Know Your IPO: Kasturi Metal Composite Eyes Rs 17.6 crore Through BSE SME Listing

Steel fiber manufacturer seeks funds for capacity expansion amid fluctuating profitability and heavy domestic market reliance

Kasturi Metal Composite Ltd. (KMCL), a two-decade-old manufacturer of steel fiber products for industrial applications, is set to make its public market debut with a Rs 17.61 crore initial public offering on BSE’s SME platform. The Amravati, Maharashtra-based company opens its subscription window on January 27, 2026.

The Business Model

KMCL operates in a specialised segment, manufacturing steel fiber products that enhance concrete strength and durability. Its product lineup includes Loose Hook-End Steel Fiber, Glued Hook-End Steel Fiber, and Flat Crimped Steel Fiber—all critical components in modern construction projects. The company also produces Steel Wool Fiber for automotive brake pads and clutches, and trades Macro Synthetic PP Fibers under its “Durocrete” brand.

With three manufacturing facilities in MIDC Amravati and 98 employees as of October 2025, KMCL markets its offerings under the “Duraflex” and “Durabond” brands. Its customer base spans construction, infrastructure, mining, warehousing, and automotive sectors, with applications ranging from tunnel shotcrete to highway construction.

Revenue Mix: Domestic Dominance

The company’s revenue story is predominantly domestic. In the half-year ending September 2025, exports contributed just 1.88% of total revenue, with domestic sales accounting for 98.12%. This represents a shift from FY23, when exports peaked at 11.76% of revenue. The company serves clients across six countries but remains heavily reliant on the Indian market.

As of December 31, 2025, KMCL’s consolidated order book stood at ₹37.53 crore, providing some visibility into near-term revenue.

Financial Trajectory: Growth With Volatility

KMCL’s financial performance over the past three years reveals a company in growth mode, albeit with uneven profitability:

• FY23: Total income of ₹37.37 crore, net profit of ₹1.49 crore (4.02% PAT margin)
• FY24: Total income of ₹50.20 crore, net profit of ₹2.35 crore (4.73% PAT margin)
• FY25: Total income of ₹57.22 crore, net profit of ₹2.07 crore (3.64% PAT margin)
• H1-FY26: Total income of ₹32.29 crore, net profit of ₹2.47 crore (7.71% PAT margin)

The revenue growth trajectory is clear—from ₹37.37 crore to ₹57.22 crore over three fiscals. However, profitability has been inconsistent. While top-line expanded, bottom-line fluctuated, with FY25 seeing a dip in net profit despite higher revenues. The sharp jump in H1-FY26 profitability—nearly matching full-year FY25 earnings in just six months is a notable departure from historical patterns.

Return on Net Worth averaged 15.64% over the three-year period, while Return on Capital Employed ranged from 12.35% to 18.43%.

The Offering Details

The IPO comprises 27.52 lakh equity shares of ₹10 face value each, priced between ₹61-64 per share. At the upper band, this translates to a market capitalization of ₹66.53 crore post-listing. The issue represents 26.47% of post-IPO equity capital.

Proceeds will be deployed toward:

• ₹13.29 crore for capital expenditure on a new facility, including machinery, electrical work, and interiors
• Balance for general corporate purposes

The minimum application size is 4,000 shares (₹2.56 lakh at upper price), with further applications in multiples of 2,000 shares.

Hem Securities Ltd. serves as the sole book-running lead manager, while Bigshare Services Pvt. Ltd. handles registrar duties. Notably, Hem Finlease Pvt. Ltd. will act as both market maker and syndicate member.

Capital Structure Considerations

KMCL’s capital history shows significant activity in recent years. The company issued bonus shares in the ratio of 250:739 in February 2022 and 6:1 in December 2024. Between March 2007 and February 2025, equity shares were issued at prices ranging from ₹20 to ₹133.60 per share (on a ₹10 face value basis).

The average cost of acquisition for promoters stands at ₹1.62 to ₹9.20 per share across different tranches—substantially lower than the IPO price of ₹61-64.

Post-IPO, the paid-up equity capital will expand from ₹7.64 crore to ₹10.40 crore.

Valuation Metrics

Based on the NAV of ₹26.42 as of September 30, 2025, the issue is priced at a price-to-book value of 2.42x. The company has reported an average EPS of ₹2.93 over the past three fiscals.

If H1-FY26 earnings are annualized and applied to the post-IPO equity base, the implied P/E ratio would be approximately 13.47x. However, using FY25’s actual earnings, the P/E multiple rises to 32.16x—a significant variance that highlights the importance of earnings consistency going forward.

The company has not declared dividends during the reported periods and plans to adopt a dividend policy based on future financial performance.

No Listed Peers

According to the offer document, KMCL has no directly comparable listed peers, making relative valuation benchmarking challenging for investors.

IPO at a Glance