InoxCVA IPO: The IPO of InoxCVA, India's largest domestic manufacturer of cryogenic storage tanks, will close on Monday, December 18. The IPO opened for public subscription on Thursday, December 14th. Till 10:37 am on the last day of an offering on Monday, the Rs 1,459.32-crore IPO attracted 8.87 times subscription and received bids for 13,73,10,272 shares against 1,54,77,670 shares on offer.
The category meant for non-institutional investors received 19.21 times subscriptions while the quota for retail investors (RIIs) received 9.17 times subscriptions. The Qualified Institutional Buyers category received 0.59 subscriptions.
The price range has been set at Rs 627 to Rs 660 per share.
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The allotment for the IPO is expected to take place on Tuesday, December 19. The listing on the stock exchanges will take place on December 21st.
InoxCVA IPO GMP today
According to market observers, unlisted shares of Inox India are trading Rs 555 higher in the gray market compared to the issue price. The gray market premium or GMP of Rs 555 means that the gray market expects a listing gain of 84.09 per cent from the public issue. The GMP is based on market sentiment and is constantly changing.
“Gray market premium” indicates investors’ willingness to pay more than the issue price.
InoxCVA IPO: Should you register?
Brokerage firm Anand Rathi rated the IPO as a “Long Term Subscribe” and said in its note, “At the upper price band, Inox India Ltd values a P/E (price-to-equity) ratio of 39.2x with a market capitalization of ₹ 5,990.1 crore Rupees after issue of shares and return on net assets of 27.79 per cent in FY23. As far as valuation is concerned, we believe the company is fairly priced. We therefore recommend a “Subscribe–Long Term” rating for the IPO.”
The brokerage firm also said that Inox India Ltd is well positioned to capitalize on this global market growth with its own technology as well as an LNG product range spanning the entire value chain. As of September 2023, the company has an order book of Rs 1,036.6 crore. The “order book” includes expected revenue from the unexecuted portions of existing contracts.
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Details about InoxCVA's IPO
This is Inox Group's first IPO after the issuance of Inox Leisure (its multiplex arm) almost 17 years ago. Inox Leisure is now part of the PVR group.
The minimum lot size for registration is 22 shares. The minimum investment amount required for retail investors is Rs 14,520.
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ICICI Securities Limited and Axis Capital Limited are the underwriters of the Inox CVA IPO while Kfin Technologies Limited is the registrar for the issue.
The Vadodara-based company's founder and director Siddharth Jain told PTI here that the company is valued at Rs 5,990 crore at the upper end of the price range.
The valuation comes at a significant premium to the expected annual revenue of Rs 1,200 crore this fiscal, up from Rs 980 crore in FY23, as the company currently has an order book of Rs 1,100 crore.
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He said that it will only be an offer for sale by the promoter Inox India, which has an equivalent joint venture with US-based Air Products called Inox Air Products, the largest manufacturer of industrial and medical oxygen in the country, will own 25 percent sell his shares in the company.
“The main purpose of the IPO is to make us more visible in global markets. “Although we are the third-largest companies in the world by volume at Chart of the US and the Chinese state-owned company CIMC, we are too small from a sales perspective,” says Parag Kulkarni, an old hand of the group and managing director. said PTI.
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Founded in 1992, the company clocked a turnover of Rs 980 crore in FY23 and posted a net margin of Rs 152 crore. The company is setting up its fourth factory in Savli.
The company has three plants, including its flagship LNG tanker manufacturing facilities and its space program that supplies Isro, CERN and France's Iter at Katol near Vadodara.
Both Jain and Kulkarni expect medium-term growth to come from the LNG tanker business (where the company already has over 60 percent market share and partners with Italy's VRV) as more long-haul commercial fleets convert to LNG as the primary Fuel. Of the 150 LNG tankers on the road, 120 are company owned and 22 of the 27 LNG fueling stations are also company owned.
Up to 48 percent of the Rs 980 billion revenue came from exports and the rest from domestic sales. From a category perspective, almost 71 percent currently comes from industrial gas tanks, 4.2 percent from cryogenic tanks and 25 percent from LNG.
The company will sell up to 22,110,955 shares through the OFS. Promoting shareholders include Siddharth Jain, who will bring together up to 10,437,355 shares, up to 5,000,000 shares each from Siddharth's founder and father, Pavan Kumar Jain, and Nayantara Jain.
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The selling non-promoter shareholders include Ishita Jain (1,200,000 shares), Manju Jain (2,30,000), Lata Rungta (1,90,000), Bharti Shah, Kumud Gangwal, Suman Ajmera and Rajni Mohatta, who have 13,400 shares each will sell.
The company employs almost 400 engineers and 1,200 workers, including 7 and 7 young welders.
Mohammad HarisHaris is Deputy News Editor (Business) at news18.com. He writes on various topics…Read more
first published: December 18, 2023, 10:53 IST
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