Tolins Tyres Limited made a modest entry into the stock market on Monday, September 16, with its shares listing at ₹228 on the NSE, reflecting a 1% premium over the issue price of ₹226 per share. The stock price quickly surged, climbing to ₹239 per share, representing a 5% gain post-listing. On the BSE, the shares opened at ₹227 each.

Company Overview

Founded in 1982 as a small-scale industry, Tolins Tyres Limited has grown into one of the leading producers in the Indian tyre industry. The company specializes in manufacturing a broad range of products, including two-wheeler and three-wheeler tyres, Light Commercial Vehicle (LCV) tyres, and Agriculture tyres. Over the years, Tolins Tyres has developed a strong brand presence and continues to expand its market share.

Tolins Tyres IPO Details

The Tolins Tyres IPO, a Book Built Issue totaling ₹230 crore, consisted of a Fresh Issue of 0.88 crore shares worth ₹200 crore and an Offer for Sale (OFS) of 0.13 crore shares, amounting to ₹30 crore. The IPO was open for subscription between September 9 and September 11, 2024. The allotment was finalized on September 13, 2024, and shares were listed on the BSE and NSE on September 16, 2024.

The IPO was offered with a price band set between ₹215 and ₹226 per equity share, and the minimum lot size was 66 shares. For retail investors, the minimum investment required was ₹14,916, while High-Net-Worth Individuals (HNIs) needed to invest in at least 14 lots (924 shares), totaling ₹208,824.

IPO Subscription Status

The Tolins Tyres IPO saw robust investor demand, with a subscription rate of 23.89 times by the final day. This strong interest reflects the market's positive sentiment towards the company's business model and growth prospects.

For real-time updates on the IPO, investors can check the Tolins Tyres Limited IPO subscription status on the BSE website.

Grey Market Premium (GMP)

The Grey Market Premium (GMP) for Tolins Tyres IPO was in the range of ₹65 to ₹70, suggesting potential listing gains of 28% to 30%. While the Grey Market provides a preliminary indication of demand, it is essential for investors to make informed decisions based on the company’s official financial data rather than relying solely on GMP.

Financial Performance

Tolins Tyres has demonstrated stable financial growth over the past few years. The company's revenue grew from ₹1,143.86 million in FY22 to ₹1,196.79 million in FY23, with a significant jump to ₹2,286.93 million in FY24. Similarly, EBITDA increased from ₹60.90 million in FY22 to ₹122.61 million in FY23, and further surged to ₹463.74 million in FY24. The Profit After Tax (PAT) grew from ₹6.31 million in FY22 to ₹49.92 million in FY23, with a substantial rise to ₹260.06 million in FY24.

These metrics highlight the company's steady growth trajectory, driven by strategic investments and a diversified product portfolio.

Tolins Tyres IPO Pricing & Valuation

For the Tolins Tyres IPO, the company is offering shares at a pre-issue EPS of ₹9.52 and a post-issue EPS of ₹6.58. The pre-issue P/E ratio stands at 23.74x, while the post-issue P/E ratio is 34.34x, closely aligned with the industry P/E ratio of 34.17x. The company’s Return on Capital Employed (ROCE) for FY24 is 36.08%, and the Return on Equity (ROE) is 25.87%, indicating a solid return on investment.

IPO Objectives

The proceeds from the Tolins Tyres IPO will be used for the following:

₹699.69 million will be allocated for repayment and prepayment of certain outstanding loans.

₹750 million will be utilized for augmenting long-term working capital requirements.

₹231.54 million will be invested in the company’s wholly-owned subsidiary, Tolin Rubbers Private Limited, to repay and prepay its short- and long-term borrowings and for working capital purposes.

The remaining proceeds will be used for general corporate purposes.

Tolins Tyres IPO Allotment Status

The allotment date for the Tolins Tyres IPO was September 13, 2024. Investors can check their allotment status on the Cameo Corporate Services Limited website by following these steps:

Visit the IPO allotment status page.

Select Tolins Tyres Limited IPO from the dropdown list.

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

Submit the details to view the status of your allotment.

IPO Review and Recommendation

Tolins Tyres has emerged as a key player in the Indian tyre industry, with a diverse product portfolio and a strong financial position. The company’s revenue and profitability have shown consistent growth, and its strategic initiatives, such as investments in its subsidiary, Tolin Rubbers Private Limited, indicate a forward-thinking approach.

The Grey Market Premium suggests potential listing gains of 28% to 30%, making this IPO an attractive option for investors looking for short-term profits. However, the company’s long-term growth prospects and solid financial foundation also make it a compelling option for long-term investments.

With a P/E ratio that aligns with the industry average and strong ROCE and ROE, the Tolins Tyres IPO is fairly priced. We recommend investors to apply for the Tolins Tyres IPO for both listing gains and long-term growth.

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