The Rs 1,459.32 crore-initial public offering (IPO) of Inox India saw a strong response from the investors during the second day of the bidding process, particularly by retail and non-institutional investors (NIIs).

According to the data, the investors made bids for 9,44,89,208 equity shares, or 6.10 times, compared to the 1,54,77,670 equity shares offered for the subscription by 3.30 pm on Friday, December 15. The three-day bidding for the issue will conclude on Monday, December 18.

The allocation for retail investors was subscribed 7.35 times, while the portion reserved for non-institutional investors saw a subscription of 11.14 times. However, the quota set aside for qualified institutional bidders (QIBs) attracted bids for merely 16 per cent as of the same time.

Gujarat-based Inox India is selling its shares in the price band of Rs 627-660 apiece with a lot size of 22 shares and its multiples thereafter. The three-day bidding for the IPO will close for bidding on Monday, December 18. The issue is entirely an offer-for-sale of up to 22,110,955 equity shares.

Founded in 1976, Inox India is a leading provider in the supply of cryogenic equipment, with a primary focus on tanks. The company delivers comprehensive solutions for equipment and systems designed to operate in cryogenic conditions, encompassing services such as design, engineering, manufacturing, and installation.
Last heard, Inox India was commanding a grey market premium of Rs 480-490 per share, signaling an upside of 72-75 per cent compared to the upper end of the price band. However, the premium in the unofficial market was about Rs 330 before bidding for the issue opened.
 

At the upper price band, the IPO is reasonably priced at an annualized P/E of 29 times on FY24E , owing to robust growth potential going ahead. Over FY 21-23, the company’s return ratios have been strong as well with ROE in the range of 26-28 per cent and ROCE above 30 per cent, said IndSec Research.

“We believe, Inox India will maintain its growth trajectory owing to increasing adoption of cleaner fuels like LNG and hydrogen fuel leading to higher demand for its cryogenic equipment; healthy order book with strong and increasing execution capabilities; increasing participation in large turnkey projects like ITER to derive better margins,” it added with a ‘subscribe’ tag.

INOX India raised Rs 437.8 crore from several anchor investors as it finalised allocation of 66,33,285 equity shares at a price of Rs 660 apiece. The IPO allocates 50 per cent of the offer to qualified institutional bidders (QIBs), with non-institutional investors receiving 15 per cent, and the remaining 35 per cent allocated to retail investors.
 

Inox India aims to capitalize on the global demand for cryogenic equipment, especially in LNG and hydrogen markets. The company plans involve expanding the product range internationally, including manufacturing stainless-steel containers and distributing cryobiological containers worldwide, said Arihant Capital Markets.

“The company is evaluating new facilities and forming alliances for large projects is part of the strategy. The company aligns with national goals for cleaner fuels in line with the Paris Agreement. The company plans to shift revenue towards large turnkey projects, strengthen system engineering for clean energy transitions. We are recommending ‘subscribe for long term’ rating,” it said.

ICICI Securities and Axis Capital are the book running lead managers for the InoxCVA IPO, with Kfin Technologies serving as the registrar for the issue. Shares of the company are scheduled to be listed on both BSE and NSE on Thursday, December 21

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

Also read: Stock recommendations by market analyst for December 15, 2023: Adani Ports, Bank of Baroda and Hero MotoCorp

Also read: DOMS Industries IPO subscribed 69 times on Day 3 so far; grey market premium rises