The much-anticipated Standard Glass Lining Technology IPO kicks off today, January 6, 2025. This Hyderabad-based company, specializing in manufacturing engineering equipment for the pharmaceutical and chemical industries, is offering shares within a price range of Rs 133-140 per share. The IPO aims to raise Rs 410.05 crore, with subscriptions closing on January 8, 2025. If you’re interested in investing, here’s everything you need to know.
About Standard Glass Lining Technology
Founded in September 2012, Standard Glass Lining Technology has become a key player in providing high-quality engineering solutions to the pharmaceutical and chemical sectors. The company offers a range of services, including design, engineering, manufacturing, assembly, installation, and the development of standard operating procedures. They specialize in producing glass-lined materials, stainless steel, and nickel alloy components—vital products for these industries.
Operating out of Hyderabad, Standard Glass has eight manufacturing units and serves both domestic and international markets, meeting growing demand across the chemical and pharmaceutical industries.
Recent Performance:
- For the six months ended September 30, 2024, the company reported a revenue of Rs 312.1 crore and a net profit of Rs 36.27 crore.
- For the full financial year 2024, revenue stood at Rs 549.68 crore, with a net profit of Rs 60.01 crore. This impressive growth showcases their strong market position and potential for future success.
IPO Details and How the Funds Will Be Used
This IPO consists of two parts:
- A fresh issue of Rs 210 crore.
- An offer-for-sale (OFS) of 1,42,89,367 equity shares from existing shareholders and promoters.
The funds raised through the IPO will support several strategic initiatives, such as:
- Capital expenditure to expand operations.
- Repayment of borrowings.
- Investments in wholly-owned subsidiaries.
- Funding inorganic growth opportunities.
- General corporate expenses to fuel broader expansion goals.
These investments will support the company’s growth objectives, including expanding its market share both in India and internationally.
Grey Market Premium and Listing Expectations
Ahead of the IPO launch, Standard Glass Lining shares were trading at a premium in the grey market, with an expected listing gain of Rs 95-100 per share. This translates to a potential 70% upside for investors who participate in the offering. Additionally, the company raised Rs 123 crore from nine institutional investors via its anchor book, allocating shares at Rs 140 per share.
Strong Financial Growth and Attractive Outlook
Over the last few years, Standard Glass Lining Technology has exhibited impressive growth. Its revenue has grown at a compound annual growth rate (CAGR) of around 50%, while its EBITDA and net profit (PAT) have also surged significantly. This strong growth is reflected in their solid return on equity (ROE) of 14.3% and return on capital employed (ROCE) of 17.5% for FY 2024.
The company stands to benefit from several industry trends, including:
- Growing demand for pharmaceutical equipment, supported by government initiatives like the Production Linked Incentive (PLI) scheme.
- The China+1 strategy, where businesses are diversifying their supply chains away from China, presents significant export opportunities for Standard Glass.
Positive Brokerage Recommendations
Leading brokerage firms have been optimistic about the Standard Glass IPO, with many recommending it as an attractive investment opportunity.
- Indsec Research: Recommends subscribing, noting the company’s robust growth and its ability to capitalize on the growing demand for pharmaceutical equipment.
- SBI Securities: Suggests long-term subscription, expecting the company to grow at 20-25% revenue growth over the medium term and significantly increase export revenue by 2026.
- SMIFS: Praises the company’s expansion strategy and diversification of product offerings, making it a strong investment.
- Canara Bank Securities: Highlights the company’s strong order book and projected capacity expansion, advising long-term investors to subscribe.
- Anand Rathi Research: Finds the IPO fairly priced and suggests long-term subscription, given the company’s innovative product range and market leadership.
- Geojit Financial Services: Supports the IPO for long-term investment, backed by positive growth prospects and strategic partnerships.
IPO Allocation and Listing Information
The IPO’s share allocation will be as follows:
- 50% to Qualified Institutional Buyers (QIBs).
- 15% to Non-Institutional Investors (NIIs).
- 35% to Retail Investors.
The shares will be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), with a tentative listing date of January 13, 2025.
Should You Consider Investing in Standard Glass Lining Technology?
With its impressive track record of growth, strong financials, and the opportunity to capitalize on the expanding pharmaceutical and chemical sectors, Standard Glass Lining’s IPO presents an attractive investment opportunity. The company’s strategic expansion plans and market leadership position it well for future success.
If you’re an investor with a long-term horizon, particularly those interested in benefiting from the booming pharmaceutical industry, this IPO is one to consider. Standard Glass Lining is well-poised for continued growth, making it a strong contender for future market success.
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