Inox India IPO Review: Inox India Limited is coming up with its Initial Public Offering. The IPO will open for subscription on December 14, 2023, and close on December 18, 2023. In this article, we will look at the Inox India IPO Review 2023 and analyze its strengths and weaknesses. Keep reading to find out!
Table of Contents
Inox India IPO – About The Company
Inox India Limited is a supplier of cryogenic equipment that was established in December 1976. It provides complete solutions for equipment and systems that operate under cryogenic conditions, covering design, engineering, manufacturing, and installation.
In addition to cryogenic tanks and equipment, the company offers a diverse range of products and services. These include beverage kegs, customized technology, equipment and solutions, as well as comprehensive turnkey projects.
The range of products and services provided by Inox India Limited caters to a wide array of industries. These industries include industrial gases, liquefied natural gas (“LNG”), green hydrogen, energy, steel, medical and healthcare, chemicals and fertilizers, aviation and aerospace, pharmaceuticals, and construction.
Business Segmentation
The company’s business comprises three divisions. Following are the divisions and the activities conducted by the company under each division:
- Industrial Gas: Under this division, the company produces, supplies and installs cryogenic tanks and systems for storage, transportation and distribution of industrial gases such as green hydrogen, nitrogen, argon, oxygen, carbon dioxide (CO2), hydrogen and provides after-sales services.
- LNG: Under this division, the company produces, supplies and installs standard and engineered equipment for LNG storage, distribution and transportation as well as small-scale LNG infrastructure solutions suitable for marine, industrial, and automotive applications.
- Cryo Scientific: Under this division, the company provides equipment for technology-intensive applications and turnkey solutions for industrial and scientific research involving cryogenic distribution.
Major customers of the company
The following images will show you the major customer base of INOX India Limited across its three business divisions:
Inox India IPO Review – About The Industry
According to a CRISIL Report, the Indian market for cryogenic equipment was estimated to be worth $353 billion in the year 2022. The demand for such equipment in the country has been growing at a steady Compound Annual Growth Rate (CAGR) of 6.8% between 2017 and 2019.
Going forward, the demand for cryogenic equipment in India is expected to increase at a CAGR of 7.2% between the years 2023 and 2028.
This growth is anticipated to be propelled by an increase in industrial output, investments in the electronics and space sectors, and a shift towards cleaner fuel sources like hydrogen and LNG in the industrial and transportation sectors.
Inox India IPO Review – Financial Highlights
If we look at the financials of Inox India Limited we find out that their assets have grown from Rs.687.20 crores in March 2021 to Rs.1,155.81 crores in September 2023.
Their revenues also follow a similar trend, it has grown from Rs.608.99 crores in March 2021 to Rs.984.20 crores in March 2023. Their profits have grown from Rs.96.11 crores in March 2021 to Rs.152.71 crores in March 2023. This means the company has retained a margin of 16.87% of its revenue.
As of Q2FY24, the company has reported a six-month total revenue of Rs.580.00 crores and a net profit of Rs. 103.34 crores.
During the year, the company has reported an ROE of 22.57% and an ROCE of 17.38%. This suggests that the company has given good returns to the shareholders’ capital and has efficiently utilized the company resources
Key Players in the Market
There are no listed companies in India engaging in a business similar to that of the subject company. Furthermore, there are no Indian or global listed peers of comparable size, operating in the same industry, and with a similar business model as the company.
Strengths of the Company
- As of FY23, the company is the largest supplier of cryogenic equipment in India in terms of revenues. Furthermore, the company has also become the largest exporter of cryogenic tanks from India in terms of revenue in FY23.
- The company has developed and commercialized products and services spanning the entire cryogenic value chain in industrial gases, LNG liquefaction plants and liquid hydrogen
- The company has a diversified customer base across industry sectors and geographies. As of FY23, the has provided its equipment and systems to over 1,201 domestic customers and over 228 international customers.
- The company has an in-house engineering team to develop new products and solutions. This allows them to develop products and systems that are according to the needs of particular customers.
- The company believes its promoters, management, and dedicated team offer a strong competitive advantage for growth in current and new markets.
Weaknesses of the Company
- The company derives 11.56% and 46.52% of its revenue from its largest customer and top 10 customers, respectively, as of FY23. Reduction or cancellation of orders from any of these customers can have a significant impact on the business.
- Any increase in the raw material cost or other input costs may adversely affect the pricing and supply of the company’s product having an adverse effect on the business.
- The company is exposed to geographical and regulatory risks from the facilities located in Gujarat and the Union Territory of Dadra and Nagar Haveli.
- Exports constitute a major portion of the company’s revenue (45.83% as of FY23). Any slowdown in exports due to tariffs, trade barriers and international sanctions could adversely affect the business.
- The company relies on several suppliers for key components, materials and stock-in-trade as well as customer support services including product repairs and returns. If any of these suppliers are unable to deliver their services, it could have an adverse effect on the business.
Inox India IPO Review – GMP
The shares of Inox India Limited traded at a premium of 36.36% in the grey market on December 11th, 2023. The shares tarded at Rs 900. This gives it a premium of Rs 240 per share over the cap price of Rs 660.
Key IPO Information
| Particulars | Details |
|---|---|
| IPO Size | ₹1,459.32 Cr |
| Fresh Issue | - |
| Offer for Sale (OFS) | ₹1,459.32 Cr |
| Opening date | December 14, 2023 |
| Closing date | December 18, 2023 |
| Face Value | ₹2 per share |
| Price Band | ₹627 to ₹660 per share |
| Lot Size | 22 Shares |
| Minimum Lot Size | 1 |
| Maximum Lot Size | 13 (286 shares) |
| Listing Date | December 21, 2023 |
Promoters: Pavan Kumar Jain, Nayantara Jain, Siddharth Jain and Ishita Jain
Book Running Lead Manager: ICICI Securities Limited and Axis Capital Limited
Registrar to the Offer: KFin Technologies Limited
The Objective of the Issue
As the entire issue is through an offer for sale, the company will not receive any proceeds from the IPO
In Closing
In this article, we looked at the details of Inox India IPO Review 2023. Given that the company is going to be the first listed player in the industry and also add to it, its strong presence in the national and international market, the company’s outlook appears favourable for the future.
What do think the future holds for the company? Are you applying for the IPO? Let us know in the comments below.
Written by Aaron Vas
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