Stallion India Fluorochemicals Limited is set to launch its Initial Public Offering (IPO) which consists of a fresh offer of Rs. 160.73 crores and an offer for the sale of Rs. 38.72 crore, totalling Rs. 199.45 crores. The IPO is done by companies to raise funds for their various corporate purposes and includes expansion and debt repayment. The offer will be conducted through a book-building process and is scheduled to open on January 16, 2025, and close on January 20, 2025, and is expected to be listed on the bourses dated 23rd January 2025.
Grey Market Premium
The shares of Stallion India’s price in the grey market were trading at 46.67% as of January 17th, 2024. The shares in Grey Market traded at Rs.132. The premium was Rs. 42 on January 17th, 2024 which was 46.67% over the issue price.
Their Objectives of Offer
The objectives include Funding the working capital requirements of the company – Rs. 95 crore, Funding the capital expenditure for Semi-conductor and Specialty Gas debulking and blending facility in Maharashtra – Rs. 29.15 crore, Funding the capital expenditure for Refrigerant debulking and blending facility in Andhra Pradesh – Rs. 21.17 crore and general corporate purposes.
About Stallion India (Overview and Business Model)
Stallion was founded in 2002. They are headquartered in Mumbai. The company specializes in the sale, processing, and blending of refrigerant and industrial gases, with a focus on sectors like air conditioning, pharmaceuticals, automotive, and fire fighting. Stallion India operates four facilities across Maharashtra, Haryana, and Rajasthan while ensuring high-quality storage and processing of gases in a controlled environment.
With over two decades of experience, the company blends gases like R-134a, R-32, and R-410a to create customized formulations. In FY24, the company generated Rs. 233.16 crore in revenue, with 99.96% from gas sales. Key segments include Room A/C which contributed 37.69% and Automobile contributed 15.47%. Their production process involves quality control from unloading gases to pre-filling cans, while ensuring purity and safety. The company’s diverse range of products and safety positions it as one of the trusted providers in the industry.
The Financials & Ratios
The company’s revenue from operations stood at Rs. 233.23 crore in FY24, a 3.42% growth from Rs. 225.50 crore in FY23. Net Profits stood at Rs. 14.78 crore in FY24 which is a 51.62% growth from Rs. 9.75 crore in FY23. In September 2024, the company registered a revenue of Rs. 140.73 crore with a net profit of Rs. 16.56 crore.
The revenue growth was higher than the net profit growth in FY24. The lower growth was due to an increase in higher interest costs as there was an increase in borrowings raised from Banks, overdrafts on fixed deposits and directors. However, for the period ending September 2024, the revenues crossed more than half of FY24, and September 2024’s net profits have outgrown FY24’s profit.
The return on net worth in FY24 stood at 12.54% which has increased from 13.79% from a year ago. Return on Capital Employed declined from 15.80% in FY23 to 13.96% in FY24.
Stallion India vs. Peers
In RHP, the Company has mentioned its listed peers are SRF Limited., Gujarat Fluorochemicals Limited and Navin Fluorine International Limited.
In terms of revenue, SRF holds the highest revenue followed by Gujarat Fluorochemicals, Navin Fluorine, and Stallion India. Navin has the highest EBITDA Margin as of FY24 compared to its peers with Stallion in the lower range. In PAT Margins, Navin outperforms its peers while Stallion has lower margins. The RoE and RoCE of Stallion are near to the higher range among its peers. In debt to equity ratio, Stallion has a higher ratio compared to its peers with Navin having the lowest.
Strengths of the company
● The company benefits from strong market recognition and they are operating with over two decades of industry experience.
● Stallion’s operational efficiency and timely deliveries to improve relationships and contribute to business growth.
● A diverse customer base across high-growth industries to mitigate risks and drive adaptability to market changes.
● The company’s financial performance reflects consistent growth, even through challenging market conditions.
● The experienced management team and skilled board members ensure effective decision-making and strategic business development.
Risks of the company
● Stallion is dependent on Refrigerant Gases sales and restriction to certain geographies could adversely affect the ability to grow or maintain sales. ● The increase in Raw Material cost as a percentage of our revenue from operations could have a material adverse effect on our results of operations and financial condition.
● The company imports its raw materials from China as of September 2024 which is 97.78% which holds material risk and can impact business from demand or supply. ● Stallion requires high capital requirements for their business operations and any delay in receivables can affect the cash flow and expansion plans.
● The customer concentration from the Top 10 customers contributes around 77.32% as of September 2024 and it can affect the company if any customer reduces their order.
Stallion India’s Promoters
The promoters of Stallion India are Shazad Sheriar Rustomji, Manihsa Shazad Rustomji, and Rohan Shazad Rustomji
The Selling Shareholders in this IPO
The selling shareholder in the IPO is Shazad Sheriar Rustomji offering 43,02,656 equity shares to the public.
Stallion India’s Lead Managers
The Book Running lead manager for the IPO is Sarthi Capital Advisors Private Limited. Bigshare Services Private Limited is the Registrar of the offer. They are responsible for managing the entire IPO process which includes pricing, marketing, and ensuring compliance with regulatory requirements.
Written by Santhosh
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