Standard Glass Lining Technology IPO to open on January 6: Check Details
Standard Glass Lining Technology IPO
Standard Glass Lining IPO: Price Band Fixed, All the Details You Need Before Investing
The IPO of Standard Glass Lining Technology, one of the leading manufacturers of specialized equipment for the pharmaceutical and chemical sectors, is all set to hit the markets soon.
With a total value of ₹410.05 crore, this IPO offers a significant opportunity for investors looking to invest in a company with a strong track record of growth.
If you’re considering participating in the IPO, here’s an expanded overview of the key details, the company’s financial health, and the best way to approach the investment.
Key Details of the Standard Glass Lining IPO
- IPO Size: ₹410.05 crore
- Price Band: ₹133 to ₹140 per share
- Lot Size: 107 shares
- IPO Opening Date: January 6, 2024
- IPO Closing Date: January 8, 2024
- Anchor Investor Bidding: January 3, 2024
- Listing Date: January 13, 2024 (BSE and NSE)
- Registrar: KFin Technologies
- Issue Type: The IPO comprises a fresh issue of ₹210 crore, alongside an Offer for Sale (OFS) of 1,42,89,367 shares, each with a face value of ₹10.
The price band of ₹133 to ₹140 has been fixed for the IPO, and the shares will be available in lots of 107 shares. If you’re planning to invest, you’ll need to calculate the total investment amount based on the price band and lot size.
The issue is set to open for subscription on January 6, 2024, and will close on January 8, 2024.
Anchor investors, who are institutional investors, will get the first opportunity to bid starting from January 3, 2024.
IPO Allocation Breakdown
The Standard Glass Lining IPO is structured to cater to various categories of investors, ensuring fair participation from institutional and retail investors. Here’s how the shares are allocated:
- Qualified Institutional Buyers (QIBs): 50% of the total offer
- Non-Institutional Investors (NIIs): 15%
- Retail Investors: 35%
QIBs, which include mutual funds, insurance companies, and pension funds, have the largest portion of the issue reserved for them, reflecting the institutional confidence in the company.
A substantial portion of 35% has been reserved for retail investors, ensuring that smaller investors also have an opportunity to participate in the offer.
Non-Institutional Investors (NIIs), such as high-net-worth individuals, can apply for the remaining 15%.
Use of IPO Proceeds
The funds raised through this IPO will be used strategically to support the company’s growth and strengthen its financial position:
- ₹100 crore will be used to purchase new machinery and equipment for expanding manufacturing capabilities.
- ₹130 crore will be used to reduce debt, including liabilities at the company’s subsidiary S2 Engineering.
- ₹300 crore will be allocated to S2 Engineering for capital expenditure, which will help fund its growth and expansion plans.
- ₹200 crore will be directed towards inorganic growth, such as potential acquisitions or strategic investments to strengthen the company’s market position.
- The remaining funds will be used for general corporate purposes, ensuring the company has enough flexibility to pursue additional growth opportunities or meet operational needs.
Gray Market Activity
At the time of writing, there is no significant activity in the gray market regarding the shares of Standard Glass Lining.
The gray market is often a place where unofficial share trading occurs before the official listing, and it can provide some signals about the demand for shares.
However, it’s important to remember that gray market premiums are often volatile and should not be relied upon as a primary source for investment decisions.
Experts recommend focusing on the company’s fundamentals, such as financial health, growth potential, and the use of IPO proceeds, to make an informed investment decision.
Company Overview: A Leader in Pharmaceutical and Chemical Equipment Manufacturing
Standard Glass Lining Technology, established in September 2012, is a prominent player in the pharma and chemical industries, manufacturing specialized engineering equipment.
The company focuses on providing a comprehensive suite of services, including design, engineering, manufacturing, assembly, and installation of critical industrial equipment used in the production processes of pharmaceutical and chemical companies.
Additionally, they provide standard operating procedures (SOPs) for their clients, ensuring efficient and safe operations.
The company’s clientele includes several major players in the pharmaceutical industry, such as Aurobindo Pharma, Natco Pharma, Piramal Pharma, and Suven Pharma.
These companies represent a broad spectrum of the pharmaceutical sector, from generic medicines to specialized pharmaceutical formulations.
With its eight manufacturing units based in Hyderabad, Telangana, Standard Glass Lining is strategically located to serve key markets in India and internationally.
Strong Financial Performance and Growth
Standard Glass Lining has shown consistent growth since its inception, with its financial performance reflecting strong year-on-year growth. Here’s a breakdown of the company’s performance over the last few years:
- FY 2022: Net Profit of ₹25.15 crore
- FY 2023: Net Profit of ₹53.42 crore
- FY 2024 (estimated): Net Profit of ₹60.01 crore
The company’s revenue growth has been impressive, expanding at a compound annual growth rate (CAGR) of over 50%, with revenue reaching ₹549.68 crore in FY 2024.
The company’s ability to generate consistent profit growth and significantly expand its revenue base highlights its robust operational model and strong market demand for its products and services.
In the current financial year (2024-2025), the company has continued its upward trajectory. In the first half of the year (April-September 2024), it reported a net profit of ₹36.27 crore on a revenue of ₹312.1 crore, indicating a solid growth trajectory for the full year.
Investment Considerations
Investing in an IPO can be an exciting opportunity, but it comes with its risks. When evaluating the Standard Glass Lining IPO, it’s crucial to consider several factors:
- Financial Strength: The company has shown consistent revenue and profit growth, driven by a strong client base in the pharmaceutical and chemical industries. The CAGR of over 50% is impressive, reflecting both operational efficiency and growing market demand.
- Use of Funds: The planned use of IPO proceeds is aligned with the company’s long-term growth strategy, focusing on debt reduction, expanding production capacity, and pursuing inorganic growth opportunities.
- Industry Prospects: The pharmaceutical and chemical sectors are crucial industries with steady demand for specialized equipment. As the pharma industry continues to grow, especially in generics and contract manufacturing, Standard Glass Lining stands to benefit.
- Risk Factors: While the company has posted strong financial results, potential risks include market competition, raw material price fluctuations, and any economic slowdown that may affect customer spending in the chemical and pharmaceutical sectors.
Final Remarks
The Standard Glass Lining IPO presents an attractive investment opportunity for retail investors, especially those looking for exposure to the growing pharmaceutical and chemical industries.
With a solid track record of growth, strong financial performance, and strategic use of funds, the company is well-positioned for future expansion.
However, as with any investment, it’s essential to evaluate the risks involved and consider your own financial goals.
It’s advisable to consult a financial advisor before making any investment decisions to ensure that the IPO fits within your investment strategy.
