Scoda Tubes Ltd, a Gujarat-based manufacturer of stainless steel tubes and pipes, has launched its Initial Public Offering (IPO) in a price range of ₹130-₹140 per share.

The IPO plans to raise ₹220 crore through a fresh offering of equity shares, without an Offer for Sale (OFS).

The cash raised will be used largely to increase manufacturing capacity and meet working capital requirements.

IPO Subscription Status

(Day 3)

As of May 30, 2025, the Scoda Tubes IPO has been subscribed 53.25 times. The subscription information is as follows.

Qualified Institutional Buyers (QIB): 69.51x

Non-institutional investors (NIIs): 112.77x

Retail Individual Investors (RII): 18.45x

This overwhelming demand indicates strong investor confidence and interest in the company.IPO Watch+4Groww+4mint+4

Grey Market Premium (GMP)

The Grey Market Premium (GMP) for Scoda Tubes’ IPO is ₹22, indicating a listing price of around ₹162 per share at the upper end of the price band.

This represents a possible listing gain of around 15.7% for investors who apply at the cut-off price. The GMP has been trending upward, indicating increased investor interest.

Financials & Valuation

Valuation at Upper Price Band: Around ₹840 crore

Price to Earnings (P/E) Ratio: 30.43x (consistent with industry average of 31.96x).

Price to book (P/B) Ratio: 8.76x (somewhat lower than industry average of 9.56x).

ROE: ~13.5%.

ROCE: about 13.5%.

Operating Margins: ~12%

Revenue CAGR (FY22–FY24): 44%

EBITDA CAGR: 143%

Profit After Tax (PAT) CAGR: 235%

These robust financials demonstrate Scoda Tubes’ strong growth trajectory and operational efficiency.

Business Overview

Coda Tubes specializes in the manufacture of seamless and welded stainless steel tubes and pipes.

The company operates a hot piercing mill with a capacity of 20,000 MT per year, allowing for backward integration and cost control.

Its products serve a wide range of industries, including oil and gas, chemicals, fertilizers, power, pharmaceuticals, automotive, rail, and transportation.

The company has a strong export presence, with one-third of its income coming from international markets in 11 countries.

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Risks & Considerations

Despite its great financial performance, investors should consider the following risks:

Cash Flow Efficiency: Questions about the company’s cash flow management.

Distributor Dependency: Relying on major distributors for sales.

Global Market Uncertainty: Exposure to changes in global demand and geopolitical conditions.

Growth Moderation: Growth rates have moderated during the last nine months.

Valuation Concerns: An implied P/E ratio of 35-40 may limit short-term upside.

Investment Recommendation

Given the high subscription demand, good GMP, strong financial performance, and development potential, the Scoda Tubes IPO is an appealing investment option for both short-term listing profits and long-term portfolio diversification.

Investors with a moderate risk tolerance and a focus on industrial manufacturing sectors may want to apply at the cut-off price.