Scoda Tubes IPO Day 3 Live: Issue subscribed 10.51x so far. Check GMP, subscription status, more. Apply or not?
Scoda Tubes IPO Day 3 Live: The public offering for Scoda Tubes, a manufacturer of stainless-steel tubes and pipes, has garnered an impressive response during its first two days and will close today (Friday, May 30). Scoda Tubes IPO price band was established at ₹ 130-140 per share.
The company's valuation stands at approximately ₹ 840 crore at the highest point of the price range, according to brokerages.
Fifty percent of the total issue size has been allocated for qualified institutional buyers, 35 percent for retail investors, and the remaining 15 percent for non-institutional investors.
The firm specializes in manufacturing stainless-steel tubes and pipes, serving a wide variety of clients, including EPC and industrial companies involved in sectors such as oil and gas, chemicals, fertilizers, and power, among others.
As per red herring prospectus (RHP), the Ratnamani Metals & Tubes Ltd (with a P/E of 31.93 times), Venus Pipes & Tubes Ltd (with a P/E of 30.77 times), Welspun Specialty Solutions Ltd (with a P/E of 27.15 times), and Suraj Ltd (with a P/E of 34.79 times).
The initial public offer of Scoda Tubes IPO has been subscribed 19.17 times on the second day of subscription, as per BSE data.
The initial share sale received bids for 22,70,84,900 shares against 1,18,46,169 shares on offer, as on 12:54 IST, according to BSE.
The portion for retail investors received 11.74 times subscription while the quota for non-institutional investors subscribed 54.38 times to the issue. The qualified institutional buyers (QIBs) portion has been booked 5.76 times.
On the first bidding day, Scoda Tubes IPO subscription status was 2.06 times.
According to Canara Bank Securities has provided insights on Scoda, which is currently valued at a P/E ratio of 30.43x and a P/B ratio of 8.76x based on FY24 projections. These figures are in line with industry averages, which stand at approximately 31.96x for P/E and 9.56x for P/B.
Although there are concerns regarding cash flow efficiency and reliance on key distributors, Scoda's consistent profitability, strategic asset-backed expansion, and favorable trends in the sector contribute to its appeal. As a result, the brokerage suggests that long-term investors consider subscribing, especially those looking to invest in India's precision engineering and export-oriented manufacturing sectors.
SBICAP Securities is valued at 9MFY25 with an annualised P/E ratio and an EV/EBITDA multiple of 21.8x/9.6x, based on the post-issue capital at the upper price limit. During the FY22-FY24 timeframe, the company experienced a CAGR of 44% in revenue, 143% in EBITDA, and 235% in PAT, reaching ₹ 400 crore, ₹ 59 crore, and ₹ 18 crore, respectively.
According to industry forecasts, the Indian SS pipes and tubes sector is expected to grow significantly, with a projected CAGR of 6% - 8% for the FY24-FY29E period. The brokerage advises investors to SUBSCRIBE to the issue at the cut-off price.
According to Sachin Jasuja, Founding partner and Head of Equities at Centricity, Scoda Tubes is a stainless-steel tubes and pipes manufacturer with 14+ years of experience, focused on seamless products backed by backward integration via an in-house hot piercing mill. It serves diverse industries like oil & gas, power, and pharma, both domestically and across 11 countries. One-third of revenue comes from exports, and ongoing global market uncertainty remains a key risk. The company offers job work services and holds quality certifications and approvals from major PSU and private clients.
'Financially, Scoda maintains decent metrics (ROE/ROCE ~13.5%, margins ~12%). However, growth has moderated in the last 9 months, and an earnings CAGR above 20% seems unlikely. Current valuations (implied P/E ~35–40) appear fair. Overall, Scoda presents a stable but moderately growing business with reasonable financial and expansion potential, though near-term upside may be capped without stronger demand visibility,' said Jasuja.
Scoda Tubes IPO from the Gujarat-based company involves a complete fresh issue of equity shares totaling up to ₹ 220 crore, with no offer for sale (OFS) component included.
The funds raised through this issue will primarily be allocated towards expanding the production capacity for seamless and welded tubes and pipes, meeting working capital needs, and addressing general corporate purposes.
Monarch Networth Capital is serving as the book-running lead manager for this IPO.
Scoda Tubes IPO GMP today is +22. This indicates Scoda Tubes share price is trading at a premium of ₹ 22 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Scoda Tubes share price is indicated at ₹ 162 apiece, which is 15.71% higher than the IPO price of ₹ 140.
According to the activities observed in the grey market over the last eight sessions, the IPO GMP is showing an upward trend today, indicating a solid listing is anticipated. The minimum GMP recorded is ₹ 16.00, and the maximum GMP is ₹ 22, as noted by experts at investorgain.com.
'Grey market premium' indicates investors' readiness to pay more than the issue price.
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