Welcome to our deep dive into INOX India Limited, a company that might ring a bell like the movie theatres with a similar name. Unlike the cinema INOX, this one is all about making special equipment for extremely cold stuff. Have you ever wondered about things like super chillers and freeze storage?
That’s the world of cryogenic equipment, and INOX India is a big player in making these cool gadgets. In this article, we’re going to break down what cryogenic stuff is, how INOX India does its thing, what it makes, and what the future might hold for them. Let’s explore the frosty world of INOX India Limited.
What is cryogenic equipment?
Before we understand what the company does, let’s understand what cryogen is and what cryogenic equipment means. We might have to take a detour to the chemistry lessons back in our school days. So, Let’s get into it.
When gases are liquified and stored at very low temperatures (below -150°C) it is called cryogenic gases. The equipment used to store and transport these gases is called cryogenic equipment. Some major cryogenic equipment includes tanks, pumps, vaporizers, and valves.
As long as cryogenic gases are kept cool, they stay liquid and can be held at a lower pressure. Very large quantities can be contained in a smaller tank compared to their gaseous form, which requires high-pressure tanks that hold a lower amount of gases by weight. If the temperature of a cryogenic liquid increases through absorbing heat from its surroundings, it turns into gas, increasing the pressure inside the equipment. To prevent this, the equipment has to be properly insulated and be able to sustain certain pressure build-up based on its design.
Now that we have understood what cryogenic equipment is, let’s get into the detailed aspects of the business.
Business overview of INOX India
INOX India is a prominent manufacturer of cryogenic equipment and was one of the leading cryogenic tank manufacturers in the world by revenue in 2021.
It has three manufacturing facilities located at Kalol in Gujarat, the Kandla Special Economic Zone (Kandla SEZ) in Gujarat, and Silvassa in Dadra and Nagar Haveli. The installed capacity of cryogenic tanks is 3,100 Equivalent Tank Units and disposable cylinders were 2.4 million numbers in FY2023.
Moreover, the company has an in-house engineering team to develop new products and solutions. In the past three fiscal years, the in-house team has developed cryogenic containers that comply with ISO container standards, LNG fuel stations, LNG/LCNG fuel stations, LNG fuel tanks, cryogenic biological storage, and beverage kegs.
During the last five years, they have added new products: liquid hydrogen storage tanks, LNG dispensers, LNG fuel tanks, and aluminium trailers.
In India, INOX India Private Limited is the largest supplier of cryogenic equipment with a revenue of Rs. 5,950 million in Fiscal 2021. It has a dominant position in the Indian market, with four times the sales revenue of the second largest player (VRV Asia Pacific) in Fiscal 2021.
Revenue breakup of Inox India
Industrial Gas: This division manufactures, supplies, and instals cryogenic tanks and systems for storage, transportation, and distribution of industrial gases such as green hydrogen, oxygen, nitrogen, argon, carbon dioxide (CO2), and hydrogen and provides after-sales services. This division had a revenue share of 70.88% in Fiscal 2023.
LNG: This division manufactures, supplies, and installs standard and engineered equipment for LNG storage, distribution, and transportation as well as small-scale LNG infrastructure solutions suitable for industrial, marine, and automotive applications.This division had a revenue share of 14.89 % in Fiscal 2023.
Cryo Scientific: This sector manufactures equipment for technology-intensive applications and provides turnkey solutions for scientific and industrial research involving cryogenic distribution.This division had a revenue share of 4.23% in Fiscal 2023.
The company has a history of high customer retention. Almost 50% of the revenue comes from their repeat customers.
Further, in Fiscal 2023, Fiscal 2022, and Fiscal 2021, the company exported the products and delivered services to over 64 countries. 45.83% of revenue from operations came from exports in Fiscal 2023.
Order book
As of March 31, 2023, the order Book of the company stood at ₹10,031.51 million. The following table gives the orders of the three segments of the business.
| Particulars By Division | Outstanding as at March 31, 2023 (in ₹ million) | Percentage of Total Order Book |
| Industrial Gas | 5,017.17 | 50.01% |
| Liquified Natural Gas | 3,582.36 | 35.71% |
| Cryo Scientific | 1,431.98 | 14.28% |
| Total | 10,031.50 | 100.00% |
Future Outlook of the Company
Due to the global focus on reducing carbon emissions, there is an increasing demand for cleaner fuels such as LNG and hydrogen. The company focuses on supplying cryogenic equipment, particularly in LNG and hydrogen that offer attractive market opportunities.
The company focuses on the small-scale LNG segment. In the LNG tank segment, they have supplied over 60% of the tanks in both the stationary and trailer-mounted mobile. LNG tanks in India that have a valid PESO license as of May 4, 2022.
The Engineering team of the company has been developing cryogenic equipment for hydrogen. For example, they were the first Indian company to manufacture a trailer-mounted hydrogen transport tank, which was designed jointly with the Indian Space Research Organisation (ISRO).
The company aims to change the revenue mix towards the large turnkey projects as the company believes this segment has low competition. In FY2023, this segment contributed around 28% of revenue from operations. The company also aims to capture the full value chain across product lines.
What does their financial look like?
| FY21 | FY22 | FY23 | |
| ROE | 25.87% | 25.98% | 27.79% |
| ROCE | 22.25% | 23.92% | 27.79% |
| D/E | 0.16 | 0.09 | 0.00 |
| ROA | 14% | 14.55% | 13.3% |
The company has no debt as on FY23. They also have a good balance sheet with cash of Rs 136.85 million in their books. The IPO was sold on the price band of 627-660 per share. Considering the earnings per share of 16.83 in FY23, the PE is around 37x-39x.
Conclusion
Inox CVA IPO will be listed on BSE, NSE with a tentative listing date fixed as Thursday, December 21, 2023.
Have you invested in the company? Let us know in the comments below.
Written by Nalin Suriya S
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