The initial public offering (IPO) of Scoda Tubes, which opened for subscription today, May 28, saw strong investor interest on its first day. As of 4:57 pm, the IPO received bids for 2.44 crore shares against 1.18 crore shares offered, resulting in an overall subscription of 2.06 times.
Qualified Institutional Buyers bid for 47.38 lakh shares against 33.85 lakh shares offered (1.4x), Non-Institutional Investors bid for 72.61 lakh shares against 25.38 lakh shares offered (2.86x), and Retail Individual Investors bid for 1.24 crore shares against 59.23 lakh shares offered (2.09x).
Scoda Tubes IPO details
The stainless steel tubes and pipes manufacturer aims to raise Rs 220 crore entirely through a fresh issue of shares, priced in the band of Rs 130 to Rs 140 per share. Scoda Tubes is offering between 1.57 crore and 1.69 crore shares, with listings planned on both the NSE and BSE.
Retail investors can bid for a minimum of one lot of 100 shares, amounting to Rs 14,000 at the upper price band. The allotment is expected to be finalised by June 2, with the stock debuting on exchanges on June 4.
Scoda Tubes: Should you subscribe? Here’s what analysts say
SBI Securities holds a positive outlook, highlighting the company’s strong financial performance. At the upper end of the price band, Scoda Tubes is valued at a P/E of 21.8x and EV/EBITDA of 9.6x, based on annualised 9MFY25 results. The brokerage recommends investors subscribe at the cut-off price.
Vaqarjaved Khan of Angel One describes the IPO as a “decent opportunity for investors looking to play the infrastructure and industrial growth story in India,” while advising caution on competitive pressures and cash flow monitoring.
Bajaj Broking takes a neutral stance, pointing to challenges such as working capital constraints, margin pressures, and broader market risks. According to their analysts, the medium-term performance will depend on improved cash flow management and sustained infrastructure demand.
Scoda Tubes: Company background and financials
Founded in 2008, Scoda Tubes manufactures stainless-steel seamless and welded tubes, supplied to industries in oil & gas, chemicals, power, railways, and pharmaceuticals. From its operations in Mehsana, Gujarat, it has backward integration through a hot-piercing mill and exports to 11 countries. Export accounts for about 28 percent of total revenue in 9MFY25.
The revenue of the company shot up from Rs 194 crore in FY22 to Rs 400 crore in FY24. Profit after tax stood at Rs 18.3 crore as compared to Rs 1.63 crore in FY22. Meanwhile, EBITDA margins witnessed an improvement, rising from 5.15 per cent in FY22 to 14.7 per cent in FY24. Also worthy of note was an RoE of 28.77 per cent.
Cash flow efficiency remains a matter of concern with operating cash flow being only Rs 2.26 crore in FY24 notwithstanding the profits. Also, the company faces concentration risk because of the dependence on few stockists for sales domestically and internationally. Planned capacity expansion of welded pipes comes at a time when utilisation levels are low.
