Scoda Tubes IPO Day 3 Live: Issue subscribed 8.11x 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 8.11 times on the second day of subscription, as per BSE data.
The initial share sale received bids for 9,61,29,600 shares against 1,18,46,169 shares on offer, as on 17:00 IST, according to BSE.
The portion for retail investors received 6.46 times subscription while the quota for non-institutional investors subscribed 20.21 times to the issue. The qualified institutional buyers (QIBs) portion has been booked 1.93 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.
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.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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