Standard Glass Lining Technology IPO: A Strong Start and What Investors Need to Know
After an impressive response from investors in the first two days, the Standard Glass Lining Technology IPO is set to close for subscription today. This initial public offering (IPO) has garnered significant attention, with a total issue size of Rs 1,250 crore, which includes a fresh equity issue of up to Rs 210 crore and an offer for sale of up to 1.42 crore shares.
Robust Demand and Subscription Rates
The IPO has witnessed overwhelming demand, with subscriptions reaching nearly 35 times by the end of Day 2. This surge in interest was primarily driven by non-institutional investors, whose category was subscribed an astonishing 78 times. Retail investors also showed strong enthusiasm, with their portion subscribed 32.8 times. Such robust demand indicates a high level of confidence in the company’s prospects and market position.
Current Market Performance
As of now, the Grey Market Premium (GMP) for Standard Glass Lining stands at Rs 96, reflecting a premium of 69% over the issue price. This strong GMP suggests that investors are optimistic about the stock’s performance post-listing, further fueling interest in the IPO.
Utilization of Proceeds
The proceeds from the fresh issue will be strategically allocated to various growth initiatives. The company plans to use the funds for capital expenditure, including the purchase of machinery and equipment, repayment of existing debt, and investments in its wholly-owned subsidiary, S2 Engineering Industry. Additionally, the funds will support inorganic growth through strategic investments and cover general corporate purposes. This diversified approach to fund utilization underscores the company’s commitment to sustainable growth and expansion.
Price Band and Subscription Details
The price band for the Standard Glass Lining IPO has been set between Rs 133 and Rs 140 per share. Investors can bid for a minimum of 107 shares in one lot, with the option to apply for additional lots in multiples thereafter. This pricing strategy aims to attract a broad range of investors, from retail to institutional.
Analyst Recommendations
Market analysts have generally recommended subscribing to the IPO, citing a robust growth outlook. The company is projected to achieve revenue growth between 20-25% in the medium term, driven by geographical and product expansion. Based on the upper price band, the company is valued at a FY24 price-to-earnings (P/E) ratio of 47.8x. Analysts from SBI Capital Securities have noted that when compared to its peers, the issue is fairly valued and offers a superior margin profile, making it an attractive long-term investment opportunity.
Company Overview
Standard Glass Lining is recognized as one of the top five specialized engineering equipment manufacturers for the pharmaceutical and chemical sectors in India, based on revenue for FY24. The company boasts comprehensive in-house capabilities that span the entire value chain, including design, engineering, manufacturing, assembly, installation, and commissioning solutions. This positions Standard Glass Lining as a key player in the Glass-Lined Equipment (GLE) industry, which is poised for significant growth due to its ability to protect contained media from exposure to harmful elements and its resistance to contamination.
In FY24, the company reported a 9% year-on-year increase in revenue from operations, reaching Rs 544 crore, while profit after tax rose by 13% to Rs 60 crore. For the six months ending September 2024, revenues stood at Rs 307 crore, with profits at Rs 36 crore, indicating a solid financial performance.
Key Dates and Final Thoughts
The allotment for the Standard Glass Lining IPO is expected to be finalized on January 9, with shares slated for listing on January 13. As the subscription period comes to a close, potential investors are encouraged to consider the strong demand, positive analyst outlook, and the company’s growth potential before making their investment decisions.
In conclusion, the Standard Glass Lining Technology IPO presents a compelling opportunity for investors looking to tap into the growing engineering equipment sector. With robust demand and a strategic plan for utilizing the proceeds, this IPO could be a significant addition to an investor’s portfolio.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own and do not represent the views of The Economic Times.)