A Daring Leap Ahead for India’s Steel Industry
India’s IPO market is abuzz with action, and the latest to join the fray making news is Scoda Tubes, a stainless steel pipes and tubes producer from Gujarat. With its Initial Public Offering (IPO) open now, Scoda Tubes is looking not only to raise funds but also breaking a niche in a fast-emerging industrial category.
This IPO is a giant step for the company as it targets increasing production capacity, consolidating domestic and overseas presence, and eventually emerging as a industry leader in steel manufacturing.
Table of Contents
What's in the Scoda Tubes IPO?
Scoda Tubes’ IPO is a new issue, i.e., the total amount raised will be to the company (and not through offer for sale). The company is issuing shares in price band of ₹130 to ₹140 with lot size of 100 shares. Retail investors will have to invest at least ₹14,000 to invest.
The issue will be open for three days and will list on both the NSE and BSE during early June. The overall size of the IPO is ₹220 crore, which will serve as a welcome financial buffer for the company’s growth drives in the future.
Who is Scoda Tubes?
Established in 2008, Scoda Tubes Limited has gradually expanded from a domestic manufacturer to an exporter of stainless steel tubes and pipes. It manufactures a range of seamless and welded tubes and pipes, popularly used in markets like:
- Oil & Gas
- Chemical Processing
- Power Generation
- Pharmaceuticals
- Automotive
- Infrastructure & Railways
The firm’s production plant at Mehsana in the state of Gujarat is an integrated unit, and its products are exported to more than 15 countries including the USA, Germany, and UAE.
Why Scoda Tubes Is Going Public?
Scoda Tubes intends to benefit from the infrastructure boom in India and the increasing global demand for high-quality stainless steel components. The IPO proceeds will be utilized for three primary purposes:
1. Capacity Expansion
The business will invest in upgrading and increasing its existing manufacturing infrastructure. This includes adding new machinery, automating some processes, and improving quality control systems.
2. Working Capital
A portion of the funds raised will be used to enhance the working capital of the company. This will enable Scoda Tubes to deliver large domestic and export orders with reduced lead times.
3. General Corporate Purposes
The balance of funds will be utilized to enhance day-to-day operations, establish brand presence, and invest in technology-driven efficiencies.
Financial Snapshot
Scoda Tubes has shown consistent revenue growth over the last three years. Revenue increased from around ₹195 crore to over ₹400 crore in FY24. Net profits have also seen an upward trend, signaling operational efficiency and demand strength.
Key financial highlights include:
- Revenue FY24: ₹402 crore
- Net Profit FY24: ₹18.3 crore
- Return on Net Worth: 28%
- Earnings Per Share (EPS): ₹4.60
These figures are very healthy for a mid-cap industrial player, particularly one in the capital-intensive manufacturing space.
What Should Investors Keep in Mind?
Though Scoda Tubes presents a good growth story, every investment has its set of risks and considerations:
Pros:
- Strong export business with international certifications
- End-to-end control over manufacturing
- Catching a ride on India’s infrastructure and industrial development
- Stringent profitability
Cons:
- Customer concentration risk (overdependence on a few large buyers)
- Scale-up before optimal utilization
- Global commodity price sensitivity in the industry
For long-term investors, particularly those interested in the materials and industrial space, Scoda Tubes is a moderate-risk, high-upside bet.
Final Take
Scoda Tubes IPO is being offered at a period when India’s manufacturing economy is gaining policy support and international visibility. If you’re an investor seeking a way into India’s steel and infrastructure supply chain, this IPO could be the ticket.
As with any investment in the marketplace, prudence, research, and clarity on your investment horizon are paramount. Scoda Tubes is building its future in steel — and this IPO is the initial hammer blow in forging a larger legacy.