Situated near the Purana Madarsa, this bawdi or stepwell was built in 1485 by Qazi-ibn-Mehran under orders from the then ruler of Chanderi, Sher Khan Ghazi. The well is circular and two staircases descend to the well from opposite sides. There are two arched entrance bays and these are flanked by two inscriptions. The inscriptions inform us that four constructions were carried out during the reign of Sher Khan Ghazi.
These were: this stepped bawdi, a palatial caravanserai, a mosque and a garden known as Aatishay Namrood.
No vestiges of the garden remain and only ruins of the rest house can be seen. However, the step well and the mosque have survived.