Scoda Tubes IPO: A Comprehensive Overview

The initial public offering (IPO) of Scoda Tubes Limited has officially launched, marking a significant moment for investors in the Indian primary market. The public issue opened on Wednesday and will remain accessible until May 30, 2025. With a price band set between ₹130 and ₹140 per equity share, Scoda Tubes aims to raise ₹220 crore through the issuance of fresh shares, which are expected to be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

Subscription Status

As of 5:00 PM on the second day of bidding, the IPO has garnered considerable interest. The book build issue has been subscribed 8.11 times overall, with the retail portion booked 6.46 times. Notably, the Non-Institutional Investors (NII) segment has seen a remarkable subscription rate of 20.21 times, while the Qualified Institutional Buyers (QIB) portion has been filled 1.93 times. This strong demand indicates a positive sentiment among investors.

Key Details of Scoda Tubes IPO

1. Grey Market Premium (GMP): Shares of Scoda Tubes are currently trading at a premium of ₹24 in the grey market, reflecting a slight increase from the previous day’s ₹23.

2. Price Band: The company has established a price band for the public issue at ₹130 to ₹140 per equity share.

3. Subscription Dates: The IPO opened on Wednesday and will close on May 30, 2025.

4. Issue Size: Scoda Tubes aims to raise ₹220 crore through this IPO.

5. Lot Size: Investors can apply in lots, with one lot consisting of 100 shares.

6. Allotment Date: The expected date for finalizing share allocations is May 31, 2025. If there are any delays, applicants may receive their shares on the following Monday.

7. Registrar: MUFG Intime India Private Limited or Link Intime India Private Limited has been appointed as the official registrar for this IPO.

8. Investment Limits: Retail investors can apply for a minimum of one lot and a maximum of 14 lots. This means an initial investment of at least ₹14,000 (₹140 x 100) and a maximum of ₹1,96,000 (14 x ₹140 x 100).

9. Listing Date: The shares are anticipated to be listed on June 4, 2025.

Investment Outlook: Is Scoda Tubes IPO Worth It?

Analyst Recommendations

Several analysts have weighed in on the Scoda Tubes IPO, providing insights into its potential as an investment opportunity. Canara Bank Securities has assigned a ‘subscribe’ rating, highlighting the company’s technical specialization, backward integration, and global certification profile. These factors position Scoda Tubes as a long-term player in the precision stainless-steel manufacturing sector. The firm notes that rising export contributions and a focus on high-margin seamless products align well with industrial and infrastructure growth trends, enhancing the company’s scalability.

At the upper price band of ₹140, Scoda Tubes is valued at a Price-to-Earnings (P/E) ratio of 30.43x and a Price-to-Book (P/B) ratio of 8.76x based on FY24 figures. These valuations are reasonably aligned with industry peers, which average around 31.96x P/E and 9.56x P/B. While concerns regarding cash flow efficiency and dependency on key distributors exist, the company’s consistent profitability and asset-backed expansion make it an attractive option for long-term investors.

SBI Capital Securities has also recommended subscribing to the IPO, noting that the company is valued at a 9MFY25 annualized P/E and EV/EBITDA multiple of 21.8x and 9.6x, respectively. The company’s revenue, EBITDA, and PAT have shown impressive growth rates of 44%, 143%, and 235% from FY22 to FY24. The Indian stainless steel pipes and tubes industry is projected to grow at a CAGR of 6% to 8% from FY24 to FY29, further supporting the investment case for Scoda Tubes.

Conclusion

The Scoda Tubes IPO presents a compelling opportunity for investors looking to tap into the growing precision engineering and export-oriented manufacturing sectors in India. With strong subscription rates and positive analyst recommendations, this IPO could be a valuable addition to a diversified investment portfolio. However, as always, potential investors should conduct their own research and consult with certified experts before making any investment decisions.

Disclaimer: The views and recommendations expressed in this article are those of individual analysts or brokerage firms and do not reflect the opinions of Mint. Investors are advised to seek professional advice before making any financial commitments.