installed capacity of 8,400 MTPA. The company’s manufacturing facility is divided into sections like engineering & design, mold making, melting, casting, machining, quality check and dispatch. At its manufacturing unit, it has an in-house testing facility, for testing its raw materials using spectro analysis and finished products using tensile strength testing to match the quality standards as specified and required by its customers.

Proceed is being used for:

  • Setting up a new manufacturing facility at Borisana, Mehsana in Gujarat (Proposed facility)
  • General corporate purposes

Industry Overview

Aluminium is a recyclable environment-friendly metal having a host of applications in a number of diverse sectors - power, transportation, building, construction, packaging and many more. Increasing application, growing environmental concerns & move towards greater use of recyclable materials are driving growth in the world aluminium market. Aluminium represents the second largest metal market in the world, in volume terms, after iron and steel. The aluminium industry encompasses the extraction of the ore (bauxite) as well as primary and secondary processing of the metal. The consumption is projected to go higher in coming years with increased demands from Western and Asian markets. The major end users of aluminium include engineering sector (electrical appliances, power), transport (automobile engines, fabrications), construction (windows, door frames), packaging (aluminium foils, beverage cans) and consumer durables (refrigerators, washing machines) etc.

Moreover, while the demand in the western world is fairly distributed across usage sectors, the same is not true for India where the demand is concentrated in electrical and electronics sector. It is predicted that the demand growth of Aluminium in the India in next few years is going to be substantially higher due to projected high GDP growth in India in the coming years. Multiple initiatives of Govt. of India like Make in India, 100% rural electrification, Housing for All, Smart Cities, National infrastructure pipeline of Rs 100 lakh Crore, renewable energy and FAME (Faster adoption of manufacturing of Hybrid and EV) schemes for electric vehicles, increase in FDI etc. will boost the consumption of the metal in the country.

Extensive growth in electric vehicles, renewables, modern infrastructure, energy-efficient consumer goods and greater dependence on strategic sectors such as aerospace defence, will drive Aluminium consumption to grow at a CAGR of more than 10%. The global Aluminium consumption has been driven majorly by India and China having a growth rate of approximately 10% till pre-COVID times. India's Aluminium demand is estimated to double again by the year 2025 with the current resilient GDP growth rate driven by increasing urbanization and push for boosting domestic infrastructure, automotive, aviation, defence, and power sectors. Aluminium consumption is expected to reach 7.2 million tons in the next five years. Aluminium demand in India is expected to jump to 9 million metric tons by 2033 from about 4.5 million in FY23. While global aluminum consumption would remain tepid at 1% in CY2023, domestic aluminum demand growth is expected at a healthy 9% in FY24 and FY25.

Pros and strengths

Diversified customer base and long-standing relationship with its customers: The company has a well-diversified customer base in India, wherein it supplies custom based products. This reduces the intensity of any significant single customer’s contribution in its revenues. The company has established a distribution network that spans pan India. Its supply chain and logistics systems are designed to support efficient and timely distribution, meeting the needs of its customer base. Its diversified customer base provides it wide geographical presence in terms of coverage of different states of the country. Its distribution network leverages its marketing and reduces its concentration customer wise and state wise.

Efficient supplier network: The company has been in the business of long aluminum products for over two decades, its relationships with suppliers has been a core competitive strength for it. Due to the strength of the long-standing relationships with suppliers, the company enjoys several benefits in terms of pricing, and payment terms, all of which is passed on to its customers by the way of attractive prices, and high-quality products. It operates a standardised procurement system and procure most of its products on a purchase-order basis ensuring procurement flexibility at competitive prices. Further, it endeavors to pay its suppliers on time and are often able to procure discounts for such prompt payment.

Customized product offering: The company tailors its product portfolio to meet customer specifications, offering 5.5 MM and 6.5 MM Aluminium wire and 7.5 MM, 9,5 MM, 12,5 MM, 16 MM and 20 MM Aluminium rods. This customization capability ensures that resources are allocated efficiently to produce products that are in demand, maximizing profitability and minimizing waste. 

Risks and concerns

Maximum revenue comes from limited customers: The company derives a significant portion of its revenue from its customer. It has garnered 60.38%, 38.66% and 43.77% of its total revenue from top 5 customers for the period ended July 31, 2025, FY25 and FY24 respectively. If the company loses one or more of its significant or key customers or experience a reduction in the volume of business they provide, it could result in adverse consequences for its business, financial health, and cash flow. It cannot guarantee that it will be able to maintain the same levels of business as it has historically or secure long-term contracts with its major customers on mutually beneficial terms. Additionally, reducing its dependence on a few key customers may pose challenges in the future.

Dependent on external suppliers for its major raw material, Aluminium: The company is dependent on external suppliers for procurement of Aluminium scrap and aluminium ingots, the main raw materials for manufacturing aluminium rods and aluminium wires. If the company fails to get the required quantity and quality of Aluminium within the stipulated time, the company’s production and delivery schedules may be hampered which may have adverse impact on its business. Any major volatility in Aluminium prices may impact the immediate earnings of the company. Any problems faced by its supplier resulting in delays or non-adherence to quality requirements could adversely impact its ability to meet its customer’s requirements in time and its operations would be affected to the extent it is unable to line up supplies from alternate suppliers. Further any major fluctuations in raw material prices and its inability to recover the same from its customers may lead to reduction in profitability of the company.

Geographical constrain: The company generates a substantial portion of revenue from Gujarat and Maharashtra Region. The company has garnered 30.92% and 45.01% revenue from Gujarat and Maharashtra in FY25 respectively. Such geographical concentration of its business in the Gujarat and Maharashtra region increases its exposure to adverse developments arising out of competition, economic changes and demographic changes in the aforementioned states, which may adversely affect its business prospects, financial conditions and results of operations.

Outlook

Sampat Aluminium is engaged in manufacturing of aluminium wire rods in India. The company manufactures aluminium long products like wires and rods using aluminium ingots, rods, wires, and recycled scrap, employing the ‘Properzi process’ for continuous casting and hot-rolling. The company has Diversified customer base and long-standing relationship with its customers. On the concern side, the company is dependent on external suppliers for its major raw material, Aluminium. The demand and pricing in the aluminium industry is volatile and are sensitive to the cyclical nature of the industries it serves. Moreover, the company generates a substantial portion of revenue from Gujarat and Maharashtra Region. Any adverse developments affecting its operations in the Gujarat and Maharashtra Region could have an adverse impact on its revenue and results of operations. 

The company is coming out with a maiden IPO of 25,44,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 114-120 per equity share. The aggregate size of the offer is around Rs 29.00 crore to Rs 30.53 crore based on lower and upper price band respectively. On performance front, the revenue from operation of the company decreased to Rs 13,271.85 lakh in FY25 as against Rs 14,701.30 lakh in the FY24, representing a decrease of 9.72% which was due decrease in the volume of sale of products and services caused due to the frequent wear and tear of the existing machinery which lead to a decrease in the output of the company. Moreover, the company’s profit after tax for the year increased by 5.37% from net profit of Rs 657.99 lakh in financial year 23-24 to net profit Rs 693.35 lakh in financial year 2024-25.

In a strategic move to expand its presence and increase its manufacturing capacity, it intends to establish new facility in New Survey No. 619 (Old Survey No. 792), Borisana, Kadi, Mehsana - 382728, Gujarat, for increasing its production capacity of aluminium rods and wires with an estimated installed capacity of 25,000 MTPA. While it has been delivering its products domestically, it intends to increase its production capacities and broaden its manufacturing operations. Having both its manufacturing facilities in Gujarat will provide it easier access to cater to the needs of some of the local prominent aluminium product manufacturers. It will increase its sales due to having a unit in the close proximity and also increase its profit margins due to reduction in transportation cost. The company is planning to sell its stake in its subsidiary this will help the company.
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