Tolins Tyres IPO Listing Overview
The much-anticipated debut of Tolins Tyres Limited on the Bombay Stock Exchange (BSE) on September 16 did not meet investor expectations. The shares of Tolins Tyres were listed at Rs 227, a slight increase of just 0.4% from its issue price of Rs 226. This lukewarm listing came as a surprise to many, especially since grey market estimates had anticipated a much more favorable listing with shares expected to trade at a premium of 13% right up to the last moment.
IPO Subscription Details
Tolins Tyres’ Initial Public Offering (IPO) was open for bidding from September 9 to 11, with a price band set between Rs 215 and Rs 226 per share. The total IPO size amounted to Rs 230 crore, comprising Rs 200 crore from the sale of new shares and Rs 30 crore from the promoters’ sale. The response from investors was robust; the IPO was oversubscribed a remarkable 25.03 times by the closing day. The non-institutional investors (NII) exhibited the highest enthusiasm, subscribing 28.80 times the shares available in their category, while qualified institutional buyers (QIB) and retail segments saw subscriptions of 26.72 times and 22.45 times, respectively.
Utilization of IPO Proceeds
Tolins Tyres announced plans for the prudent use of the funds raised through the IPO. Specifically, Rs 70 crore will be allocated to repay debts, helping the company manage its outstanding borrowings of Rs 101.33 crore as of FY 2024. Additionally, about Rs 75 crore is earmarked for long-term working capital needs, and Rs 46.3 crore will be invested in its wholly-owned subsidiary, Tolin Rubbers. The remainder of the funds will serve general corporate purposes, ensuring the company has adequate liquidity for its operations.
Company Profile: Tolins Tyres
Tolins Tyres specializes in manufacturing a diverse range of tyres, including those for two-wheelers, three-wheelers, light commercial vehicles, and agricultural machinery. In addition to their core tyre products, the company also produces precured tread rubber and accessories like bonding gum and vulcanizing solutions. Tolins Tyres has established an international footprint, exporting to around 40 countries, with a significant presence in regions like the Middle East, East Africa, Jordan, Kenya, and Egypt. Its competitors in the listed sector include Indag Rubber, Vamshi Rubber, TVS Srichakra, GRP, and Elgi Rubber Company.
Financial Performance
The financial health of Tolins Tyres has seen substantial improvement. For FY 2024, the company reported a net profit of Rs 26 crore, a significant increase from Rs 4.99 crore in the previous financial year—an impressive five-fold growth. Revenue also surged, reaching Rs 227.2 crore, which represents a 92.2% increase compared to Rs 118.2 crore in FY 2023. The company’s EBITDA reflected similar positive trends, rising nearly fourfold to Rs 46.4 crore from Rs 12.3 crore, while EBITDA margins almost doubled from 10.4% to 20.4%.
Conclusion
While the listing of Tolins Tyres may have disappointed in terms of immediate stock performance, the strong subscription figures and substantial financial growth indicate the company’s potential for long-term success. Investors and analysts alike will be keenly watching how the company utilizes its IPO proceeds and executes its growth strategy in the coming quarters.
