Vibhor Steel Tubes Ltd (VSTL) is setting up a new unit at Sundargarh in Odisha to scale up its total manufacturing capacity to 3.41 lakh tonne, a company official said on Wednesday.

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The Hisar-based steel maker presently has two plants -- one in Mahabubnagar, Telangana and one in Raigad, Maharashtra -- having a total installed capacity of 2.21 lakh tonne.

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

Replying to a question related to the timeline of the project, he said the aim is to make the plant operational by the first quarter of financial year 2024-25.

On the expansion plan, Kaushik said the company has already acquired the land for the project, and orders for plant and machinery have been placed. It will be funded through internal accruals.

He did not disclose the investment details due to regulatory obligations as the company is in the process of listing on BSE and NSE.

The Initial Public Offering (IPO) of Vibhor Steel Tubes will open on February 13 and close on February 15, he said.

The company has set a price range of Rs 141-151 per share for its proposed IPO. The company's offering comprises a fresh issue of equity shares (having a face value of Rs 10 each), aggregating to an issue size of up to Rs 72.17 crore, through book-building route.

Khambatta Securities is the sole book-running lead manager to the offer and KFIN Technologies is the registrar.

The proceeds from the issue will be utilised for working capital requirements.

VSTL manufactures steel products such as electric resistance welded pipes, hot-dipped galvanized pipes and hollow section pipes.

The new plant will manufacture value-added products such as crash barriers and monopoles which will improve margins.

"Moreover, we are also exploring tapping the export markets once the new production facility goes on stream. Proximity to raw material supply will be an added advantage for the company to cut its freight cost once the current expansion plan is completed," Kaushik said.

The company has renewed its agreement with Jindal Pipes, with effect from April 1, 2023, to manufacture and supply the finished goods under the brand name Jindal Star to Jindal Pipes. The tenure of this agreement is for six years and can be further renewed if required by both parties, the company official said.

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