Tolins Tyres, a key player in the tyre industry, is set to launch its Initial Public Offering (IPO) on September 09, 2024. This Book Built Issue amounts to ₹230.00 Crores, consisting of a fresh issue of 8.84 lakh shares worth ₹200.00 Crores and an offer for sale of 1.32 lakh shares, totaling ₹30.00 Crores. Investors have until September 11, 2024, to subscribe to the IPO. The allotment of shares is expected to be finalized by September 13, 2024, and the listing is scheduled for September 16, 2024, on BSE and NSE.

The price band for the IPO is set at ₹215 to ₹226 per equity share, with a minimum lot size of 66 shares. Retail investors need a minimum investment of ₹14,916, while HNIs will require at least 14 lots (924 shares) amounting to ₹208,824. The lead manager for this IPO is Saffron Capital Advisors, with Cameo Corporate Services as the registrar.

Financial Performance and Grey Market Premium

Tolins Tyres IPO has garnered interest due to its solid financial performance. The Grey Market Premium (GMP) for the issue is currently expected to be in the range of ₹65 to ₹70, suggesting possible listing gains of 28% to 30%. It's essential to note that GMP is not an official metric and should be considered for educational purposes only, as the actual price discovery will happen on the day of listing.

Subscription and Allotment Status

The subscription period begins on September 09, 2024, and live subscription updates will be available throughout the day. Investors can check the allotment status starting from September 13, 2024, through the registrar's website. Here's how you can check:

Visit the IPO allotment status page.

Select Tolins Tyres IPO from the dropdown.

Enter your application number, PAN, or DP Client ID.

Submit to view your allotment.

Objectives of the IPO

Proceeds from the Tolins Tyres IPO will be used for various purposes:

₹699.69 million to repay certain outstanding loans.

₹750 million to augment long-term working capital.

₹231.54 million to invest in its subsidiary, Tolin Rubbers Private Limited, for loan repayment and working capital needs.

Funds for general corporate purposes.

Company Overview

Founded in 1982, Tolins Tyres started as a small-scale industry and has since become a leading player in the tyre manufacturing sector. The company's product range includes tyres for two-wheelers, three-wheelers, LCVs, and agricultural vehicles. Under the leadership of Dr. Kalamparambil Varkey Tolin, the company has grown significantly, thanks to his expertise in rubber and tyre manufacturing.

In terms of financials, the company's revenue increased from ₹1,143.86 million in FY22 to ₹2,286.93 million in FY24. Its EBITDA also saw a jump from ₹60.90 million in FY22 to ₹463.74 million in FY24, while the PAT rose from ₹6.31 million to ₹260.06 million during the same period. These strong financials make the Tolins Tyres IPO an attractive opportunity for investors.

Investment Opportunity

The pre-issue Earnings Per Share (EPS) stands at ₹9.52, with a post-issue EPS of ₹6.58. The company's pre-issue P/E ratio is 23.74x, and the post-issue P/E ratio is 34.34x, which is comparable to the industry P/E ratio of 34.17x. With an ROCE of 36.08% and an ROE of 25.87% in FY24, the valuation appears reasonable.

Given these factors, the Tolins Tyres IPO is expected to perform well both in terms of listing gains and long-term returns, making it a strong candidate for investment.

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