A minimum of 107 shares and their multiples could be purchased for the price range of Rs 133–140 per share, which Standard Glass Lining is selling its shares for in order to raise Rs 410.05 crore.
Subscriptions for Standard Glass Lining Technology’s Rs 410.05 crore initial public offering (IPO) open today, Monday, January 6, 2025. One can apply for a minimum of 107 equity shares and their multiples after that. It is offering its shares for between Rs 133 and Rs 140 each. Bidding for the issue will end on Wednesday, January 8, 2025.
Standard Glass Lining Technology, a Hyderabad-based company founded in September 2012, produces technical equipment for India’s chemical and pharmaceutical industries. A fresh share sale of Rs 210 crore and an offer-for-sale (OFS) of 1,42,89,367 equity shares by Standard Glass’s current shareholders and promoter entities are part of the company’s first public offering (IPO).
The issue’s net proceeds will be used for general company objectives, capital expenditure needs, fully owned subsidiary investments, repayment or payback of outstanding debt, and funding inorganic growth. Last but not least, it was fetching a gray market premium of Rs 95–100 per share, indicating to investors a listing pop of up to 70%.
By assigning 87,86,809 equity shares at a price of Rs 140 each, Standard Glass was able to acquire Rs 123 crore from nine institutional investors through an anchor book prior to its first public offering. ICICI Prudential MF, Tata MF, Motilal Oswal MF, Massachusetts Institute of Technology, Amansa Holdings, Kotak Asset Management Company, Clarus Capital, 3P India Equity Fund, and ITI MF were among the anchor book participants.
For makers of chemicals and pharmaceuticals, Standard Glass offers complete solutions that include design, engineering, manufacturing, assembly, installation, and standard operating procedures. It uses nickel alloy, stainless steel, and glass-lined materials to make specialist engineering equipment. Its eight production facilities are located in Hyderabad.
For the six months ending September 30, 2024, Standard Glass reported a net profit of Rs 36.27 crore on revenue of Rs 312.1 crore. For the fiscal year that concluded on March 31, 2024, the company’s revenue was Rs 60.01 crore, or Rs 549.68 crore. Nearly Rs 2,793 crore will be the company’s total market capitalization.
Fifty percent of Standard Glass Lining Technology’s equity shares have been set aside for qualified institutional bidders (QIBs), with the remaining fifteen percent going to non-institutional investors (NIIs). The remaining 35% of the allotment in the IPO will go to retail investors.
The Standard Glass Lining IPO’s book running lead managers are IIFL Securities and Motilal Oswal Investment Advisors, while the issue’s registrar is Kfin Technologies. The company’s shares will be listed on the BSE and NSE, with the preliminary listing date set for Monday, January 13. The following are the opinions of numerous brokerage firms regarding Standard Glass Lining’s first public offering:
ndsec Research
Rating: Subscribe
The IPO is priced at a 13 percent discount to the industry average, or a post-IPO dilutive FY24 P/E of 47.8 times. According to Indsec Research, the company has had robust growth, with revenue, EBITDA, and PAT CAGRs of 50%, 53%, and 52%, respectively, over FY22–24. It also earned an exceptional ROE of 14.3% and ROCE of 17.5% in FY24.
It is well-positioned to profit from rising worldwide demand brought on by the China+1 strategy and government assistance through the PLI plan. It specializes in fabrication and precision engineering equipment for pharmaceutical and chemical firms. With a’subscribe’ rating, it stated that the pharmaceutical industry’s capital expenditures are anticipated to stay at Rs 12,000-15,000 crore per year until FY27.
SBI Securities
Rating: Subscribe for long term
Based on the upper price band, Standard Glass is valued at EV/Ebitda multiples of 28.6 times and FY24 P/E multiples of 47.8 times. According to SBI Securities, it has shown impressive results, with sales, EBITDA, and PAT increasing at CAGRs of 50.5%, 53.1%, and 54.5% to Rs 543.7 crore, Rs 94.9 crore, and Rs 60 crore, respectively, between FY22 and FY24.
“The growth outlook is strong since, with product and global expansion, revenue is expected to increase by 20–25% over the medium term. By 2026, the corporation wants to increase its export revenue by 20% from the current 0.5%. With a “subscribe for long-term” tag, it stated that the issue is fairly valued and has a higher margin profile when compared to its close rivals.
SMIFS
Rating: Subscribe
Standard Glass Lining has laid up a thorough growth plan aimed at expanding its global footprint, improving its manufacturing skills, and broadening its range of products. According to SMIFS, it is using its engineering know-how to create unique products and diversifying its line of business to target more end-user sectors.
“We recommend subscribe to the issue as the company increases its manufacturing capacity to address growing demand, expansion into the export market and strategic partnerships which will increase its market share as in the past and production of new differentiated products separates the company from its peers,” it stated.
Canara Bank Securities
Rating: Subscribe
With a strong order book around Rs 450 crore, Standard Glass Lining places a strong emphasis on operational effectiveness and automation. According to Canara Bank Securities, it plans to use proprietary technology from its Japanese partner AGI, which is well-known for high-margin products, to contribute 20% of export revenues in the upcoming fiscal year.
In comparison to the industry average of 52.50 times, the company’s current P/E ratio of 39.77 times is favorable. Its RoE of 20.74 times is strong. With a’subscribe’ rating for the issue, it stated that anticipated capacity expansion and export-driven growth will further strengthen the company’s financial ratios.
Anand Rathi Research
Rating: Subscribe for long-term
According to Anand Rathi Research, Standard Glass Lining is a specialized engineering equipment manufacturer for the pharmaceutical and chemical industries in India. It offers products that are innovative and customized for the entire pharmaceutical and chemical manufacturing value chain, and its manufacturing facilities are strategically located and equipped with cutting-edge technology.
With a market valuation of Rs 2,792.8 crore following the issuance of equity shares, a return on net worth of 20.74 times, an EV/Ebitda of 30.08 times, and a P/E of 43.01 times, the firm is valued at the upper price range. We suggest a’subscribe for long term’ rating for the IPO since we think it is properly priced,” it continued.
Geojit Financial Services
Rating: Subscribe for long-term
Standard Glass has strengthened its position in the glass lining and vacuum pump business in India by entering into agreements with leading companies such as HHV Pumps for vacuum pumps and Asahi Glassplant and GL Hakko for glass procurement. According to Geojit Financial Services, it intends to make investments in increasing the capabilities of both new and current products in order to improve its offers.
In comparison to its peers, Standard Glass’ valuation seems to be reasonably priced. There is a lot of room for expansion given the rising need for glass-lined equipment in the chemical and pharmaceutical industries. It stated that a “subscribe for long term rating” was supported by its solid margins, steady revenue growth, strong growth forecast, varied product portfolio with an emphasis on customization, and inorganic expansion ambitions.
