Stallion India Fluorochemicals Limited, headquartered in Mumbai, has successfully debuted on the stock exchanges at a 33.3% premium on January 23, 2025. The shares of the company were listed at ₹120 on both the NSE and BSE, significantly higher than the issue price of ₹90 per share. This marks a strong debut, reflecting investors' confidence in the company's business model and future prospects.

Founded by Shazad Sheriar Rustomji, the company specializes in the manufacturing of refrigerants and various gases by blending multiple gases to create new formulations. With almost two decades of experience, Stallion India Fluorochemicals is positioning itself as a reliable supplier in the field, catering to both bulk and small cylinder/container requirements for refrigerants and gases.

IPO Details and Financial Highlights

The Stallion India Fluorochemicals IPO was launched with a book-built issue amounting to ₹199.45 crores. This includes a fresh issue of 178.58 lakh shares, valued at ₹160.72 crores, and an Offer for Sale (OFS) of 43.02 lakh shares totaling ₹38.72 crores. The IPO subscription period lasted from January 16 to January 20, 2025, and attracted significant attention from investors, culminating in a staggering 188.38x subscription on the final day.

The grey market premium (GMP) for the IPO was pegged at ₹40, suggesting a potential listing gain of 44.44%. This premium reflects the strong demand for the shares, bolstered by the company's solid financials. However, GMP trading remains unregulated and cannot be relied upon for actual price discovery.

Subscription Trends
As of January 20, the IPO was heavily subscribed, marking a 188.38 times subscription on the final day. This high demand indicates significant investor confidence in Stallion India Fluorochemicals, especially considering the strong financial backing from anchor investors.

Financial Performance and Valuation

Stallion India Fluorochemicals has demonstrated consistent financial growth, with revenues from operations totaling ₹14,153.16 lakh for the period ending September 30, 2024. For the Fiscal Year 2024, the company reported an EBITDA of ₹2,553.76 lakh and a Profit after Tax (PAT) of ₹1,656.51 lakh.

The company has a pre-issue earnings per share (EPS) of ₹2.54 and a post-issue EPS of ₹1.86 for FY24. The pre-issue Price-to-Earnings (P/E) ratio stands at 35.43x, while the post-issue P/E ratio is 48.28x. These ratios indicate a fairly priced IPO relative to its industry peers, where the industry P/E ratio is 57x.

Purpose of the IPO Funds

The funds raised through the IPO will be used for several strategic purposes, including:

1. Funding incremental working capital requirements of the company, amounting to ₹9,500 lakh.
2. Capital expenditure for semi-conductor & specialty gas facilities in Khalapur, Maharashtra, worth ₹2,915.54 lakh.
3. Funding capital expenditure for the refrigerant debulking & blending facility in Mambattu, Andhra Pradesh, estimated at ₹2,117.53 lakh.
4. General corporate purposes.

Anchor Investor Support

The IPO received a significant boost from anchor investors, raising ₹59.83 crore at the issue price of ₹90 per share. 66,48,418 equity shares were allocated to these investors, further bolstering confidence in the stock's potential.

Grey Market Premium (GMP)
The Grey Market Premium (GMP) for Stallion India Fluorochemicals IPO has seen fluctuations during the subscription period, with values as high as ₹40 on January 15, reflecting strong market interest.

Stallion India Fluorochemicals IPO Allotment Date
The allotment for the Stallion India Fluorochemicals IPO was finalized on January 21, 2025. Investors can check their allotment status via the Registrar Website by entering their application number, PAN, or DP Client ID.

Key Metrics and Performance Indicators

The Return on Capital Employed (ROCE) for FY24 stands at 13.96%, while the Return on Equity (ROE) is 12.54%, signaling a solid return generation capability. The company's Return on Net Worth (RoNW) is also 12.54% for FY24.

The annualized EPS for FY24 is ₹5.38, and the P/E ratio is 16.72x, indicating that the IPO is priced fairly compared to its financial performance and industry standards.

Conclusion and Recommendations

Based on the strong financials, high demand, and promising growth prospects, the Stallion India Fluorochemicals IPO appears to be a solid investment. The listing gains and the company's growth trajectory make it an attractive opportunity for investors looking for exposure in the refrigerants and gases industry.

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