Standard Glass Lining Technology IPO listing: Standard Glass Lining Technology shares made a strong debut on Monday, January 13, listing at ₹172 on NSE, a premium of 22.8 per cent over the issue price of ₹140. Meanwhile, on BSE, it was listed at ₹176, up 25.71 per cent.
Standard Glass Lining's initial public offering (IPO), valued at ₹410 crore, was open for subscription from January 6 to January 8. The IPO price band was fixed at ₹133-140 per equity share.
Following the three days of bidding, Standard Glass Lining IPO closed with exemplary demand, garnering 185.48 times bids. The IPO received bids for 380.27 crore shares against 2.05 crore shares on offer. The retail investor segment was booked 65.71 times, while the non-institutional investors (NII) category was subscribed 275.21 times. Meanwhile, the Qualified Institutional Buyers quota was bid 327.76 times on the 3 days of bidding.
Standard Glass Lining IPO was a book-built issue of ₹410.05 crore. The issue was a combination of a fresh issue of 1.50 crore shares, aggregating to ₹210 crore and an offer for sale of 1.43 crore shares aggregating to ₹200.05 crore. Retail investors could apply with a minimum lot size of 107 shares, requiring a minimum investment of ₹14,980.
Standard Glass Lining IPO raised ₹123 crore from anchor investors ahead of the IPO on January 3, 2024.
The company plans to utilise the net proceeds from its fundraising initiative to achieve multiple strategic objectives. A portion of the funds will be allocated towards meeting its capital expenditure needs, specifically for the acquisition of machinery and equipment to enhance operational efficiency. Additionally, the proceeds will be directed toward repaying or prepaying, either partially or fully, certain outstanding borrowings. This repayment strategy extends to the company's wholly owned subsidiary, S2 Engineering Industry Private Limited, enabling it to settle its financial liabilities with banks and financial institutions.
Moreover, the company intends to invest in S2 Engineering Industry Private Limited to support its capital expenditure requirements, particularly for purchasing machinery and equipment, fostering growth and innovation. A significant focus will also be placed on funding inorganic growth through strategic investments and acquisitions to expand its business footprint. The remaining proceeds will be utilised for general corporate purposes, ensuring overall organizational growth and financial stability.
IIFL Securities and Motilal Oswal Investment Advisors were the book-running lead managers of the Standard Glass Lining IPO, while Kfin Technologies Limited is the registrar for the issue.
SBI Securities has recommended subscribing to the issue with a long-term investment perspective, citing the company’s strong growth potential. It expects revenue to grow at a compound annual growth rate (CAGR) of 20 to 25 percent in the medium term, driven by geographical and product diversification. Additionally, the company aims to derive 20 percent of its revenue from exports by 2026, a significant leap from the current 0.5 percent. Compared to its peers, the issue is deemed fairly valued, supported by its superior margin profile.
Geojit has also assigned a 'Subscribe' rating to the issue, noting that at the upper price band of ₹140, Standard Glass Lining is priced at a P/E ratio of 38.5 times on an FY25 annualized basis. This valuation is considered reasonable when compared to industry peers. The brokerage highlighted the growing demand for glass-lined equipment in the pharmaceutical and chemical sectors as a key growth driver. It also pointed to the company's healthy margins, steady revenue growth, promising outlook, and diversified product portfolio, which emphasizes customization. Further, its plans for inorganic growth bolster the recommendation for medium to long-term investment.
Established in September 2012, Standard Glass Lining Technology Limited specialises in manufacturing engineering equipment tailored for the pharmaceutical and chemical industries in India. The company boasts comprehensive in-house capabilities, managing the entire production process from start to finish. Standard Glass Lining Technology Limited offers turnkey solutions to its clients, encompassing design, engineering, manufacturing, assembly, installation, and the development of standard operating procedures. These services cater specifically to the needs of pharmaceutical and chemical manufacturers, ensuring seamless integration and operational efficiency.
Financially, the company has demonstrated robust growth, with revenue increasing by 10 percent and profit after tax (PAT) rising by 12 percent between the fiscal years ending March 31, 2024, and March 31, 2023. This performance highlights its strong market presence and operational efficiency.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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