Scoda Tubes to launch Rs 220 crore IPO from May; check price band & other key details

Ahmedabad-based Scoda Tubes, a prominent manufacturer of stainless-steel tubes and pipes, is set to enter the public market with its Initial Public Offering (IPO) valued at Rs 220 crore. The company plans to offer shares priced between Rs 130 to Rs 140, with a minimum lot size of 100 equity shares.

The IPO is scheduled to open on May 28 and will close on May 30. Monarch Networth Capital is the merchant banker for this issue, while MUFG Intime India is acting as the registrar. The allotment of shares is expected to be finalised by June 2, and the shares will commence trading on June 4. The basis of allotment is scheduled for June 2, with refunds initiated shortly thereafter. Shares are expected to be credited to demat accounts by June 3, with trading commencing on June 4.

Scoda Tubes' IPO comprises solely a fresh issue, with no offer-for-sale component, ensuring all proceeds directly benefit the company. In a pre-IPO placement conducted in October of the previous year, the company raised Rs 55 crore by issuing 44 lakh equity shares at Rs 125 each. Notably, well-known funds such as Malabar India Fund and Carnelian Bharat Amritkaal Fund participated in this pre-IPO round.

The company operates a manufacturing facility in Mehsana, Gujarat, with an annual production capacity of 20,000 MT of mother hollow, 10,068 MT of seamless products, and 1,020 MT of welded products. With a diverse client base, Scoda Tubes serves industries including engineering, oil and gas, chemicals, fertilisers, power, pharmaceuticals, automotive, railways, and transportation.

Financially, Scoda Tubes reported a profit of Rs 24.9 crore on a revenue of Rs 361.2 crore for the nine-month period ending December 2024. The fiscal year 2024 saw the company’s profit rise by 77% to Rs 18.3 crore and revenue increase by 31% to Rs 400 crore compared to the previous year. The company seeks a valuation of Rs 772 crore at the price of Rs 125 per share.

The funds raised through the IPO will be allocated towards expanding the production capacity of seamless and welded tubes and pipes, with Rs 77 crore earmarked for this purpose. Additionally, Rs 110 crore will be directed towards incremental working capital requirements. The remaining proceeds will support general corporate activities.

In terms of IPO reservation, 50% of the issue size is allocated for qualified institutional buyers, 35% for retail investors, and the remaining 15% for non-institutional investors. The anchor book for the IPO will open on May 27, a day before the official opening for other investors.

Scoda Tubes' promising financial results and strategic use of IPO proceeds position the company well for growth, making this IPO an anticipated event on the Dalal Street. Experts suggest that potential investors evaluate the company's financial performance and market positioning before deciding.