Scoda Tubes IPO sails through on day 1 on QIB push. Check GMP, reviews, other details
The initial public offering (IPO) of Scoda Tubes, which opened for subscription on May 28, was fully subscribed on the first day of the bidding process.
ADVERTISEMENT The highest subscription was witnessed by the qualified institutional buyers (QIBs), who booked the issue by 1.37 times around 1:41 pm today. This was followed by the non-institutional investors (NIIs) and retail investors, who stood at a subscription of 92% and 81% respectively.
The stainless-steel tubes and pipes manufacturer plans to raise Rs 220 crore entirely through a fresh issue of shares, priced in the range of Rs 130–140 per share. The company is offering between 1.57 crore and 1.69 crore shares and will be listed on both the NSE and BSE.
The shares of Scoda Tubes are trading at a premium of Rs 18-20 in the unlisted market, making them trade at a grey market premium (GMP) of 12.86%.Brokerage firm Canara Bank Securities has recommended a 'SUBSCRIBE' rating for long-term investors. It noted that the company's technical expertise, rising export share, asset-backed expansion, and sector tailwinds position it well for scalable growth. While the IPO is priced at a P/E of 30.43x and a P/B of 8.76x -- broadly in line with industry peers -- investors should be mindful of cash flow concerns and customer concentration risks.Analysts at Anand Rathi stated they believe that the company's key differentiator is its manufacturing process of its crucial raw material which enables backward integration, enabling Scoda Tubes to exercise greater control over production costs, reduce dependence on third-party suppliers, and improve overall operational efficiency.
ADVERTISEMENT As the issue is fully priced, they gave a 'Subscribe for long term' rating for the issue.In summary, investors with a long-term view looking to tap into India's industrial and export manufacturing story may consider subscribing to Scoda Tubes IPO.
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The issue and will close on May 30 and the allotment is expected to be finalized by June 2, and the stock is likely to debut on the exchanges on June 4.The company, incorporated in 2008, specializes in manufacturing stainless-steel seamless and welded tubes, which are supplied to key sectors including oil & gas, chemicals, power, railways, and pharmaceuticals.
ADVERTISEMENT It operates out of Mehsana, Gujarat, with backward integration through a hot piercing mill, and has a growing export presence across 11 countries. In the first nine months of FY25, export revenue accounted for over 28% of total revenue.Financially, the company has delivered strong performance over the years. Revenue nearly doubled from Rs 194 crore in FY22 to Rs 400 crore in FY24, while profit after tax rose significantly from Rs 1.63 crore to Rs 18.3 crore during the same period. The EBITDA margin improved markedly from 5.15% in FY22 to 14.7% in FY24, and return on equity (RoE) reached an impressive 28.77%.
ADVERTISEMENT However, Scoda's cash flow efficiency remains a concern. Despite the sharp rise in revenue and profitability, cash generated from operations in FY24 was limited to just Rs 2.26 crore.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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