Tankup Engineers Limited, a renowned manufacturer of self-bunded fuel tanks in India, has launched its IPO in 2025. The company, known for providing innovative and high-quality fuel storage solutions, is now offering its shares to the public as part of its efforts to expand and meet the growing demands of industries like agriculture, mining, construction, and logistics.

IPO Overview and Key Dates

Tankup Engineers' IPO, amounting to ₹19.53 Crores, consists entirely of a Fresh Issue of 13.95 Lakh shares. The subscription period for this IPO opens on April 23, 2025, and closes on April 25, 2025. Investors will be able to track the allotment, which is expected to be finalized by April 28, 2025, with the tentative listing date scheduled for April 30, 2025.

The IPO offers shares in a price band ranging from ₹133 to ₹140 per equity share. At the upper price band, the market capitalization of Tankup Engineers will be ₹74.13 Crores, making it an interesting opportunity for both retail and institutional investors. The IPO lot size is set at 1,000 shares, requiring a minimum investment of ₹1,40,000 for retail investors. High-Net-Worth Individuals (HNIs) are expected to invest a minimum of ₹2,80,000 (2 lots).

Key Financial Details

Tankup Engineers has shown a steady financial growth over the past few years, with its revenue from operations for the fiscal year ending 2024 standing at ₹1,247.51 Lakhs. The company's EBITDA and profit after tax (PAT) have also seen positive trends, reflecting healthy operational efficiency. The company’s EBITDA for FY24 was ₹162.28 Lakhs, while PAT stood at ₹94.70 Lakhs.

The company’s pre-issue EPS stands at ₹9.34, while the post-issue EPS is expected to be ₹4.85 for FY24. The P/E ratio at the pre-issue level is 14.99x, and post-issue, it will be 28.86x. These numbers indicate that the IPO is priced fairly compared to its earnings potential. Tankup's ROCE for FY24 is a remarkable 46.49%, and its ROE stands at 107.11%, with a RoNW of 69.75%, indicating strong returns on capital and equity.

Grey Market Premium and Subscription Trends

As of the latest updates, the Grey Market Premium (GMP) of Tankup Engineers IPO is ₹0, suggesting no expected listing gains at this point. This indicates a lack of market enthusiasm, possibly due to the company's financial performance and overall market sentiment. It is important to note that the GMP is driven by the demand and supply of shares in the unorganized market, and it should be used solely for educational purposes. No definitive price discovery occurs until the shares are listed on the stock exchange.

The live subscription status shows that, by April 25, 2025, the IPO has been subscribed 116.17 times, signaling high investor interest, especially in the final hours of the subscription period. Investors are eagerly awaiting the final allotment and listing.

Anchor Investors

Tankup Engineers raised ₹5.39 Crores from Anchor Investors, who purchased shares at the upper price band of ₹140 per share. A total of 3,85,000 equity shares were allocated to these investors, which provides some insight into the confidence shown by institutional investors in the company. It is important to note that the equity shares allotted to Anchor Investors are drawn from the Qualified Institutional Buyers (QIBs) reservation portion of the IPO.

IPO Objectives

The funds raised from the IPO will be used for several strategic purposes:

1. Repayment of Borrowings: ₹350 Lakhs will be used to clear outstanding debts, providing the company with a more stable financial footing.

2. Working Capital: A significant portion of ₹1,000 Lakhs will be utilized to meet the company’s working capital requirements, enabling smoother operations and growth.

3. General Corporate Purposes: The remaining proceeds will be used for general corporate activities to support the company's ongoing initiatives.

Company and Promoter Overview

Tankup Engineers is led by experienced promoters, including Govind Prasad Lath, Gaurav Lath, and Pankhuri Lath, who collectively bring over 47 years of industry experience. The company’s promoters are committed to pursuing aggressive growth strategies to capitalize on the expanding market for fuel storage solutions. However, investors should be mindful that there are no guarantees the company will achieve its anticipated goals, and the execution of its growth plans remains a crucial factor in its success.

Financial Performance and Growth Prospects

Tankup Engineers has shown consistent growth in its financials. The Revenue from operations for the fiscal years ending 2024, 2023, and 2022 stood at ₹1,247.51 Lakhs, ₹1,954.07 Lakhs, and ₹1,185.20 Lakhs, respectively. The EBITDA for the same period was ₹162.28 Lakhs, ₹360.77 Lakhs, and ₹131.92 Lakhs. This growth trend reflects the company’s ability to increase its operational scale and manage costs efficiently, ensuring long-term sustainability in the competitive fuel storage industry.

Despite the Grey Market Premium not showing any significant listing gains, the company’s strong financial performance and solid growth prospects position it well for future expansion, especially given the increasing demand for efficient and safe fuel storage solutions across various sectors.

IPO Review and Recommendation

Based on the current financial metrics and IPO pricing, Tankup Engineers Limited IPO seems fairly priced. The company’s consistent growth trajectory and strong financial indicators, such as high ROE and ROCE, offer some confidence in its potential. However, the Grey Market Premium and lack of real trading activity suggest that the IPO may not provide immediate listing gains. Investors seeking short-term profits from listing gains might consider exploring other opportunities, while those interested in long-term growth may choose to invest in Tankup Engineers, considering its solid fundamentals.

Conclusion

The Tankup Engineers IPO presents an opportunity for investors looking for exposure to the growing fuel storage industry in India. With strong financials, an experienced management team, and a fair valuation, this IPO is certainly worth considering for those with a long-term investment horizon. However, investors should remain cautious about the current Grey Market Premium and the potential for short-term price fluctuations post-listing.

The Upcoming IPOs in this week and coming weeks are Ather Energy, Iware Supplychain Services, Arunaya Organics,Kenrik Industries.

The Closed IPOs are Tankup Engineers.

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