Monolithisch India Ltd. IPO: Key Details

Monolithisch India

• Monolithisch India is coming out with an initial public offering (IPO) of 57,36,000 equity shares in a price band Rs 135-143 per equity share.
• The issue will open on June 12, 2025 and will close on June 16, 2025.
• The shares will be listed on SME Platform of NSE.
• The face value of the share is Rs 10 and is priced 13.50 times of its face value on the lower side and 14.30 times on the higher side.
• Book running lead manager to the issue is HEM Securities.
• Compliance Officer for the issue is Deepa Vijay Agrawal.

Profile of the company

Monolithisch India is an ISO 9001:2015, ISO 14001:2015, ISO 22301:2019, ISO 37301:2021, ISO 45001:2018 and ISO/IEC 27701:2022 certified company engaged in the business of manufacturing and supply of specialized ramming mass used as a heat insulation/ lining material, by its customers as a refractory consumable for Induction furnaces installed in iron/steel and foundry plants. It is also engaged in the trading of its products on occasional basis to meet the excess and urgent requirement by its customers. Most of its customers and raw material suppliers are located in nearby states with the manufacturing facility of the company. The major customers of the company are iron and steel producers located in Eastern parts of India, majorly in the states of West Bengal, Jharkhand & Odisha.

The company’s product i.e. specialized ramming mass is used in the induction furnace to create thermal insulation between the coil of the induction furnace and the molten steel. The melting point of the ramming mass act as an insulation barrier material between the induction furnace crucible and the molten steel. It has over the years, based on the requirements of its customers, developed different grades of ramming mass with different specifications and additives to serve furnace of different sizes and make. Its products are made of alpha-quartzite and stone boulder which is available in the Bihar, Jharkhand and Madhya Pradesh region, as most of its suppliers are located in these areas. 

The company strives to develop a long-term business relationship with its customer by maintaining the industry standards and meet customer's business requirements through its products and services. In order to achieve the same, the company aims to provide its customers quality product at reasonable prices. Its operational team also keeps close track of production schedules, which ensures on time delivery of its products to the customers, which results in enhanced service quality and cost savings.

Proceed is being used for:

• Funding capital expenditure towards setting up of a manufacturing facility of the Company by purchase of land, building of factory shed, civil work and installation of additional plant and machinery therein
• Investment in its Subsidiary, Metalurgica India Private Limited for financing its capital expenditure towards purchase of land, building of factory shed, civil work and installation of additional plant and machinery therein
• Meeting working capital requirements
• General corporate purpose

Industry Overview

India is the second-largest producer of crude steel as well as the second-largest consumer of finished steel in the world. The sector contributes to about 2% of the total GDP of the country and employs 2.6 million people directly and indirectly through allied sectors. The Indian steel sector is further bifurcated into the primary and secondary steel sector based on their production pathways. The secondary steel sector largely utilizes the Direct Reduction-Electric Arc Furnace (DRI-EAF) route or the DRI-Induction Furnace (DRI/IF) route for crude steel production and is also involved in the production of finished steel through re-rolling mills. Overall, the secondary sector accounts for about 40% of steel production in India. The secondary steel sector also remains highly emission-intensive, being responsible for around 50 million tonnes (MT) of GHG emissions, annually. Excessive reliance on low-quality coal, iron ore, and low shares of scrap input coupled with heterogenous scattered units of operations add to the deep decarbonization challenge for the secondary steel sector in India.

To align India’s ambitious growth visions with its commitment to reach net-zero emissions by 2070, it is vital to enable the low-carbon transition (LCT) of the secondary steel sector, particularly through the development of a suitable enabling environment to scale-up the flow of finance for the adoption of low-carbon technologies by the sector. The value chain of the secondary steel sector involves the production of sponge iron through the direct reduction route (DRI plants), which is followed by the production of crude steel (semi-finished steel) through Electric Arc Furnaces (EAF) or Induction Furnaces (IF). Lastly, finished steel products are produced through steel re-rolling mills which involve hot and cold rolling units, as well as galvanizing units. There are approximately 333 DRI plants, 55 EAFs, 1103 IFs, and 1313 Steel-rerolling mills scattered across the country contributing to the value chain of the secondary steel sector.

India is a global force in steel production and the second-largest crude steel producer in the world. In FY23, the cumulative production of crude steel stood at 126.26 MT, finished steel stood at 122.28 MT, and consumption of finished steel stood at 119.86 MT. During April 2024, crude steel stood at 11.919 MT, finished steel stood production at 11.215 MT and consumption at 11.076 MT. Production of steel in India could go up to 500 million tonnes by 2050, nearly four times the current output, as New Delhi seeks to undergird its evident growth ambitions with rapid capacity expansion for the primary infrastructure alloy. Demand for steel is expected to grow by around 10% through 2022 amid the government's continued focus on the construction of roads, railways, ports and airports. 

Pros and strengths

Established manufacturing facility with easy access to raw material sources: The manufacturing facility of the company is located in the Purulia, West Bengal which is equipped with the requisite plant and machineries including crushing, mixing and packing machines which are capable of producing ramming mass of different grades as per the Industry standards and the requirements of its customers, along with the equipments and utilities for smooth manufacturing activities. The manufacturing facility of the company is equipped with machineries like jaw crusher, roll crusher, low frequency vibrator, secondary crusher and utility equipment’s like conveyer belt, forklift, crane, transformer and panels having an existing installed manufacturing capacity of 132000 MTPA, capable of undertaking the manufacturing activities.

Long-standing customer relationships with customers along with location advantage: The quality of goods and services provided by the company has helped it to achieve customer satisfaction and developing long-standing relationships with its customers which majorly includes companies involved in iron and steel production. Maintaining strong relationships with its key customers is essential to its business strategy, towards the growth of its business, as a result it has been able to retain a number of its customers for a long period. Due to its quality products and services, its customer base has gradually grown from 41 customers in Fiscal year 2023 to 63 customers in Fiscal year 2025 along with a CAGR 52.46% growth in revenue from operation and approx. 61.44% business from repeated customers.

Track record of healthy financial performance: The company has established a track of consistent revenue growth and profitability. The company’s revenue from operations increased from Rs 4187.79 lakh in Fiscal 2023 to Rs 9734.43 lakh in Fiscal 2025 at a CAGR of 52.46% while its restated profit for the year increased from Rs 454.29 lakh in Fiscal 2023 to Rs 1448.80 lakh in Fiscal 2025 at a CAGR of 59.46%. Its continued focus on efficiency, productivity improvements and cost rationalization have enabled it to keep its operating costs under control and improve its margins. The company’s EBITDA has increased from Rs 671.69 lakh in Fiscal 2023 to Rs 2106.24 lakh in Fiscal 2025 while its EBITDA Margin increased from 16.04% in Fiscal 2023 to 21.64% in Fiscal 2025. In Fiscal 2025, 2024 and 2023, its Return on Capital Employed was 46.22%, 57.86%, and 46.80% respectively and as of March 31, 2025, 2024 and 2023, its Return on Equity was 53.94% 59.69% and 58.74% respectively.

Risks and concerns

Maximum revenue comes from limited customers: The company derives a significant portion of its revenue from its major customers. As of March 31, 2025, its top 3 customers contribute 25.56% of revenue from operations. Further, the share of its top 3 customers for the Fiscal year 2024 and 2023 was approximately 29.58% and 26.00% respectively. Further, it derives a significant portion of its revenue from its top 10 customers. As of March 31, 2025, its top 10 customers contribute 59.43% of revenue from operations. The loss of any of these customers individually or severally could have a material adverse effect on its business, operations and could have impacted its financial strength.

Geographical constrain: The company manufactures ramming mass from its single manufacturing facility located at Purulia, West Bengal. Also, majority of its customer base is concentrated in the states of West Bengal, Odisha and Jharkhand which account for more than 90% of its revenue from operations. Due to the geographic concentration of its manufacturing operations and the operations of certain of its customers, its operations are prone to various hazards both natural and manmade. Such disruptions could result in the damage or destruction of a significant portion of its manufacturing abilities, significant delays in shipments of its products and/or otherwise materially adversely affect its business, financial condition and results of operations.

Depend on certain key suppliers to procure a significant portion of raw materials: The company is dependent on certain key suppliers for purchasing its raw materials. Its customer satisfactions and growth of its business directly depends on the timely and quality product delivery which ultimately depends on the availability of the timely and good quality raw materials. The company’s top 10 suppliers are contributing 63.83%, 73.94% and 77.04%respectively in the year ended March 31, 2025, March 31, 2024 and March 31, 2023. It depends on these suppliers for procuring major portion of its raw material requirements, in case it is unable to procure raw materials from these suppliers due to any reason beyond its control, it may be required to search for alternate which may not be available or if available may not be willing to supply their products to it or at feasible prices, which may affect its business and profitability.

Outlook

Monolithisch India Limited manufactures and supplies specialized “ramming mass,” a heat insulation refractory used in the iron and steel industry induction furnaces. The company is ISO certified and specializes in manufacturing specialized ramming mass for heat insulation, used by customers as a refractory consumable in induction furnaces for iron, steel, and foundry plants. It has long-standing customer relationships with customers along with location advantage. It also has a track record of healthy financial performance. On the concern side, the company is dependent on a limited number of customers for its revenue from operations, the loss of any of these customers individually or severally could have a material adverse effect on its business, operations and could have impacted its financial strength. Moreover, the company is currently a regional player and derives substantial revenue from West Bengal, Odisha and Jharkhand and hence faces geographical concentration related risks.

The company is coming out with a maiden IPO of 57,36,000 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 135-143 per equity share. The aggregate size of the offer is around Rs 77.44 crore to Rs 82.02 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operations has increased significantly by 41.31% to Rs 9734.43 lakh in Fiscal 2025 from Rs 6888.71 lakh in Fiscal 2024. The profit after tax of the company increased from Rs 851.18 lakh in the Fiscal 2024 to Rs 1448.80 lakh in the Fiscal 2025 representing an increase of 70.47%.

The manufacturing facility of the company is located in Purulia, West Bengal and most of its customers are located in the states of West Bengal, Jharkhand and Odisha. Its customers located in these regions account for more than 90% of its revenue from operations. It plans to continue to invest in enhancing its presence into different geographies and to enable it to respond quickly to its customers’ changing requirements, thereby continually improving the competitiveness of its services. It is further planning to expand its presence by establishing its new manufacturing unit which will help it to expand its presence and network. This will help it to take the advantage of adding new customer base and fulfilling additional demand from existing customers. Accordingly, it intends to further consolidate its position in the geographic markets where it sells its products as well as expand into additional geographic markets.