The IPO of stainless-steel pipe manufacturer Scoda Tube kicked off on today, May 28. The public issue, worth Rs 220 crore, is being offered entirely through a fresh issue of 1.57 crore equity shares.
Here’s everything you need to know about the IPO from price band to grey market premium and brokerage views –
Scoda Tubes IPO: A look at the offer
Scoda Tubes IPO is open for bidding between May 28 and May 30. The price band of this mainboard issue is set between the range of Rs 130 to Rs 140 per share, with a minimum lot size of 100 shares.
The IPO is being managed by Monarch Networth Capital. On the other hand, MUFG Intime India (formerly Link Intime) serves as the registrar. The shares are proposed to be listed on both BSE and NSE, with a tentative listing date of June 4.
Scoda Tubes IPO: How is the subscription going?
As of now (Dy 1), the IPO has been subscribed 1.48 times overall so far. Looking at the investor categories, as of now, the retail portion saw 1.47 times subscription, while the Qualified Institutional Buyers (QIB) and Non-Institutional Investors (NII) categories were subscribed 1.48 times and 1.50 times, respectively.
Scoda Tubes IPO: Grey Market Premium (GMP)
In the unofficial market, Scoda Tubes share price is commanding a GMP of Rs 18 per share. Based on the IPO’s upper price band of Rs 140, this translates to a potential listing price of Rs 158, or a 12.86% premium over the issue price.
However it is worth noting that grey market premiums are speculative and the actual listing price can vary depending on market sentiment.
Scoda Tubes IPO: Anchor investment
Ahead of the IPO, Scoda Tubes raised Rs 65 crore from six anchor investors. The list includes Malabar India Fund, MNCL Capital Compounder Fund 2, Aarth AIF Growth Fund, IMAP India Capital Investment Trust – Catalyst New India Fund, Chhattisgarh Investments, and Swyom India Alpha Fund.
Scoda Tubes IPO: What are brokerages saying?
Brokerages have largely been positive on the IPO, citing strong financials and growth potential.
As per Deven Choksey Researchreport, the company’s numbers stand out in comparison to its peers. “Scoda Tubes financial performance has outperformed its peers during FY22-24… Scoda Tubes appears attractively priced compared to peers, and thus we assign a ‘Subscribe’ rating for listing gains. It is recommended to review the position for long-term holding (if allotted),” the brokerage noted.
Meanwhile, Anand Rathi Research offers a slightly more cautious view on valuations but appreciates the company’s strategic edge. It noted,”On valuation parse, based on annualised FY25 it is seeking PE of 25.2 times. FY24 earnings PE stands at 45.9 times and the post-issue market cap comes to Rs 8,387 million. With this, the issue is fully priced. We believe that the company’s key differentiator is its manufacturing process for its crucial raw material, which enables backward integration. This allows Scoda Tubes to exercise greater control over production costs, reduce dependence on third-party suppliers, and improve overall operational efficiency. As the issue is fully priced, we give a ‘Subscribe for long term’ rating for the issue.”
What do Scoda Tubes do?
Founded in 2011, Scoda Tubes is a manufacturer of stainless-steel pipes and tubes, catering to industries such as oil and gas, chemicals, power, and automobiles.
Between FY22 and FY24, the company’s revenue and net profit grew at 43.6% and 234.5% CAGR, respectively.