Scoda Tubes Limited is a prominent Indian manufacturer of stainless steel tubes and pipes with over 14 years of industry experience. The company offers a broad range of products divided into seamless and welded categories, including stainless steel seamless pipes, seamless tubes, seamless “U” tubes, instrumentation tubes, and welded tubes.

The company’s IPO is a Book Built Issue worth ₹220 Crores, entirely a fresh issue consisting of 157.14 lakh equity shares. The subscription window is from May 28 to May 30, 2025, with allotment expected on June 2, 2025, and listing planned on both the BSE and NSE around June 4, 2025. The IPO price band is set between ₹130 and ₹140 per equity share. At the upper band price of ₹140, the company’s market capitalization will be ₹838.73 Crores. The lot size for retail investors is 100 shares, requiring a minimum investment of ₹14,000. High Net Worth Individuals (HNIs) must invest in multiples of 15 lots (1,500 shares) with a minimum of ₹2,10,000.

Monarch Networth Capital Limited is the Book Running Lead Manager for this IPO, while MUFG Intime India Private Limited is the registrar. The Grey Market Premium (GMP) for Scoda Tubes IPO currently stands at ₹15, indicating a potential listing gain of around 10.71%. However, this is purely informational as grey market trading is unofficial and carries risks.

By May 29, 2025, the IPO had received a strong subscription of 8.01 times on its second day, indicating robust investor interest. Anchor investors subscribed to 47.14 lakh shares at the upper band price, raising ₹65.99 Crores.

The company intends to use the IPO proceeds mainly for expanding production capacity with ₹76.99 Crores allocated to capital expenditure for seamless and welded tube manufacturing. Additionally, ₹110 Crores will be used for incremental working capital needs, and the rest for general corporate purposes.

Financially, Scoda Tubes has demonstrated steady growth:

• Revenue grew from ₹195.05 Crores in FY22 to ₹363.48 Crores in the nine months ended Dec 31, 2024

• EBITDA rose from ₹11.01 Crores (FY22) to ₹62.94 Crores (9M FY25)

• Profit after tax increased substantially from ₹1.64 Crores (FY22) to ₹24.91 Crores (9M FY25)

Key ratios for FY24 include a pre-issue EPS of ₹4.6 and a post-issue EPS of ₹3.05. The pre-issue Price-to-Earnings (P/E) ratio stands at 30.43x, with the post-issue P/E ratio at 45.83x, compared to the industry average of 31x. The company reports a Return on Capital Employed (ROCE) of 15.92%, Return on Equity (ROE) of 28.77%, and Return on Net Worth (RoNW) of 28.77%. The annualized EPS is ₹8.10 with a PE ratio of 17.26x based on the latest data, suggesting the IPO is fairly priced but at a premium relative to the industry.

Given the strong subscription response, promising financials, and positive GMP, the IPO is recommended for risk-tolerant investors seeking listing gains.

Disclaimer: This review is informational only and not financial advice. Investors should consult professional advisors before investing. Investment in securities involves risks.

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