BMW Ventures IPO: Riding India’s Steel-Infra Push – Should You Subscribe?

At a Glance

Company & its business operations

BMW Ventures Limited, incorporated in 1994, is a Patna-based distributor of long and flat steel products (TMT bars, GC/GP/HR sheets, wire rods), which contributes over 97 per cent of revenue. It also distributes tractor engines/spares and has small operations in PVC pipes, pre-engineered buildings (PEB) fabrication, and RDSO-approved steel girders for Indian Railways. Business is predominantly in Bihar with arrangements with leading steel manufacturers and renewals on a regular basis. The group underwent capital changes including a large bonus issue in March 2024. Promoters are the Kishorepuria family along with two promoter entities

Industry outlook

India’s finished steel demand rose from 90.70 MT in FY2018 to 119.90 MT in FY2023, with demand projected to grow at 6.50–7.50 per cent CAGR till FY2028, driven by infrastructure, housing and autos. Bihar specifically clocked ~8.30 per cent CAGR in FY2018–FY2023 and is forecast at 6.30–7.30 per cent CAGR through FY2028, supported by PM Gati Shakti and housing programmes. Global steel trends remain cyclical but India’s policy-led capex should sustain volumes. This points to a large, expanding domestic TAM in both long and flat products over the medium term.

Objects of the Issue

Funding working capital requirements: Rs 173.75 crore

General corporate purposes: Rs 57.91 crore

Financial Performance

Profit & Loss (Rs crore)

Balance Sheet (Rs crore)

Working Capital & Cash Flow

Peer Comparison (Indian Listed Peers)

The company is primarily a steel distributor; listed peers used in valuation discussions typically include downstream steel/pipes players (e.g., APL Apollo Tubes, Hi-Tech Pipes).

Source – Screener.in as on September 23, 2025, Note - Based on FY25 Earnings on expanded capital of BMW Ventures

SWOT for investors

Strengths: Leading distributor in Bihar with deep relationships; diversified steel product mix; improving FY2025 scale and margins; pan-industry end-use (infra, housing, agri).
Weaknesses: Highly regional revenue concentration (Bihar ~98 per cent); working-capital intensive model; high borrowings; negative CFO in FY2023–FY2024.
Opportunities: State and central capex (roads, rail, housing) sustaining long-product demand; scope to expand adjacencies (PEB, PVC pipes) and geography; formalisation benefits in distribution.
Threats: Steel price volatility impacting spreads; intense competition from other channel partners; interest-rate sensitivity due to leverage; monsoon/political risk to regional demand; supplier concentration risk.

Outlook and Relative Valuation

BMW Ventures rides a favourable medium-term cycle in India’s steel consumption (6.50–7.50 per cent CAGR to FY2028), with Bihar demand also compounding 6.30–7.30 per cent on capex/housing tailwinds. Its FY2025 rebound (revenue 2,062.04 crore; EBITDA 87.39 crore; margin 4.24 per cent) and diversified SKUs support operating visibility, though the model is working-capital heavy and regionally concentrated. On post-issue, fully diluted basis at the upper band (Rs 99), we estimate P/E ~26.16x and EV/EBITDA ~14x (EV adjusts for fresh proceeds). That screens reasonable versus branded pipe/processed-steel names trading in mid-teens to mid-30s EV/EBITDA, albeit those often carry superior moats. Near-term, spreads and inventory gains/losses can swing earnings; leverage (Debt/Equity ~0.97x) also caps valuation re-rating until CFO normalises. Long-term, widening geography and tighter working-capital discipline are key catalysts for sustained ROE improvement.

Recommendation

Avoid. Growth tailwinds, scale and improving FY2025 margins are positives, and valuations are not stretched on EV/EBITDA. But leverage, negative CFO history and Bihar concentration temper enthusiasm. Prefer monitoring execution (geographic expansion, WC turn) before a decisive view.