Standard Glass Lining Technology India Limited is set to launch its Initial Public Offering (IPO) which consists of a fresh offer of Rs. 210 crore and an offer for the sale of Rs. 200.05 crore, totalling Rs. 410.05 crore. 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 6, 2025, and close on January 8, 2025, and is expected to be listed on the bourses dated 13th January 2025.
Grey Market Premium
The shares of Standard Glass Lining Technology price in the grey market were trading at 61.43% as of January 03rd, 2024. The shares in Grey Market traded at Rs.226. The premium was Rs. 86 on January 3rd, 2024 which was 61.43% over the issue price.
Their Objectives of Offer
The objectives include Funding of Capex for the company towards machinery and equipment purchase worth Rs. 10 crore, Repayment of outstanding borrowings of its subsidiaries of Rs. 130 crore, Investment in its wholly owned subsidiary for machinery and equipment purchase worth Rs. 20 crore. The net proceeds will be deployed till FY27 for machinery purchases.
About Standard Glass Lining Technology (Overview and Business Model)
The company is one of India’s top five specialized engineering equipment manufacturers for the pharmaceutical and chemical sectors, with in-house capabilities across the entire value chain. They offer design, engineering, manufacturing, assembly, installation, and turnkey solutions for pharmaceutical and chemical manufacturers.
Their product portfolio includes reaction systems, storage, separation, drying systems, and plant engineering services. They are a leading manufacturer of glass-lined, stainless steel, and nickel alloy-based equipment and also supplies PTFE-lined pipelines and fittings. Their products serve diverse industries which include pharmaceuticals, chemicals, biotechnology,
and food and beverages, with a customer base that includes 30 out of the 80 pharmaceutical and chemical companies in the NSE 500 index. They operate from eight manufacturing facilities in Hyderabad and have a wide sales and distribution network across India and international markets. Their business model focuses on customized engineered solutions, turnkey automated equipment, and strategic partnerships to support industry growth.
The Financials & Ratios
The company’s revenue from operations stood at Rs. 543.66 crore in FY24, a 9.26% growth from Rs. 497.58 crore in FY23. Net Profits stood at Rs. 60.01 crore in FY24 which is an increase of 12.32% from Rs. 53.42 crore.
The improvement in profits was due to higher closing stocks which saw an impact in higher negative value in changes in inventory. However, the other expenses also contained and saw a flat growth year on year.
These operational efficiencies in the longer run can help companies during the industry downturns. However, the PAT saw growth higher than revenue.
The return on net worth in FY24 stood at 20.74% which has increased from 47.56% from a year ago. There was a reduction in the net debt to equity ratio, as their ratio in FY24 stood at 0.19 times improved from 0.49 times in FY23.
Standard Glass Lining Technology vs. Peers
In RHP, the Company has mentioned its peers which are GMM Pfaudler, HLE Glascoat, Thermax, and Praj Industries. In EBITDA margins, the Standard Glass has outperformed its peers by a wide margin. In RoE, the Praj Industries holds the highest returns over its peers and Standard stands near to the higher range of peers return. In PAT Margins, Standard Glass outperforms its peers as well as showing its operational efficiency in FY24.
Strengths of the company
● The company is among India’s top five manufacturers of specialized pharmaceutical and chemical equipment.
● They Offer customized, innovative products across pharmaceutical and chemical manufacturing processes.
● Manufacturing facilities equipped with advanced technology in strategic locations. ● Established long-term relationships with prominent clients across various sectors. ● Demonstrates consistent, profitable growth with a strong financial track record.
Risks of the company
● The company’s Telangana manufacturing facilities face risks from accidents, geographical diversification, disasters, or any political changes.
● Skilled labour availability is critical and a lack of personnel might affect its operations. ● The dependency on limited suppliers for key raw materials might impact production schedules.
● Over 88% of revenue is dependent on the pharmaceuticals and chemicals sector. ● The under-utilization or disruptions in production lines can harm financial performance.
Standard Glass Lining Technology’s Promoters
The promoters of Standard Glass Lining Technology are Nageswara Rao Kandula, Kandula Krishna Veni, Kandula Ramakrishna, Venkata Mohana Rao Katragadda, Kudaravalli Punna Rao and M/s S2 Engineering Services.
The Selling Shareholders in this IPO
The selling shareholders in the IPO include M/s S2 Engineering Services, Kandula Ramakrishna, Kandula Krishna Veni, Nageswara Rao Kandula, Kudaravalli Punna Rao, M/s Standard Holdings, Katragadda Venkata Ramani, Venkata Siva Prasad Katragadda, Krishna Kanth Kudaravalli, Kudaravalli Srikanth, Balabhavani K, Likitha Katragadda, Mahitha Katragadda, Katragadda Harini, Shirish Nilkantharao Dhamnekar.
Standard Glass Lining Technology’s Lead Managers
The lead managers for the IPO are IIFL Capital Services Limited and Motilal Oswal Investment Advisors Limited. Kfin Technologies 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 S
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