Inox India IPO: Grey market premium at 80%; shares to list on Thursday, December 21

Inox India (InoxCVA), the largest domestic supplier of cryogenic equipment, would make its market debut on Thursday, December 21. Ahead of the stock listing, Inox India was commanding a grey market premium (GMP) of Rs 530, up 88 per cent over the issue price of Rs 660. The Inox India GMP remained firm, as two stock debutants namely DOMS Industries and India Shelter Finance Corporation Ltd delivered up to 77 per cent listing gains in a busy IPO season.

The offer for sale (OFS) was sold in the Rs 627-660 price band from December 14 to December 18 and met with 'subscribe' rating by a host of brokerages including Motilal Oswal Securities, Geojit Financial Services, SBI Securities, DRChoksey FinServ and Ventura Securities.

“Given the positive secondary market environment and ample liquidity along with strong subscription demand, INOX India is expected to see a solid listing premium over and above 75 per cent gain. Despite valuations being fully priced into all near term growth, a solid listing is justified on the back of the company's strategic position in the niche market with global footprint and commitment to innovations which is commanding higher valuation multiple," said Prashanth Tapse , Sr. VP Research, Mehta Equities Ltd.

Tapse recommended allotted short term investors to book profits over and above 75 per cent gain on listing day while he suggested long term investors to stay put, considering healthy long term growth in leading supplier and exporter of cryogenic equipment and solutions.

"For those investors who failed to get allotments in the public offer can accumulate on every dips post listing for decent long term returns,” he said.

Analysts suggested brand equity, a favorable push from the government on reducing emissions, healthy financial performance, strong R&D capabilities and a broad customer base, among major drivers for Inox India. Inox India is a play on a shift towards cleaner fuels and higher investment in electronics/space sectors, analysts said.

Also read: Inox India IPO allotment status: Check application, latest GMP and listing date

Inox India offers end-to-end solutions, covering design, engineering, manufacturing, and installation of cryogenic equipment and systems. It is engaged in manufacturing of cryogenic tanks, beverage kegs, tailor-made technology, equipment, and solutions and overseeing large turnkey projects for diverse industries.

The company has three manufacturing facilities in India with a capacity utilisation of 70 per cent in cryogenic equipment in FY23.

In 2022, the global cryogenic equipment market was valued at $11.5 billion. The global cryogenic equipment demand is expected to grow at a compounded annual growth rate of 6.9 per cent to $16.6 billion by 2028. At the global level, the top nine companies accounted for approximately 35-48 per cent of the cryogenic equipment market in Calendar 2022. Inox India is was among the top 10 cryogenic equipment manufacturers in the world by revenue in 2022, as per a CRISIL report.

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