India’s steel sector gears up for primary market boom in coming months

India's steel sector is set to experience a significant surge in initial public offerings (IPOs), with at least ten companies preparing to raise between ₹5,000 and ₹7,000 crore in the coming months. Key players such as Steel Infra Solutions, German Green Steel & Power, and Jindal Supreme are among those that have filed draft red herring prospectuses (DRHPs), while others are in advanced preparation stages. This move is largely driven by an expected increase in demand, fueled by government initiatives like the Production Linked Incentive (PLI) scheme and ongoing infrastructure projects in roads, railways, and ports. Industry experts note that approximately 25-30% of steel demand is tied to government projects, which, coupled with protective duties on certain imports, has empowered domestic producers. Companies are focusing on capacity expansion, particularly in specialty and coated steel segments, to meet domestic demand and reduce import reliance. The proceeds from IPOs are intended for investments in greenfield projects and enhancing financial stability. Despite optimism, risks such as price volatility, global economic fluctuations, and cost uncertainties remain pertinent. Market analysts emphasize the importance of maintaining margins, particularly in the face of rising raw material costs, as the industry navigates this promising yet challenging landscape.