Scoda Tubes IPO invites bids: GMP up 16%; should you park your money?

Business Standard

28-05-2025

Scoda Tubes IPO opens for subscription: The initial public offering (IPO) of the stainless-steel tubes and pipes manufacturing company, Scoda Tubes, opens for public subscription today, Wednesday, May 28, 2025. At the upper end, the company seeks to raise ₹220 crore from the public offering.
Ahead of the opening of the public offering, Scoda Tubes has already raised ₹66 crore from anchor investors in a bidding that concluded on Tuesday, May 27.
As the public offering opens for subscription, here are the key details of the Scoda Tubes IPO:
Scoda Tubes IPO structure
Scoda Tubes IPO is a book-built issue comprising an entirely fresh issue of 15.7 million equity shares, aggregating up to ₹220 crore. The public offering does not have any offer-for-sale (OFS) component.
Scoda Tubes has reserved not more than 50 per cent of the net offer for qualified institutional buyers, not less than 35 per cent for retail investors, and not less than 15 per cent for non-institutional investors.
Scoda Tubes IPO lot size, price band
Scoda Tubes IPO is available at a price band of ₹130–140 per share, with a lot size of 100 shares. Accordingly, investors can bid for a minimum of 100 shares of Scoda Tubes and in multiples thereof.
The minimum amount required by a retail investor to bid for the Scoda Tubes IPO is ₹14,000. A retail investor can bid for a maximum of 14 lots or 1,400 shares, amounting to ₹1,96,000. ALSO READ |
Scoda Tubes IPO grey market premium (GMP)
The unlisted shares of Scoda Tubes were commanding a decent premium in the grey market ahead of the opening of the public issue. Sources tracking unofficial market activities revealed that Scoda Tubes shares were seen trading at around ₹162 per share, reflecting a grey market premium (GMP) of ₹22 or 15.71 per cent over the upper end of the issue price.
Scoda Tubes IPO allotment date, listing date
The three-day subscription window to bid for Scoda Tubes will conclude on Friday, May 30, 2025. Following the closure of the subscription window, the basis of allotment of Scoda Tubes shares is likely to take place on Monday, June 2, 2025, with the shares being credited to demat accounts on Tuesday, June 3, 2025.
Shares of Scoda Tubes are scheduled to make their D-Street debut on Wednesday, June 4, 2025, by listing on the BSE and NSE.
Scoda Tubes IPO objective
The company proposes to utilise the proceeds from the public offering to finance capital expenditure for expanding the production capacity of seamless and welded tubes and pipes, amounting to ₹77 crore. An amount of ₹110 crore, the company said, will be allocated towards funding a part of the company's incremental working capital requirements. The remaining will be used for general corporate purposes.
Scoda Tubes IPO registrar, lead managers
Should you subscribe to the Scoda Tubes IPO?
Bajaj Broking - Neutral
Analysts at Bajaj Broking have assigned a Neutral rating on the Scoda Tubes IPO, and advised a cautious approach for investment at this stage.
"Considering the operational strengths but also factoring in the existing working capital challenges, market risks, and margin pressures, we maintain a neutral view on Scoda Tubes. The outlook remains stable, with medium-term performance likely to depend on improved cash flow management, sustained demand from infrastructure sectors, and mitigation of external risks."
Angel One - Subscribe for long-term
At the current price band, Vaqarjaved Khan, Sr. Fundamental Analyst, Angel One, said that it is a decent opportunity for someone seeking to play out the infrastructure and industrial growth story in India. "In the longer term, it can provide decent gains, but one should also be cautious regarding the competitive industry it operates in, as well as keep a close eye on its cash flow trajectory."
"Sectoral demand for its products continues to remain strong in the infrastructure and industrial segments. Meanwhile, in the last two years, revenue has doubled for the company and operating margin has also expanded by 1000 bps to 15 per cent during the same time frame. On the negative front, the company operates in a highly competitive space with big players commanding high market share. Also, OCF for the company for FY22, FY23, and FY24 is negative, which is not a good sign," said Khan.
About Scoda Tubes
Scoda Tubes is an Indian manufacturer of stainless-steel tubes and pipes with over 14 years of experience in the industry. Headquartered in Gujarat, the company specialises in producing high-quality stainless-steel solutions that cater to both domestic and international markets. The company's product offerings are broadly classified into two categories—seamless tubes and pipes, and welded tubes and pipes—and are further segmented into five key product lines: stainless steel seamless pipes, stainless steel seamless tubes, stainless steel seamless 'U' tubes, stainless steel instrumentation tubes, and stainless steel welded tubes and 'U' tubes.