Behari Lal Engineering IPO: August 12-14, Fund Expansion

Behari Lal Engineering Limited is set to launch its Initial Public Offering (IPO) from August 12-14, 2026, seeking funds to boost its manufacturing capabilities. The metal rolls producer, which contributes 10.00–11.5% to India’s metal rolls demand in Fiscal 2026, filed its Draft Red Herring Prospectus (DRHP) with SEBI.

IPO Details and Funding Allocation

• The IPO is structured as a Fresh Issue; price band and total issue size are pending.
• Net proceeds are earmarked for capital expenditure: ₹22.99 Crore for Manufacturing Facility 1 and ₹40.05 Crore for Manufacturing Facility 2.
• An additional ₹0.57 Crore will repay borrowings, with other amounts for general corporate purposes, totaling ₹63.61 Crore for specified uses.

Established in 1995, Behari Lal Engineering is an integrated iron and steel manufacturer operating two facilities in Mandi Gobindgarh, Punjab. The company specializes in Metal Rolls, Engineering Castings, Alloy Steel Products, and Forging Ingots and Forged Shafts/Blocks.

Financial Performance Snapshot

• Revenue from Operations grew from ₹446.08 Crore in FY2024 to ₹534.02 Crore in FY2026, a CAGR of 9.41%.
• Total Profit (PAT) surged from ₹35.79 Crore to ₹64.64 Crore over the same period, with a PAT CAGR of 34.38%.
• The PAT margin improved from 8.02% to 12.11% by FY2026.
• Total equity stood at ₹306.10 Crore in FY2026, with a debt-to-equity ratio of 0.20x.

The company’s Mandi Gobindgarh facilities have a combined capacity of 1,19,690 MT, achieving 87.71% utilization in Fiscal 2026. It served 1,825 customers by March 31, 2026, maintaining a retention rate of 62.98%.

Key Risks Identified in DRHP

• Customer concentration is high, with the top 10 customers accounting for 37.81% to 39.91% of revenue from Fiscals 2024–2026.
• The company lacks long-term contracts, relying heavily on repeat customers for 80.04% to 86.10% of revenue.
• Raw material costs, approximately 61% of total expenses in FY2026, introduce price volatility risk.
• Outstanding creditor dues amounted to ₹201.77 million to 42 creditors as of March 31, 2026.

Investors await the price band announcement for valuation and peer comparison data, as the pre-issue book value was ₹306.10 Crore in FY2026. This information will be crucial for evaluating the company against its listed sector peers.