| Price | Lot Size | Issue Date | Issue Size |
|---|---|---|---|
| ₹ 130 to ₹ 140 | 100 | 28th May, 2025 – 30th Fri, 2025 | ₹220.00 Cr |
Scoda Tubes Limited IPO
Scoda Tubes Limited (STL) engages in the business of manufacturing stainless steel tubes and pipes in India with over 14 years of operational experience. The company specialises in the production of both seamless and welded stainless steel tubes and pipes, catering to diverse industrial applications. Its product portfolio is categorised into two main types:
- Seamless tubes and pipes: Manufactured using solid round steel bars without any seam.
- Welded tubes and pipes: Produced by welding flat steel strips into circular forms
These products are used across a broad spectrum of industries, including oil and gas, chemicals, fertilisers, power, pharmaceuticals, automotive, railways, and transportation, serving engineering and EPC companies. A key strength of the company is its backward integration through an in-house hot piercing mill with a production capacity of 20,000 MT per annum, which allows it to manufacture mother hollows, which is the principal raw material for seamless products, leading to better cost control and reduced dependence on external suppliers. Surplus mother hollows are sold in the open market, contributing to revenue diversification. Scoda also earns income through job work services such as annealing, straightening, pickling, and marking. Its manufacturing facility is located on the Ahmedabad-Mehsana Highway in Gujarat, offering logistical advantages due to its proximity to Mundra Port (360 km) and the Inland Container Depot (23 km). As of December 31, 2024, the facility spans 21,199 sq. meters with annual capacities of 20,000 MT for mother hollows, 10,068 MT for seamless products, and 1,020 MT for welded products. The plant is equipped with a wide array of specialised machinery, including pilger mills, cold drawing lines, annealing furnaces, testing equipment, and TIG/MIG welded tube mills. The company’s key raw materials include stainless steel round bars for seamless tubes and stainless steel coils for welded products. The company sells its product both in the domestic market (72.0%) and international market (28.0%). Revenue breakdown of the company is as follows: seamless product (85.0%), welded products (0.6%), and others which include the sale of mother hollow and scrap (13.3%).
Objective of the Scoda Tubes Limited IPO
The company proposes to utilize net proceeds towards funding the following objects:
- Capital expenditure towards expanding production capacity of seamless and welded tubes and pipes;
- Funding part of the incremental working capital requirements of the company;
- General corporate purposes.
Rationale To Scoda Tubes Limited IPO
Niche expertise and global standards driving competitive edge
Scoda Tubes has built a strong competitive moat by focusing exclusively on the stainless steel tubes and pipes segment, allowing the company to develop deep domain expertise in product customisation, quality, and customer preference alignment. This focused approach has enabled Scoda to offer a wide range of specialised products across varied specifications, giving it a unique positioning in domestic and international markets. Additionally, the company’s adherence to globally recognised quality certifications (e.g., ISO 9001, PED EU, AD 2000, DNV) and compliance with standards such as ASTM, ASME, EN, NORSOK, and IBR have facilitated its access to high-entry-barrier export markets, including the US and Europe. These accreditations not only enhance customer trust but also allow Scoda to command a premium for quality and reliability, helping the company establish a resilient and diversified customer base across 16 countries. This varied customer base results in greater revenue diversification and more sustainable operations in the longer term, hedging its business operations from potential sector-specific risks and reducing the market risk of being overly dependent on a single industrial sector or geographical location.
Fully integrated manufacturing with strategic location, enhancing cost and operational efficiency
STL’s fully integrated manufacturing setup, including its in-house hot piercing mill with a 20,000 MT capacity, offers significant operational advantages by ensuring backwards integration for seamless tube production. This in-house capability reduces dependence on external suppliers, provides cost efficiency, and improves control over product quality. The company’s manufacturing facility in Mehsana, Gujarat, is strategically placed near the Mundra Port (360 km) and an Inland Container Depot (23 km), enabling seamless logistics and export operations while reducing freight costs. With eighteen seamless and two welded production lines, Scoda is well-equipped to meet diverse customer needs efficiently. This integration, coupled with a low rejection rate (2.6% in-house, 0.3% customer-side in FY24), underscores its manufacturing precision and enhances profitability. Additionally, the company is doubling its seamless production capacity to ~20,000 MT and significantly expanding its welded capacity through timely land acquisition and a new capex cycle involving 14 new production lines and advanced machinery. The government’s anti-dumping and anti-subsidy duties on Chinese and Vietnamese imports further strengthen the domestic demand outlook, offering volume and margin tailwinds.
Valuation of Scoda Tubes Limited IPO
Scoda Tubes Limited (STL) is a stainless-steel tubes and pipes manufacturer with a growing global footprint and a clear focus on export-driven, capacity-led growth. The company has strategically positioned itself in the higher-margin seamless segment, backed by integrated manufacturing, expanding infrastructure, and industry certifications. Given these strengths, the company is well-positioned to benefit from robust domestic and global tailwinds in the stainless-steel tubes and pipes industry. STL’s consistent capacity expansions, including land acquisitions and machinery additions, will enable it to meet the expected surge in demand, particularly in the seamless segment, which enjoys more substantial margins and quality-led differentiation. Financially, STL has delivered a revenue CAGR of 43.6% between FY22 and FY24, while expanding its EBITDA margin from 5.1% to 14.7%, reflecting operational leverage and better product mix. Though high interest costs remain a concern, PAT margins have improved to 4.6%, and the interest coverage ratio has strengthened from 1.4x to 3.1x. The company continues to exhibit efficient capital use, with ROE at 28.8% and ROCE at 15.9%, positioning it favorably to leverage sectoral growth while maintaining profitability and scale. The issue is valued at a price-to-earnings (P/E) ratio of 17.3x on the upper price band based on FY25 earnings (annualised), which is relatively cheaper compared to its peers. Considering the above compelling factors, we recommend a “SUBSCRIBE” rating for this issue.
What is the Scoda Tubes Limited IPO?
Scoda Tubes Limited IPO is a book built issue of Rs 220.00 crores. The issue is entirely a fresh issue of 220.00 crore shares. Scoda Tubes Limited bidding opened for subscription on May 28, 2025 and will close on May 30, 2025. Scoda Tubes Limited will list on BSE, NSE with tentative listing date fixed as Tuesday, 04, June 2025.
How to apply for the Scoda Tubes Limited IPO through StoxBox?
To apply for the Scoda Tubes Limited IPO through StoxBox one can apply from the website and also from the app. Click here
When will the Scoda Tubes Limited IPO open?
Scoda Tubes Limited IPO is opening on 28th May 2025. Apply Now
What is the lot size of the Scoda Tubes Limited IPO?
The Lot Size of Prostarm Info Systems Limited IPO is 100 equity shares. Login to your account now.
When is the Scoda Tubes Limited allotment date?
The allotment Date for Scoda Tubes Limited IPO is 2nd Jun 2025. Login to your account now.
When is the Scoda Tubes Limited IPO listing date?
The listing Date for Scoda Tubes Limited IPO is 4th Jun 2025. Login to your account now
What is the minimum investment required for the Scoda Tubes Limited IPO?
In the Retail segment the minimum investment required is Rs. 14,000. Login to your account now
What is the maximum investment allowed for the Scoda Tubes Limited IPO?
In the Retail segment the maximum investment requirement is Rs. 196,000. Login to your account now
What are the risks associated with investing in the Scoda Tubes Limited Equipments Limited IPO?
- The company’s revenue is heavily concentrated among its top 10 customers, who contribute approximately 60% of total sales, making it vulnerable to financial and operational risks in the event of reduced purchases or the loss of one or more key clients.
- The company has a high leverage ratio compared to its peers, with a D/E of 3.2x, and future expansion or acquisitions may require additional debt, potentially increasing funding obligations.
- The company relies solely on its manufacturing facility in Mehsana, Gujarat, and any disruption to its operations or the region could adversely impact business performance.
When will the Scoda Tubes Limited IPO shares be credited to my Demat account?
The Scoda Tubes Limited . IPO be credited to the account on allotment date which is 3rd Jun 2025. Login to your account now
Where can I find the Scoda Tubes Limited IPO prospectus?
The prospectus of Scoda Tubes Limited IPO prospectus can be find on the website of SEBI, NSE and BSE
