B.S. Sponge IPO: ₹1,000 Crore DRHP Filed with SEBI — Key Details
Raigarh-based integrated steel manufacturer B.S. Sponge Ltd has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise ₹1,000 crore through an initial public offering. The filing was made on Wednesday, 1 October 2026, adding another steelmaker to an already crowded 2026–27 IPO pipeline — nearly 50 companies filed draft papers with SEBI during September alone. Here is a deep-dive into the B.S. Sponge IPO: the issue structure, what the company does, how the money will be used, its financials, and what happens next.
B.S. Sponge IPO — Key Details at a Glance
| Detail | Status |
|---|---|
| Total issue size | Up to ₹1,000 crore |
| Fresh issue | Up to ₹800 crore |
| Offer for sale (OFS) | Up to ₹200 crore, by promoters |
| DRHP filed with SEBI | 1 October 2026 |
| Price band | Not announced yet |
| Lot size | Not announced yet |
| IPO open / close dates | Not announced yet |
| Proposed listing | BSE and NSE |
| Book running lead managers | ICICI Securities, Motilal Oswal Investment Advisors |
Note: the price band, lot size, and dates are fixed only when the company files its red herring prospectus (RHP) after SEBI's observations — none of those exist yet for this issue.
What B.S. Sponge Does
B.S. Sponge is an integrated steel manufacturer with operations spanning multiple stages of the steel value chain:
- Sponge iron: the starting point — the company converts iron ore into sponge iron, the key raw material for steelmaking.
- Semi-finished products: billets and slabs.
- Value-added finished products: thermo-mechanically treated (TMT) bars, hot rolled (HR) coils, wire rods, electric resistance welded (ERW) pipes and tubes, and ferro alloys.
The company's journey began in 2005 with a single sponge iron rotary kiln of 30,000 tonnes per annum (TPA). As of 31 March 2026:
- Installed sponge iron capacity: 675,000 TPA
- Aggregate capacity across semi-finished and value-added finished steel products: 1,627,500 TPA (16.28 lakh TPA)
- Supported by a 67 MW captive power plant — significant in a business where electricity is one of the largest running costs
- Products distributed across 20 states and 3 union territories
The company's stated growth plans include a brownfield expansion of sponge iron, ferro alloy, billets and slabs capacities at its existing facility, a greenfield facility at Nawapara in Raigarh, and a sharper focus on value-added finished steel products.
Where the ₹800 Crore Fresh Issue Money Goes
The proposed use of the net proceeds from the fresh issue:
- ₹650 crore: repayment or prepayment (in full or part) of certain outstanding borrowings, including accrued interest
- Balance: general corporate purposes
That means roughly 81% of the fresh issue is earmarked for the lenders. The ₹200 crore offer for sale, meanwhile, goes to the selling shareholders — not to the company. Put together, about ₹850 crore of the ₹1,000 crore headline number flows to lenders and promoters rather than to new capacity or growth projects.
B.S. Sponge Financials (FY26 vs FY25)
| Metric | FY26 | FY25 |
|---|---|---|
| Revenue from operations | ₹2,592.52 crore | ₹2,187.82 crore |
| Operating EBITDA | ₹373.01 crore | ₹336.59 crore |
| Operating EBITDA margin | 14.39% | 15.38% |
| Profit for the year (PAT) | ₹171.11 crore | ₹158.43 crore |
| PAT margin | 6.60% | 7.24% |
Revenue grew a healthy ~18.5% in FY26 and profit rose ~8%, but margins compressed slightly — EBITDA margin fell from 15.38% to 14.39% and PAT margin from 7.24% to 6.60%. That margin trend is worth watching as the RHP approaches.
Selling Shareholders and Merchant Bankers
The ₹200 crore offer for sale comprises shares offered by promoter selling shareholders Parmanand Agarwal and Ashish Agarwal and promoter group selling shareholder Sulochana Agarwal.
The book running lead managers to the issue are ICICI Securities and Motilal Oswal Investment Advisors — the same duo that typically handles mainboard-bound issues of this size.
B.S. Sponge IPO Date, Price Band and GMP
None of these have been announced. A DRHP filing is the first formal step toward an IPO, not a launch date. The price band, lot size, issue dates — and any grey market premium (GMP) — appear only once the company files its RHP. When a GMP does start getting quoted for this issue, treat it as unofficial and subject to change.
What Happens Next
- SEBI review: the regulator examines the draft and typically issues observations within one to three months.
- RHP filing: the company answers SEBI's queries, then files the red herring prospectus with a price band and dates.
- Launch window: once SEBI's observations are received, the approval stays valid for 12 months, so the actual launch depends as much on market conditions as on the regulatory timeline.
B.S. Sponge joins a packed filing queue that includes Anarock Property Consultants' ₹1,000 crore DRHP and Inox Clean Energy's ₹10,000 crore DRHP, both filed this past week (read our deep-dives: Anarock IPO DRHP and Inox Clean Energy IPO DRHP).
Key Points for Investors to Watch
- Debt-first use of proceeds: ~81% of the fresh issue goes toward debt repayment — this is balance-sheet cleanup, not growth capex.
- Margin compression: FY26 revenue and profit grew, but both EBITDA and PAT margins slipped year-on-year.
- Integrated model with captive power: the 67 MW captive plant is a genuine structural advantage in a power-intensive business.
- Value-added push: expansion plans and a growing focus on finished steel products signal a move up the value chain.
- Cyclical sector: steel prices and spreads drive profitability, so timing of the issue relative to the steel cycle matters.
- No valuation yet: with no price band announced, the issue's valuation cannot be judged until the RHP.
FAQs — B.S. Sponge IPO
When did B.S. Sponge file its DRHP?
The company filed its draft red herring prospectus with SEBI on 1 October 2026.
What is the B.S. Sponge IPO size?
Up to ₹1,000 crore, comprising a ₹800 crore fresh issue and a ₹200 crore offer for sale by promoters.
What is the B.S. Sponge IPO price band and date?
Not announced yet. These are set only at the red herring prospectus stage, after SEBI's observations.
Is there a GMP for the B.S. Sponge IPO?
No. No grey market premium exists yet for this issue. Any figure quoted before the price band is announced should be treated as unofficial.
Where will B.S. Sponge shares list?
The shares are proposed to be listed on BSE and NSE.
What does B.S. Sponge manufacture?
An integrated steel product portfolio — sponge iron, billets, slabs, TMT bars, hot rolled coils, wire rods, ERW pipes and tubes, and ferro alloys — from its Raigarh facility.
Conclusion
The B.S. Sponge IPO is a classic deleveraging story: a ₹1,000 crore DRHP where the bulk of the fresh money goes to pay down debt rather than build new capacity. The underlying business looks reasonably scaled — ₹2,593 crore in FY26 revenue, an integrated plant backed by captive power, and expansion plans on the drawing board — but margin compression in FY26 and the steel cycle's ups and downs call for a careful read of the RHP when it arrives.
IPOlist.in will update this coverage as SEBI observations arrive and the price band and dates are announced. In the meantime, explore our recent DRHP deep-dives: Anarock's ₹1,000 crore IPO, Inox Clean Energy's ₹10,000 crore IPO, and EverBrands' ₹600 crore Subway-operator IPO.
Sources: the company's DRHP as reported by The Hindu BusinessLine (1 Oct 2026), Business Today, Free Press Journal, and marksmendaily. Financial figures are from the DRHP disclosures; price band, dates, lot size, and GMP are not announced at the time of writing.