Scoda Tubes IPO subscribed 5.5 times on Day 2, GMP rises to 13%. Check details

After sailing through on the first day of the bidding process, the initial public offering (IPO) of Scoda Tubes has garnered a total subscription of 5.54 times so far on the second day.

The oversubscription was primarily driven by non-institutional investors (NIIs), who had subscribed to the issue by 14.4 times. This was followed by the retail investors, who made a subscription of 3.90 times and the qualified institutional buyers (QIBs), who subscribed to the issue by 1.7 times.

Here are the other details you need to know about Scoda Tubes IPO:

1. Scoda Tubes GMP: Scoda Tubes shares are trading at a premium of Rs 19–21 in the unlisted market, reflecting a grey market premium (GMP) of 13.6%.
2. Scoda Tubes IPO key dates: The issue opened on May 28 and will close on May 30, with the allotment expected to be finalized by June 2. The stock is likely to list on the exchanges on June 4.
   
   
3. Scoda Tubes IPO details: Scoda Tubes, incorporated in 2008, is engaged in the manufacturing of stainless-steel seamless and welded tubes, catering to core sectors such as oil & gas, chemicals, power, railways, and pharmaceuticals.

The company operates from Mehsana, Gujarat, with backward integration via a hot piercing mill, and has established a growing export footprint spanning 11 countries. Notably, exports contributed over 28% of total revenue in the first nine months of FY25.

Scoda Tubes is looking to raise Rs 220 crore through a 100% fresh issue of shares, with the price band set between Rs 130 and Rs 140 per share. The offering comprises 1.57 crore to 1.69 crore equity shares and the stock will be listed on both the NSE and BSE.

1. Scoda Tubes financial performance: Financially, Scoda Tubes has demonstrated strong growth over the past two years. Its revenue nearly doubled from Rs 194 crore in FY22 to Rs 400 crore in FY24, while profit after tax surged from Rs 1.63 crore to Rs 18.3 crore during the same period. The company also reported a significant improvement in operating performance, with EBITDA margin rising from 5.15% in FY22 to 14.7% in FY24, and return on equity (RoE) climbing to 28.77%.

However, the company’s cash flow efficiency remains a point of concern. Despite the sharp increase in revenue and profitability, cash generated from operations in FY24 stood at only Rs 2.26 crore.Also read: The Leela IPO allotment to be finalised today: How to check status, GMP and listing detailsShould you subscribe Scoda Tubes IPO?
Brokerage firm Canara Bank Securities has recommended a “SUBSCRIBE” rating for long-term investors. It noted that the company’s technical expertise, rising export share, asset-backed expansion, and sector tailwinds position it well for scalable growth. While the IPO is priced at a P/E of 30.43x and a P/B of 8.76x — broadly in line with industry peers — investors should be mindful of cash flow concerns and customer concentration risks.

Analysts at Anand Rathi stated they believe that the company’s key differentiator is its manufacturing process of its crucial raw material which enables backward integration, enabling Scoda Tubes to exercise greater control over production costs, reduce dependence on third-party suppliers, and improve overall operational efficiency.

As the issue is fully priced, they gave a “Subscribe for long term” rating for the issue.

In summary, investors with a long-term view looking to tap into India’s industrial and export manufacturing story may consider subscribing to Scoda Tubes IPO.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)