Tolins Tyres' Rs 230-crore IPO to open for subscription on September 9

Tolins Tyres IPO

Kerala-based Tolins Tyres has decided to hit Dalal Street with its Rs 230-crore initial public offering (IPO) next week on September 9. The firm will announce price band for the issue in coming couple of days.

The tyre manufacturing company intends to raise Rs 200 crore via fresh issue component and the remaining Rs 30 crore will be mobilised through offer-for-sale (OFS) route. Promoters Kalamparambil Varkey Tolin, and his wife Jerin Tolin, who together hold 83.31 percent stake in the company, will be offloading Rs 15 crore worth shares each via the OFS.

Promoters own 92.64 percent stake in the company including 8.47 percent shareholding of Jose Thomas (the father of Jerin Tolin), and the balance 7.36 percent shares are held by public shareholders.

The offer will close for bidding on September 11, while the anchor book of the issue will be opened for a day on September 6.

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The tyre retreading solutions provider will pay Rs 70 crore (out of the net fresh issue proceeds) towards its debt as its outstanding borrowings was Rs 101.33 crore on consolidated basis as of August 23, 2024.

Further, Rs 75 crore will be utilised for long-term working capital requirements, Rs 46.3 crore will be invested in its wholly-owned subsidiary, Tolin Rubbers, and the remaining fresh issue funds will be used for general corporate purposes.

The company has reserved half of its IPO size for qualified institutional buyers, 35 percent for retail investors, and the remainder 15 percent for non-institutional investors.

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Its major products include two-wheeler, three- wheeler, light commercial vehicle and agricultural tyres, as well as precured tread rubber and other accessories
including bonding gum, tyre flap, and vulcanizing solutions. It also exports products to 40 countries, including the Middle East, East Africa, Jordan, Kenya and Egypt.

Tolins Tyres that competes with listed peers like Indag Rubber, Vamshi Rubber, TVS Srichakra, GRP, and Elgi Rubber Company earned more than 75 percent of business from tread rubber segment, while tyres division contributed the remaining portion of topline.

The company recorded significant growth in net profit at Rs 26 crore for the year ended March 2024, growing more than five-fold over Rs 4.99 crore profit in the previous year despite sharp increase in finance cost, driven by healthy operating numbers and topline.

Revenue during the year gone by was Rs 227.2 crore, increasing by 92.2 percent from Rs 118.2 crore in the previous financial year 2022-23. EBITDA (earnings before interest, tax, depreciation and amortisation) surged nearly 4 times to Rs 46.4 crore in FY24, compared to Rs 12.3 crore in FY23, with margin nearly doubling to 20.4 percent from 10.4 percent during the same period.

Saffron Capital Advisors is acting as the merchant banker to the issue, while Cameo Corporate Services is the registrar to the IPO.