Scoda Tubes IPO: Issue fully subscribed on day 1; GMP takes a hit

The initial public offering (IPO) of Scoda Tubes saw a strong demand from investors during the first day of the bidding process, majorly from individual bidders as the issue was fully-booked in the last first three hours. The issue, which kicked off on Wednesday, May 28, shall close for bidding on Friday, May 30.

Scoda Tubes is selling its shares in the price band of Rs 130-140 apiece. Investors can apply for a minimum of 100 shares and its multiples thereafter. It is looking to raise Rs 220 crore via IPO, which is entirely a fresh share sale of up to 1,57,14,286 equity shares.

According to the data, the investors made bids for 1,79,68,000 equity shares, or 1.52 times, compared to the 1,18,46,169 equity shares offered for the subscription by 2.35 pm on Wednesday, May 28, 2025. The bidding for the issue shall continue for three-days.

The allocation for non-institutional investors (NIIs) was subscribed 1.66 times, while the portion reserved for retail investors saw a subscription of 1.54 times. However, the quota set aside for qualified institutional bidders (QIBs) was booked 1.38 times as of the same time.

Incorporated in 2008, Ahmedabad-based Scoda Tubes is a manufacturer of stainless-steel tubes and pipes. Its products are broadly categorized into two types- seamless tubes/pipes and welded tubes/pipes. It markets its products under the brand name 'Scoda Tubes.' It has its manufacturing facility on Ahmedabad-Mehsana highway in Rajpur.

The grey market premium (GMP) of Scoda Tubes has taken a hit amid the volatile broader markets and muted bidding for the ongoing issues. Last heard, the company was commanding a premium of Rs 18 per share in the unofficial market, suggesting a 13 per cent listing gains for the investors. The GMP stood at Rs 22 a day ago.

Scoda Tubes raised Rs 66 crore from six anchor investors as it allocated 47.14 lakh equity shares at a price of Rs 140 apiece. For the nine months ended on December 31, 2024, Scoda Tubes reported a net profit of Rs 24.91 crore with a revenue of Rs 363.48 crore. It clocked a net profit of Rs 19.30 crore with a revenue of Rs 402.49 crore for the financial year ended on March 31, 2024.
 

Scoda Tubes strengths lie in its focused stainless-steel product range, extensive quality control, backward-integrated production, and strong customer relationships. Management’s expertise and long standing client ties support Scoda’s market positioning and expansion plans. The business operates on a purchase-order basis without long-term contracts, ensuring flexibility, said Ventura Securities.

"However, risks include reliance on key stockists for domestic and international sales and potential market fluctuations. Scoda’s forward-looking statements, highlighted in its Red Herring Prospectus, should be reviewed alongside its risk factors for a comprehensive investment assessment," it added with a 'subscribe' rating.

Scoda Tubes has reserved 50 per cent of shares for the qualified institutional bidders (QIBs), while non-institutional investors (NIis) will have 15 per cent of the allocation in the issue. Retail investors will have 35 per cent of the quota reserved in this IPO. The company shall command a total market capitalization close to Rs 840 crore.
 

"We recommend subscribing to subscribe this IPO as the issue appears reasonably priced. The company’s financials are growing with a healthy operating margin. It caters to diverse enduse industries such as oil and gas, chemicals, power, pharmaceuticals, automotive, railways, and transportation," said Kunvarji Wealth Solutions.

Monarch Networth Capital is the sole book-running lead manager of the Scoda Tubes IPO, while MUFG Intime India (Link Intime) is the registrar for the issue. Basis of allotment shall be finalized on Monday, June 02. Shares of the company shall be listed on both NSE and BSE with Wednesday, June 4 as the tentative date of listing.