Vardhman’s Growth Engine: Will New Shares Power a Steel Sector Shake-Up?

Updated: May 26, 2025 10:41

Image Source: Equity Bulls

Vardhman Special Steels Ltd (VSSL), one of India’s leading producers of special and alloy steels, is set to consider a major fundraising initiative through the issuance of equity shares. The move comes as the company embarks on an ambitious expansion plan, including a new greenfield steel plant in Punjab, and aims to strengthen its balance sheet to support future growth.

Key Highlights:

Board to Weigh Equity Fundraising: VSSL’s Board of Directors is scheduled to meet to evaluate proposals for raising funds via equity shares. This could involve a Qualified Institutional Placement (QIP) or other equity instruments, with proceeds earmarked for capex, working capital, and strategic initiatives.
Greenfield Plant Announcement: The company recently unveiled plans for a ₹2,000 crore greenfield steel plant in Punjab, targeting a 500,000 MT annual capacity. The project is expected to be operational by FY 2029-30 and will be funded through a mix of internal accruals, debt, and fresh equity. The plant aligns with industry trends toward green steel and the circular economy, aiming to meet rising demand and higher quality standards from OEMs.
Financial Performance: Despite a muted Q4 FY25—revenue dipped 3% and net profit fell 40% year-on-year—VSSL remains optimistic about long-term prospects. FY25 revenue grew 6.2% to ₹1,764 crore, with EBITDA at ₹177 crore. The company also announced a ₹3 per share dividend and has reduced long-term borrowings to ₹3.29 crore.
Market Response: Investors cheered the expansion news, with VSSL shares hitting the 20% upper circuit post-announcement, signaling strong market confidence in the company’s growth trajectory.
Strategic Outlook: The new fundraising will provide the financial muscle to execute the greenfield project, diversify into new product segments, and enhance operational efficiency. Management remains focused on sustainable growth, improved margins, and maintaining a robust balance sheet.

With the fundraising initiative and greenfield expansion, Vardhman Special Steels is positioning itself as a future-ready player in India’s evolving steel sector.

Sources: ICICI Direct, Moneycontrol, Company Media Release, ScanX Trade

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