The Rs 220-crore IPO of Scoda Tubes was subscribed over 2 times its offer size on its first day of public bidding (May 28). The maiden public issue of the stainless steel pipes and tubes-maker received bids for over 2.43 crore shares, as against the offer size of 1.18 crore shares, according to data on NSE.
Non Institutional Investors (NII) overtook retail investors in the subscription rally by booking their reserved portion 2.86 times. Retail investors closely followed by subscribing their reserved portion over 2 times. Qualified Institutional Buyers (QIBs) meanwhile booked their reserved portion nearly 1.4 times.
The IPO of the Ahmedabad-based company solely comprises a fresh issue of 1.57 crore shares at a price band of Rs 130-140 per share. The issue will remain open for public bidding from May 28 to May 30. The shares are expected to be listed on BSE and NSE on June 4.
Investors can apply for a minimum of 100 shares, requiring an investment of Rs 14,000, and in multiples thereafter.
Scoda Tubes IPO GMP:
Ahead of their official market debut, the unlisted shares of the company were trading at Rs 158 apiece in the grey market, as per data on Investorgain at 3.30 pm. This implies a grey market premium (GMP) of 12.86 percent (Rs 18) over the IPO price of Rs 140 per share.
According to IPO Watch, the unlisted shares of the company were trading at Rs 164 apiece, implying a GMP of over 17 percent.
Should you apply for Scoda Tubes IPO?
Bajaj Broking has kept a 'Neutral' rating for the IPO, and advised a cautious approach for investment opportunity. "Recent financial indicators such as an increase in debtor days (from 62 in FY23 to 82 in FY24), rising working capital cycle, and a decline in current ratio (from 1.22 in FY22 to 1.09 in FY24) highlight the need for tighter financial discipline. Volatility in raw material prices, dependence on global macroeconomic trends, exposure to import competition, and geopolitical uncertainties may continue to weigh on near-term profitability," the brokerage said.
Despite having a cautious stance, Bajaj Broking said that the outlook remains stable with mediumterm performance likely to depend on improved cash flow management, sustained demand from infrastructure sectors, and mitigation of external risks.
Deven Choksey however assigned a 'Subscribe' rating for listing gains. The research firm said that Scoda Tubes appears to be attractively priced, when compared to its peers. “It is recommended to review the position for long-term holding (if allotted),” it added.
Anchor Book:
The Ahmedabad-based company on May 27 said it has finalised allocation of 47.14 lakh equity shares to anchor investors at a price of Rs 140 per share.
Malabar India Fund invested the maximum amount amongst six investors in the anchor book, acquiring nearly Rs 30 crore worth shares, followed by MNCL Capital Compounder Fund which bought nearly Rs 16 crore worth shares.
Aarth AIF Growth Fund, IMAP India Capital Investment Trust, Chhatisgarh Investments, and Swyom India Alpha Fund were other investors in the company via anchor book.
Scoda Tubes intends to utilise IPO proceeds for expanding production capacity of seamless and welded tubes and pipes, and working capital requirements.
Monarch Networth Capital is acting as the merchant banker for Scoda Tubes IPO.
Also read: IPO News Live Updates
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