Tolins Tyres IPO: Overview and Subscription Details
The highly anticipated IPO of Tolins Tyres, a Kerala-based rubber and tyre manufacturing company, has officially opened for subscription today, aiming to raise ₹230 crore. The IPO has received a strong response from retail investors, with their reserved portion quickly filling to full capacity. Currently, shares are trading with a Grey Market Premium (GMP) of ₹25, reflecting an 11.06% increase from the upper price band of the IPO, which is set between ₹215 to ₹226. Before the IPO launch, the GMP was recorded at ₹30. However, market experts caution that investment decisions should be based on the company’s fundamentals and financial performance rather than solely on grey market indicators.
Subscription Status by Category
| Category | Subscription Status |
|---|---|
| Qualified Institutional Buyers (QIB) | 0.00 times |
| Non-Institutional Investors (NII) | 0.20 times |
| Retail Investors | 1.29 times |
| Total Subscription | 0.69 times |
(Source: BSE, September 9, 2024 | 11:42 AM)
Investment and Allotment Timeline
The IPO will remain open for subscription until September 11, providing investors the opportunity to invest in lots of 66 shares. Allotment of shares is set to be finalized on September 12, with listings expected to occur on both BSE and NSE on September 16. The Registrar for this issue is Cameo Corporate Services.
IPO Financial Breakdown
Under this IPO, total new shares worth ₹200 crore will be issued. Additionally, 13,27,434 shares, with a face value of ₹5, are being offered for sale. Funds generated from the Offer for Sale will be directed to the selling shareholders, while proceeds from new shares will aid in repaying loans, satisfy long-term working capital needs, and support investments in its subsidiary, Tolin Rubbers, as well as general corporate purposes.
Company Insights and Financial Health
Founded in 2003, Tolins Tyres has established itself as a reputable manufacturer of tyres, with its products not only popular in India but also exported to over 40 countries. The company’s operations are divided into tyre manufacturing and tread rubber production. As of March 2024, Tolins Tyres has a robust distribution network with 8 depots and 3,737 dealers nationwide. The company boasts three manufacturing facilities, two located in Kerala and the third in the UAE, alongside a diverse product range, including 163 SKUs in the tyre category and 1,003 in the tread rubber category.
In terms of financial performance, Tolins Tyres recorded a net profit of ₹26.01 crore and a revenue of ₹228.69 crore for FY 2024, with a manageable debt of ₹78.77 crore. Notably, exports represent approximately 5% of its total revenue, while tread rubber contributes a significant 75% to the business.
Expert Opinions and Recommendations
According to analysts from SMC Global, investors who are willing to take on more risk may find potential in Tolins Tyres, especially considering its growth trajectory. However, they also point out that the tyre manufacturing industry is facing challenges due to a limited supply of essential raw materials, such as natural rubber and carbon black. The IPO has been priced at 26.64 times its FY 2024 earnings per share (EPS) of ₹8.48, which investors should consider when making decisions.
Conclusion
The IPO of Tolins Tyres presents an interesting opportunity for investors, particularly those looking at long-term growth in the manufacturing sector. Careful assessment of the company’s fundamentals and broader market conditions will be crucial in making informed investment decisions.
Disclaimer: The views and suggestions provided in this article are solely those of financial experts and brokerage firms. The management and website do not hold responsibility for any investment outcomes. It is recommended that investors seek advice from certified financial professionals before proceeding with any investments.
