Standard Glass Lining IPO Latest Subscription & GMP : The IPO of engineering equipment manufacturing company Standard Glass Lining Technology is getting strong response from investors. This IPO has been subscribed more than 31 times so far on its second day. At the same time, its premium in the gray market is also continuously increasing. Brokerage houses are also positive about this IPO. In such a situation, there is hope for a strong listing of this first IPO of the year. This IPO can be subscribed till 8 January 2025. The size of the IPO is Rs 410.05 crore. Whereas the company has fixed the price band for IPO at Rs 133-140 per share.
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SGLTL IPO: Subscription Status
The IPO of Standard Glass Lining Technology is getting excellent response from investors. This IPO has been subscribed 31.17 times till 4 pm on the second day of launch. About 50 percent of this is reserved for Qualified Institutional Buyers (QIB) and it has been filled 4.61 times so far. About 35 percent of this is reserved for retail investors and till now it has been filled 30.58 times. Whereas the remaining 15 percent is reserved for Non-Institutional Investors (NII) and till now it has been filled 66.65 times.
GMP: Premium in gray market 68%
The craze is increasing in the gray market regarding the IPO of Standard Glass Lining Technology. The unlisted stock of the company is trading at a premium of Rs 95 in the gray market. This is a 68 percent premium compared to the upper price band of IPO of Rs 140. GMP indicates that this stock may be listed at Rs 235 as compared to the IPO price of Rs 140.
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10 special reasons behind subscribing
Brokerage house Ventura Securities has advised to subscribe to the IPO of Standard Glass Lining Technology Limited (SGLTL). The brokerage has given some special reasons behind this.
1. Standard Glass Lining Technology Limited (SGLTL) is one of the leading manufacturers of special engineering components for the pharmaceutical and chemical sectors in India, ranking among the top 5 in terms of revenue in FY24.
2. With strong in-house capabilities across the value chain, the company is excelling in design, engineering, manufacturing, assembly, installation and commissioning.
3. SGLTL is a leading player in the production of glass-lined, stainless steel and nickel alloy based equipment, as well asPTFE-lined pipelines and fittings, ranking among the top 3 suppliers in India for these products.
4. The company’s diversified portfolio includes more than 65 products for the pharma and chemical industries, while 15 are under development.
5. SGLTL provides customized solutions for complex, large-scale projects, using alloys with thicknesses ranging from 1 mm to 60 mm.
6. The company’s ability to carry out customized processes ensures that it is in a strong position to serve its end users. Due to which its role as a major supplier in this sector is strengthened.
7. SGLTL operates 8 manufacturing facilities spread over 400,000 square feet in Hyderabad, capable of manufacturing reactors, receivers and storage tanks ranging from 30 liters to 40,000 liters. The company can manufacture 300-350 units per month, which also includes a dedicated facility to manufacture 30 Agitated Nutsche Filter Drier (ANFD) per month.
8. As part of its growth strategy, the company is expanding capacity in the 150 mm thickness segment, targeting industries such as oil & gas, edible oil and heavy engineering, which offers significant growth potential.
9. The company has established long-term relationships with 347 customers, which include leading companies like Aurobindo Pharma, CCL Foods & Beverages and Laurus Labs. The company has achieved repeat business from more than 80% of its top 20 customers over the last few years, contributing to a strong and consistent revenue flow.
10. Through FY 2024, the company continues to leverage these relationships and its reputation for timely, high-quality deliveries to maintain and expand its market position.
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How is the valuation and growth outlook?
Brokerage house SBI Securities has advised to subscribe for the long term in the IPO of Standard Glass Lining Technology. The brokerage says the company is valued at FY2424 P/E and EV/EBITDA multiple of 47.8x/28.6x, based on the upper price band on post-issue capital. The company witnessed strong CAGR growth of 50.5%, 53.1% and 54.5% in its Revenue, EBITDA and PAT between FY22-FY24 to Rs 543.7 crore, Rs 94.9 crore and Rs 60 crore respectively.
The company’s growth outlook is strong, as the company’s revenue is expected to grow between 20-25% in the mid-term with geographical and product expansion. The company is targeting to achieve 20 percent revenue from exports by 2026, whereas currently it is 0.5%. When compared with its nearest competitors, the issue is fairly valued with a better margin profile.
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SGLTL: What is the main risk?
• Raw Material Sourcing List
• Manufacturing facility risk
• Customer specific industry risk
• Challenge of retaining customers
SGLTL: Company’s growth strategy
• Aim to continue expanding and improving the existing product portfolio, as well as entering additional end user industries.
• Capacity expansion by enhancing the capacities of existing manufacturing plants as well as setting up new manufacturing plants.
• Taking advantage of increasing demand from international markets to increase exports.
• Growing organically through strategic acquisitions and alliances.
(Disclaimer: The advice to invest in stocks has been given by the brokerage house. These are not the personal views of Financial Express. There are risks in the market, so take expert opinion before investing.)
