SCODA tube IPO subscribed 53.78 times on the last day; NII quota sees 113x demand
SCODA IPO: On Friday’s final day of bidding, 53.78 subscriptions to the initial public offering (IPO) of stainless steel pipe and pipe manufacturer Scoda Pipes. According to NSE data, the IPO received a bid of 63,70,52,700 shares, while a bid of 1,18,46,169 shares.
The non-institutional investor category saw strong benefits with a 113.03x subscription, while the portion reserved for Qualified Institutional Buyers (QIB) was subscribed 69.51 times. Bidding in the retail individual investor (RII) sector is 19.39 times higher than available stocks.
SCODA IPO Day 2: Subscription Status
BSE data shows that on the second day of the bid on Thursday, May 29, the IPO generally subscribed 8.11 times, receiving a total of 9,61,29,600 bids, with 1,18,46,169 shares received. Qualified Institutional Buyers (QIBS) applied for 65,46,000 shares, offering 33,84,569 shares, while the Retail Individual Investor (RIIS) segment received 6.46 subscriptions, received 3,82,84,100 bids, holding 59,23,100 shares.
SCODA Tube: Anchor Investors and IPO Details
Before the start of stock sales on Tuesday, Scoda Tubes raised Rs 6.6 crore from anchor investors, showing strong confidence in the company.
The IPO price band is set between Rs 130 and Rs 140 per share. Monarch Network Capital has been appointed as the Lead Manager for Book Run (BRLM) for the issue. This is a new equity issue worth Rs 220 crore, which means the company is raising new funds and does not include any stake in compliance with the requirements (OFS).
How to use IPO funds?
The funds raised will be used to expand the production capacity of seamless and welded pipes and pipes, meet working capital needs and pay general company fees.
About Scoda
Founded in 2008, Scoda Tubes produces stainless steel seamless and welded pipes. Their products are used in many industries such as petroleum, chemistry, electricity, railways and pharmaceuticals. The company is headquartered in Mehsana, Gujarat and has its own hot mill as part of its production process. It exports its products to 11 countries, which contributed 28% of its total revenue in the first nine months of the current fiscal year (FY25).
Financially speaking, Scoda Tubes’ revenue has grown a lot, from Rs 19.4 crore in fiscal year 2222 to Rs 4 billion in fiscal year 24. Its after-tax profit increased from Rs 1.66 crore in fiscal 22 to Rs 1.83 crore in fiscal 24. The company’s EBITDA margin shows its operational efficiency, rising from 5.15% in FY22 to 14.7% in FY24. The return on equity (ROE) measuring profitability is 28.77% healthy compared to shareholder investment.
However, the company has some concerns. Despite the profits, its operating cash flow was only Rs 2.26 crore in fiscal year 24. Furthermore, this depends largely on some inventory vendors selling in India and abroad, which is risky. Finally, even though the current level of use remains low, the company plans to expand its welded pipe capacity.
