Steamhouse India (SIL) specializes in the generation and centralized pipeline distribution of industrial gases, primarily steam and nitrogen, for industrial customers. It is a pioneer of the community boiler system in India, offering a shared pipeline-based alternative that eliminates the need for individual customers to maintain their own steam infrastructure.

Steam generation and distribution remains the company‘s core business, complemented by the purchase and redistribution of steam through its pipeline network. In 2025, it expanded into nitrogen production, becoming the only company in India to supply nitrogen through a distributed pipeline network instead of conventional cryogenic tanks or onsite generation.

SIL industrial gas business consists of generation and distribution of steam through its community boiler system and pipelines; purchase of steam produced by other steam generating entities and distribute it to its customers through its pipeline and extract nitrogen from atmospheric air by separating it from other atmospheric gases, compressing it and supplying purified nitrogen through its pipeline network.

SILundertakes coal trading on an invoice only basis. During FY2026 and FY2025, the company supplied coal to its group company, Sanjoo Dyeing & Printing Mills Private Limited and Sanjoo Prints Private Limited, which were related party transactions. In FY2025 and FY2026, coal trading constituted 19.3% and 26.9% of the total revenues respectively.

SILcurrently operates seven community steam boilers (six owned and one leased) in Gujarat with a combined installed plant capacity for steam aggregating 345 tonnes per hour, which translates to an annual installed capacity of 21,85,920 tonnes per annum. These plants are in Ankleshwar, Vapi, Sachin GIDC, Sarigam, Dahej, Nandesari and Panoli.

As of July 31, 2026, the company owned, operated and maintained a 60,151 meters operational pipeline system connecting its facilities to the company’s customers’ premises. The company has established pipeline rights-of-ways, which are easements granting it the legal right to use land for pipelines, with its pipelines typically connecting to customer-owned pipes on their premises.

The company’s steam plants serve various industries, including chemical, pharmaceutical, agro-chemical, textile, tyres, dyes and pigments, polymers, paints and other sectors. Some of the customers include Aether Industries, Anupam Rasayan India, Globe Enviro Care, Gujarat Polysol Chemicals, Devanshi Dyestuff, K. Patel Chemo Pharma Private Limited, K. Patel Dye Chem Industries Private Limited, Mahavir Synthesis Private Limited, Mangalam Intermediaries, Orgo Chem Gujarat Private Limited and Subhasri Pigments.

Object of the offer

The offer consists of both a fresh issue and an offer for sale component (OFS). The fresh issue will include 8,39,50,617 shares aggregating up to Rs 353 crore at the upper price band of Rs 81. The OFS includes 75,30,864 shares of Rs 2 aggregating up to Rs 61.0 crore at the upper price band of Rs 81. The total number of shares are 9,14,81,481 shares, aggregating up to Rs 414 crore at upper price band of Rs 81.

The funds raised to the tune of Rs 180 crore will be used towards repayment or prepayment of all or a portion of certain outstanding borrowings availed by the company, Rs 75.95crore will be utilised towards capacity expansion of Ankaleshwar and Ponali facilities, Rs 38.17 crore towards funding capital expenditure in relation to the setting up of a manufacturing facility for generation of steam at Dahej GIDC (Phase II),and the balance for general corporate purposes.

Strengths

Leading market position offering customers an energy efficient solution across industries.

The community boiler business is a novel concept in India and the company has the first-mover advantage over other players. By leveraging the latest technologies, the company has optimised the supply of steam to industries at the required quality. The in-house development of technology and expertise in steam distribution has helped the company scale up the operations over the years. Being the first mover in this market, the company has a competitive advantage.

High barriers for entry. SIL has established its geographic presence within industrial clusters through the creation of an exclusive pipeline network. The limited space available prevents the setup of additional distribution networks by other companies. New market entrants may need to overcome several entry barriers.

Strategically located facilities to enable community steam distribution.

Marquee customer base with long-term relationships.

Weaknesses

Proximity to customers is a key constraint to expansion of business.

Faces customer concentration risk as around 48% of the total revenues in FY2026 were contributed by top 10 customers. Also, faces supplier concentration risk as more than 75% of the total purchases are from top 10 suppliers.

The cash flows are susceptible to contract termination by the existing clients, given the weak exit clause of the agreements.

The company relies on coal as its raw material to generate steam and, hence, the timely availability of the raw material is critical to ensure that the operations are sustained. Purchases of coal contributed 77.29% of the company’s total purchases in FY 2026, 76.19% in FY 2025 and 92.01% in FY 2024.

The operation of boilers is governed by The Boiler Act, 1923, and the company operates in compliance with the guidelines established by the relevant authorities. However, any adverse change in the regulations could potentially have an impact on the company’s operations and earnings.

Related party transactions remain a risk to the company in future. Related party transactions with group companies as a percentage of revenue from operations stood at 73.7%, 70.4% and 35.5% respectively in FY2026, FY2025 and FY2024.

SIL relies on securing rights of usage to lay and maintain the pipeline that connects its facilities to its customers. If the rights of usage expire and are not renewed than the operations might be impacted.

Total contingent liabilities and capital commitments as on March 31,2026 stood at Rs 82.17 crore.

Valuation

Consolidated sales were up by 24.4% to Rs 491.51crore in FY2026. Increase in revenue was primarily due to increase in contribution from coal trading which was 26.9%(Rs 132.3 crore) in FY2026 as against 19.3% (Rs 76.25 crore)in FY2025. Operating profit margin (OPM) contracted from 17.54% to 16.99%, leading to a 20.4% increase in operating profit to Rs 83.49crore. Other income inclined 1.2% to Rs 3.46 crore. Interest cost declined 2.0% to Rs 21.73 crore and depreciationcost inclined by20.6% to Rs 13.99crore. PBT was higher by 31.5% to Rs 51.24 crore as against Rs 38.97 crore.PAT was higher by 24% to Rs 38.64 crore as against Rs 31.16 crore in FY2025.

At the higher price band of Rs 81, the offer is made at a P/E of 66.40 times FY2026 EPS (of Rs 1.2).

Close listed peers are Linde India, Ellenbarrie Industrial Gases and Stallion India Fluorochemicals. Linde India manufactures industrial and medical gases and construction of cryogenic and non cryogenic air separation plant and trades at 98.5 times TTM P/E, Ellenbarrie Industrial Gases is a manufacturer and supplier of industrial gases in the eastern and southern India, both in bulk and packaged form and trades at 37.6 times TTM P/E and Stallion India Fluorochemicals is engaged in selling Refrigerant and Industrial Gases and related products and trades at 45.5 times TTM P/E. The OPM and ROE stood at 16.99% and 22.36%, respectively, in FY26. These were 36% and 13.7% for Linde India, 34% and 14.2% for Ellenbarrie Industrial Gases and 15% and 8.9% for Stallion India Fluorochemicals, respectively.