IPO Reviews / Gallard Steel

Gallard Steel Limited Prepared by Mansukhbhai

Gallard Steel: separating other income, acquired revenue and debt from the growth figures.

Separate other income, acquired revenue and debt from operating growth in your books now; investors will do it from your offer document.

Platform
BSE SME
Status
Listed 26 November 2025
fresh issue, no offer for sale
Rs 37.50 crore

The business in brief

Gallard Steel is an engineering company based in Indore, Madhya Pradesh, incorporated on 9 April 2015. It makes ready-to-use steel components, assemblies and sub-assemblies, mainly unmachined and machined castings (metal parts made by pouring molten metal into moulds, then finished on machines). Its main products go into traction motors and bogies (the wheel frames under a rail coach) for railways, with smaller sales to power generation, defence and industrial machinery. It works from a leased plant of about 12,195 square metres at Pithampur, Dhar district. On 16 February 2024 it acquired 100% of Sleeploop India Private Limited, which makes rebonded foam (recycled foam pressed with adhesive, used in furniture and mattresses).

In FY25 it reported revenue from operations of Rs 53.32 crore and profit after tax of Rs 6.07 crore, on a consolidated basis (company and subsidiary together). The five promoters, Zakiuddin Sujauddin, Hakimuddin Ghantawala, Kaid Johar Kalabhai, Zahabiya Kalabhai and Mariya Zakiuddin Sujauddin, held 91.14% before the issue and 67.16% after it.

The IPO was a fresh issue of Rs 37.50 crore, with no offer for sale (no existing shareholder sold shares). The objects of the issue (the stated uses of the money) were Rs 20.73 crore for expanding the Pithampur facility and building an office, Rs 7.20 crore to repay certain borrowings, and Rs 4.66 crore for general corporate purposes (money not tied to a named use). The issue was open from 19 to 21 November 2025 on the BSE SME platform, and the shares listed on 26 November 2025.

Three years and a stub period, read for quality of profit and funding

Rs crore unless statedFY23FY24FY25H1 FY26 (Apr to Sep 2025)
Revenue from operations (Rs crore)20.5926.8253.3231.56
EBITDA margin (operating profit as a share of revenue)9.21%18.88%23.39%23.53%
Profit after tax (Rs crore)1.133.206.074.29
Other income (Rs crore, total income less revenue from operations)1.061.040.210.57
Other income as a share of profit before tax69.3%28.2%2.4%10.3%
Total borrowings at period end (Rs crore)9.4117.5920.3819.13
Borrowings to net worth (times)1.551.601.190.90
Top 10 customers' share of revenue86.33%92.20%87.48%84.74%

Figures as stated in the prospectus dated 24 November 2025 (summary of restated financial information and risk factors) and the abridged prospectus. Other income, its share of profit before tax, and borrowings to net worth are our arithmetic on those figures. FY23 is standalone; FY24 onwards is consolidated (company and subsidiary). H1 FY26 is a six-month stub period and is not annualised. Rupee figures converted from Rs lakh.

The deeper read

What most readers miss.

  1. 01

    Other income shrank as a share of profit

    Total income minus revenue from operations gives other income (income from outside the main business). On our arithmetic from the prospectus, it was Rs 1.06 crore in FY23 against profit before tax of Rs 1.53 crore, which is 69%. In FY24 it was Rs 1.04 crore of Rs 3.67 crore (28%), and in FY25 Rs 0.21 crore of Rs 8.42 crore (2%).

    How an investor reads it. An investor takes other income out before comparing profit growth, because a base year with a large non-operating part changes the growth rate the investor works out.

    In your company: book interest, rent, scrap sales and one-off gains under separate other income heads every month, and keep a one-line note on what each one was, so the split is ready for the restated accounts.

  2. 02

    An acquisition explains over a third of growth

    Revenue from operations rose by Rs 26.50 crore from FY24 to FY25 (Rs 26.82 crore to Rs 53.32 crore). The rebonded foam line of the subsidiary acquired in February 2024 went from Rs 0.73 crore to Rs 10.49 crore, so it accounts for Rs 9.76 crore, about 37% of the increase, on our arithmetic from the product-wise revenue table; the other product lines added Rs 16.74 crore.

    How an investor reads it. An investor separates growth that came with an acquisition from growth in the existing business, because the two are tested differently.

    In your company: if you acquire a business inside the three years your offer document will cover, report its revenue as a separate line from the date of acquisition, so organic growth (growth from the existing business) can be read on its own.

  3. 03

    Same concentration, very different customer map

    The top 10 customers' share stayed between 84.74% and 92.20% in every period, and the top 5 (our sum of the listed customers) were 68.9% in FY25 and 64.9% in H1 FY26. Underneath, Madhya Pradesh fell from 67.93% of revenue in FY23 to 41.96% in H1 FY26, while Punjab rose from 0.05% to 19.59% and Haryana from nil to 10.84%.

    How an investor reads it. A steady concentration figure can hide a large change in who the customers are; an investor reads the state table and the customer table together to see how much of the base is new.

    In your company: keep a customer-by-year revenue sheet with the year each customer was first billed, so you can show how much revenue comes from customers added in the last two years.

  4. 04

    Borrowings doubled; repayment object covers 38%

    Total borrowings rose from Rs 9.41 crore (FY23) to Rs 20.38 crore (FY25), 2.2 times, while borrowings to net worth moved from 1.55 to 1.60, 1.19 and 0.90 at 30 September 2025. On our arithmetic, the repayment object of Rs 7.20 crore equals about 38% of the Rs 19.13 crore borrowed at that date (7.20 divided by 19.13); capital expenditure took Rs 20.73 crore (55% of the Rs 37.50 crore fresh issue) and general corporate purposes Rs 4.66 crore (12%).

    How an investor reads it. An investor works out how much debt remains after the repayment and how the new capital expenditure will be funded beyond the issue money.

    In your company: before filing, pick the specific loans the issue will repay, get each lender's current balance and prepayment terms in writing, and show the debt position before and after in one table.

Use it in your company

Three things to do before your own filing.

  1. Back each capex line with a documentThe document tied the Rs 20.73 crore capital expenditure object to a named expansion of the existing Pithampur facility and a new office building. In your company: before fixing a capex object, collect dated quotations, a site plan and a civil cost estimate for each item, so every line in the objects table points to a supporting paper.
  2. Keep a live guarantee and claims registerContingent liabilities (possible obligations not on the balance sheet) were Rs 1.04 crore at 30 September 2025, mostly a bank guarantee, about 4.9% of net worth on our arithmetic. In your company: keep a register of every bank guarantee, tax demand and claim, with amount and date, and review it each quarter so the figure is ready at any period end.
  3. Document dealings with your own subsidiaryThe company bought services worth Rs 5.96 crore from its wholly owned subsidiary in FY25 (Rs 2.80 crore in FY24, Rs 3.84 crore in H1 FY26); these appear among related party transactions and drop out of the consolidated accounts. In your company: put intra-group work on a written agreement with a stated pricing basis, so both entities' standalone accounts can be explained.

How the document presented it

  • Revenue split by product lineThe document broke revenue into railway, power, defence, industrial and rebonded foam lines for every period, with amounts and percentages.
  • Change of basis statedIt marked FY23 as standalone and later years as consolidated, and explained that this followed the February 2024 acquisition of the subsidiary.
  • Concentration stated in numbersIt gave the share of revenue from railway components and from the top 10 customers for each period, inside the risk factors.

The offer document put railway components at the centre of the story, at between 76% and 84% of revenue in each period, with the rebonded foam subsidiary shown as a separate line (Rs 0.73 crore in FY24 and Rs 10.49 crore in FY25). It tied more than half of the fresh issue to a named expansion of the existing Pithampur facility and a new office building.

Sources: Prospectus dated 24 November 2025 (summary of prospectus, summary of restated financial information, related party summary, contingent liabilities, litigation summary and risk factors) and draft red herring prospectus dated 25 March 2025, both on the company's website (gallardsteel.com); the red herring prospectus dated 12 November 2025 is also hosted there and on the lead manager's site (serencapital.in). Abridged prospectus from gallardsteel.com, used as a cross-check. Chittorgarh.com and Business Standard (26 November 2025) were used only to locate the documents and the listing date; Screener.in was used only to cross-check the derived other income.

Disclosure: Mansukhbhai Management Services worked on this company's IPO preparation. This review is general commentary for promoters on how a company's offer document presented its business. It is not a research report, not investment advice and not a recommendation to buy, sell or hold any security. Mansukhbhai (Manshukhbhai Management Services Pvt. Ltd.) is not registered with SEBI as a research analyst or investment adviser. Company names are used only to identify the issuer; no connection with, or endorsement by, the company is implied.

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