BMWIL is on a transition path, but will it effectively navigate challenges?
BMW Industries Ltd (BMWIL), one of the largest steel processing companies in the country, is undergoing a major transition. The Kolkata-headquartered company, originally incorporated in 1981 as Bansal Mechanical Works Private Ltd, is geared up to commence its transformation journey. The BSE-listed company, operating one of the largest merchant cold rolling and galvanising facilities, has been processing both long and flat products (including TMT bars, steel pipes and galvanised plain/corrugated sheets) for leading steel manufacturers, including Tata Steel, for over three decades. It is now setting up a Rs800-crore mega greenfield project in Bokaro, Jharkhand.
With this downstream processing and manufacturing facility for value-added, coated and plated steel products, BMWIL, which started as a small family business manufacturing steel pipes and tubes in Kolkata, is now in the process of creating its own portfolio of value-added steel products and selling them directly into the market.
In other words, the Rs630-crore company, which all these years has been carrying out steel processing job work as a contract manufacturer for other steel makers, will now manufacture value-added products such as cold rolled coils/sheets, galvanised, galvalume, zinc-aluminium-magnesium (ZAM) coils/sheets, as well as colour-coated coils/sheets, as part of its own portfolio. Qualified under the Union government’s PLI 1.1 Scheme for the ‘Coated/Plated Steel’ category, the downstream steel complex in Bokaro is being implemented in a phased manner. The Bokaro project will be funded through a mix of internal accruals (30 per cent) and debt (70 per cent).
The Production-Linked Incentive Scheme for speciality steel was launched in July 2021, covering five categories and 19 sub-categories. The PLI scheme has a tenure of 5 years, running from FY2026-FY2030, with disbursements to be received between FY2027-FY2031. The government offers incentives based on investment and production targets to boost domestic manufacturing and import substitution. The second round (PLI 1.1) has seen Rs17,000 crore in committed investments, with 42 MoUs signed with 25 signatories, BMWIL being one of them.
“We have taken a conscious decision to transform ourselves. From being a sheer contract manufacturer (steel service centre) for others, we now want to build our own portfolio of value-added steel products and explore the emerging opportunities that the market is offering. While doing so, we will continue to serve our existing clients, offering conversion services. The upcoming Bokaro facility will help scale up our business in a big way and will position us strongly in a market where demand for value-added products is growing,” says Harsh Bansal, 47, managing director, BMWIL.
A strategic move
Phase I of the project is expected to be operational in Q4 FY2026, while the entire project will be fully commissioned by the end of FY2027. Backed by this strategic initiative, the company is likely to grow at a CAGR of 75 per cent over the next three fiscals, including the current financial year. The company is looking to clock revenue of Rs3,500-Rs4,000 crore in FY2028, when its Bokaro facility witnesses its first full year of operation. The company recorded revenue of Rs629 crore in FY2025, up from Rs598 crore in FY2024 and Rs562 crore in FY2023. “With this new project, the PAT is expected to grow at a robust 40 per cent CAGR over a period of 3 years, with the PAT margin expected to stabilise at around five per cent by FY2028, resulting in a ROCE of over 18 per cent,” avers a company spokesperson.
Importantly, the company will then generate 80 per cent of its revenue from its own portfolio (pure-play manufacturing), while the share of contract manufacturing (conversion) in the total basket will be around 20 per cent, down from the present 85 per cent. Currently, Tata Steel is the company’s major client, accounting for more than 95 per cent of its contract manufacturing portfolio, where it manufactures and processes HRPO coils, CR coils, GP coils, GC sheets, MS and GI pipes, TMT bars, and other steel products. In 2018, the company installed its second TMT mill and also entered the B2C space with its own brand, Bansal Super TMT.
Moreover, the company also has a 60:40 JV with Steel Authority of India Ltd (SAIL). The JV, called SAIL Bansal Service Centre Ltd, has operated since 2000 as a steel service centre in Bokaro, Jharkhand, to process flat products for customisation, catering to the downstream market. This apart, BMWIL, which employs around 1,500 people, currently has six manufacturing/processing facilities, one in Howrah, West Bengal (own manufacturing and processing), and five in Jamshedpur, Jharkhand (dedicated to conversion work for Tata Steel).
The upcoming Bokaro downstream complex, once commissioned, will be the company’s seventh manufacturing facility. It will have an annual production capacity of 300,000 TPA of cold rolled coils/sheets; 220,000 TPA of Galvalume/ZAM coils and sheets; 300,000 TPA of galvanised coil/sheets; and 200,000 TPA of colour-coated coils/sheets. All these are high-value, speciality steel products, the demand for which has seen a big surge across various industries.
“In fact, all these recent initiatives reflect a broader transformation at BMWIL. The company has been a trusted name in the steel industry for steel processing; we now want to meet the evolving needs of industries with excellence and reliability. Historically rooted in value-added steel conversion, we are now expanding further across the value chain. Combining our core capabilities with proprietary downstream initiatives will enable the company to be more agile, integrated and future-ready. This transition, while gradual, reflects our commitment to long-term sustainable growth through strategic foresight, disciplined execution and prudent capital allocation,” explains Bansal. A commerce graduate from Kolkata University and an alumnus of Harvard Business School, he is currently spearheading the transformation of his family business.
When asked if there could be a conflict of interest with existing clients due to the upcoming Bokaro project, Bansal says: “We have planned our product portfolio quite meticulously, ensuring that none of the products overlap with what we have already been processing/converting for our existing clients. We have been a trusted partner for our customers, who have always reposed faith in us. We want to serve them with integrity and transparency in future as well.”
Trusted name
“The Indian steel industry has laid a strong foundation for the nation’s progress, writing a new chapter in its transformation journey. As India steadily advances towards becoming a five trillion-dollar economy, the steel sector continues to play a pivotal role, particularly by enabling other industries to become globally competitive. At this crucial juncture, our company has remained a trusted name in the industry. As we broaden our capabilities, gain momentum and improve efficiency, we silently power our next leap. As we move forward, our focus will remain on expanding capabilities, maintaining responsible business practices and building a stronger BMWIL for the future,” states Ram Gopal Bansal, 70, chairman and whole-time director, BMWIL.
The father of Bansal, Ram Gopal, along with his two brothers, started the company as a family business in 1981. Located in Howrah, West Bengal, the unit (Bansal Mechanical Works Private Ltd, later rechristened BMW Industries Ltd in 1999) engaged in manufacturing steel pipes and tubes. In 1982, they commissioned their first tube mill and subsequently commenced their relationship with Tata Steel by setting up a steel service centre for conversion work.
Gradually, the company strengthened its relationship with Tata Steel, setting up dedicated facilities for the latter in Jamshedpur. In the early 2000s, the Bansal brothers mutually decided to divide the business among themselves. In the family separation process, Ram Gopal retained the steel processing business under the name BMW Industries Ltd, while his other two brothers took over businesses involved in manufacturing pipes, tubes, poles and other steel structures. Today, one brother’s family owns Utkarsh India Ltd (formerly known as Utkarsh Tubes & Pipes Ltd) – a prominent player in the manufacturing and supply of steel structures, steel ERW pipes, and polymer products – while the other brother’s family runs Skipper Ltd, one of the largest integrated transmission tower manufacturing companies.
Harsh Bansal joined the family business in 1996, followed by his younger brother, Vivek Bansal, 45, who also, as Managing Director, looks after plant operations across the facilities. Harsh, on the other hand, as Managing Director, is responsible for the overall operation of the company as well as the implementation of new projects and other strategic initiatives.
While the company is undertaking a mega greenfield project in Bokaro, it is also carrying out brownfield expansions. The company has expanded its pipes and tubes capacity across its existing plants in Howrah and Jamshedpur. Backed by a total investment of around Rs170 crore, the company has already installed and commissioned capacity to the tune of 600,000 MT per annum in Phase 1, while Phase 2 will see the final capacity of tubes and pipes reaching 700,000 MT per annum by December 2026. Notably, the pipes and tubes manufacturing contracts have been extended until H1 FY2027, with an expected revenue of Rs365 crore over the contract period.
In addition, BMWIL currently has a total installed capacity of 1,014,000 MT per annum for cold rolling mills and 180,000 MT per annum for rolling mills (TMT bars). The company boasts an integrated service ecosystem, offering end-to-end solutions encompassing manufacturing, logistics, and inventory management. It has recently expanded its transport fleet by 35 vehicles to around 120 to improve delivery reliability and regional responsiveness. The company has developed the capability to handle consignments ranging from 400 tonnes to 20,000 tonnes.
“Our manufacturing facilities are strategically located in West Bengal and Jharkhand, close to both raw material sources and key customer markets. Our investments are well targeted to strengthen our foundation for scale, efficiency and market leadership, driving sustainable growth and superior value for customers and stakeholders alike. Operational precision at BMWIL is driven by a strategic focus on continuous improvement and innovation. Through targeted in-house R&D and Kaizen initiatives, we enhance coating technologies, material strength and energy efficiency. Automation and digital controls minimise variability and downtime, while energy audits systematically eliminate waste, boosting cost-effectiveness,” says Harsh Bansal, who, while expanding BMWIL’s exposure to specialty steel products, is also closely looking at areas such as defence and infrastructure for the future. Moreover, the company is also planning to export coated steel products from its Bokaro downstream facility to countries in the EU.
Leveraging capability
“Backed by decades of expertise, BMWIL has evolved into a trusted partner in the steel value chain, known for its manufacturing excellence, operational precision and integrated supply chain capabilities that consistently create value for its customers. We now want to leverage our capabilities in a major way. The upcoming Bokaro facility will be a game changer. It will strengthen BMWIL’s presence in downstream steel processing and meet growing domestic as well as international demand. The facility is strategically located around 300 km from the Haldia/Kolkata port, allowing easy access to global markets. Proximity to raw material sources ensures a stable supply chain, while the well-developed industrial ecosystem in Bokaro supports smooth execution and operation of the project,” states Bansal.
Meanwhile, India Ratings and Research (Ind-Ra) has affirmed BMWIL’s bank loan facilities of around Rs256 crore with a rating and outlook of IND A/Stable/IND A1. While doing so, Ind-Ra notes: “The rating factors in BMWIL’s sustained operating and financial performance in FY2025, are driven by improved realisations and a stable contribution from its conversion business. The company’s EBITDA per tonne remained steady during the year, supporting its comfortable credit metrics. The rating also derives comfort from the renewal of contracts with its key customer, Tata Steel Limited (TSL; debt rated at ‘IND AAA’/Stable), as well as capacity enhancement in the tube segment supported by work orders during the contract period, thereby ensuring revenue visibility.”
“Ind-Ra expects BMWIL’s business profile to strengthen in the near to medium term, aided by higher capacity utilisation in the pipe and tube segment and the phased commissioning of its greenfield facility in Bokaro. Nonetheless, the rating is constrained by the company’s ongoing debt-funded capex, which is likely to moderate its credit metrics during the implementation phase over FY2027-FY2028 but improve post-completion. Any time or cost overrun in the execution of the greenfield capex could adversely impact cash flows and credit metrics, and will remain a key monitorable,” says the credit rating agency.
As the company moves away from the conversion space and builds its own portfolio of steel products, it is also preparing to sell its products in the market. Rather than reaching directly to end customers by establishing its own retail network, it plans to use a dealer-distributor network which experts believe will help it expand its footprint in a more seamless and cost-effective manner. In other words, the company will initially adopt a B2B2C approach rather than B2C.
The Bokaro downstream complex will feature a range of speciality steel products that command growing demand in the market. Galvanised steel sheets/coils are a special type of steel that are hot-dipped in zinc coating to protect them from corrosion and rust, giving the steel a shiny, smooth finish. Galvanised steel sheets/coils are used in a wide range of industries, including construction, automotive, solar and other applications where steel is exposed to weather or other elements. Colour-coated coils and sheets are widely used as pre-engineered building materials. These are versatile products used for various applications, including home appliances, furniture, airports, industrial buildings, and warehouses.
Speciality products
Galvalume steel sheets/coils, also known as Aluzinc steel sheets/coils, are a type of coated steel product that combines the corrosion resistance of aluminium with the galvanic protection of zinc. The coating composition typically consists of around 55 per cent aluminium, 43.5 per cent zinc and 1.5 per cent silicon. The combination of aluminium and zinc offers excellent corrosion resistance, as both metals have inherent protective properties.
Zinc-aluminium-magnesium coated steel sheets/coils are a new type of high corrosion-resistant coating product. These are also called Zn-Al-Mg alloy-coated or ZAM-coated steel sheets/coils. The coating consists of over 85 per cent zinc, 11 per cent aluminium, 3 per cent magnesium and traces of silicon. These have far superior corrosion resistance to traditional zinc and Aluzinc coatings.
ZAM alloy-coated steel sheets/coils are used in construction (roofing, cladding, framing), the automotive industry (motor housings, brackets), home appliances, agricultural structures and general industrial applications, owing to their superior corrosion resistance and self-healing properties. Their enhanced durability makes them suitable for harsh environments such as coastal regions and areas with high humidity or pollutants, often replacing traditional galvanised and Galvalume steels.
India’s steel industry is experiencing rapid growth, securing its position as the world’s second-largest producer. It plays a crucial role in the country’s development, supporting key sectors such as construction, railways, automobiles and manufacturing. Often regarded as the backbone of progress, steel is integral to major infrastructure projects – from skyscrapers and expressways to high-speed rail and smart cities. With the country aiming to become a $5 trillion economy, the demand for steel is expected to rise significantly. Per capita steel consumption, currently over 100 kg, is projected to grow to 160 kg in the coming years, reflecting strong momentum in both usage and production, says a report.
With all these initiatives in place, BMWIL has taken a conscious decision to explore the opportunities arising in the rapidly growing market. The company has been in the contract manufacturing space for quite some time, serving leading steel makers such as Tata Steel and others. Now it has decided to build its own portfolio of value-added steel products, which are witnessing a surge in demand. The upcoming Bokaro complex will be a game-changer for the company as it will not only help it embark on its next growth phase with a major scaling up of its overall business but also help de-risk its business model in a significant way. However, it remains to be seen how effectively it navigates market-related challenges as a manufacturer that will now also have to sell its products in an increasingly competitive environment.