There was market mayhem on Monday, with the benchmark indices tanking 1.5 per cent. But, even amid this doom and gloom, the public issue of Standard Glass Lining Technology (SGLT) saw bumper demand with the issue getting fully subscribed within 20 minutes of bidding opening.
The initial public offering, which comprises a fresh equity issue of Rs 210 crore and an offer sale for up to 1.43 crore shares, opened for subscription on Monday, January 6. As of 4 pm, the issue was subscribed 11.4 times. While a little over 2.08 crore shares were on offer, bids were received for over 23.78 crore shares.
While the portion of the issue reserved for qualified institutional buyers (QIB) was subscribed 1.81 times, the portion reserved for non-institutional investors was subscribed over 19 times and the retail individual investors portion was subscribed more than 13 times.
The issue priced in the Rs 133-140 band closes for subscription on Wednesday, January 8.
SGLT is one of the top five specialised engineering equipment manufacturers for the pharmaceutical and chemical sectors in India. Its portfolio comprises core equipment like reaction systems and storage, separation and drying systems used in the manufacturing of pharmaceutical and chemical products.
It is also one of India's top three manufacturers of glass-lined stainless steel and high-alloy-based specialised engineering equipment.
Analysts' views on the company
According to a research analyst at Geojit Financial Services, globally, the glass-lined equipment market was valued at $21 billion in 2023 and is expected to reach $34 billion by 2028.
SGLT's revenue grew from Rs 240.2 crore in FY2022 to Rs 543.7 crore in FY2024, while profit after tax rose from Rs 25.1 crore to Rs 60 crore, they pointed out.
"The growing demand for glass-lined equipment in pharmaceuticals and chemicals offers significant growth potential. SGLT's healthy margins, consistent revenue growth, robust growth outlook, a diverse product portfolio with a focus on customization, and inorganic growth plans support a 'subscribe' rating for the stock on a medium to long term basis," the analyst said.
Vikas Jain, head of research at Reliance Securities pointed out that SGLT was one of the fastest growing companies in its industry operating through its 8 manufacturing facilities with advanced technological capabilities.
"SGLT has built long-term relationships with marquee clients getting repeat large orders through its execution capabilities at competitive pricing. SGLT has strong financial metrics, large global markets with growth of 6-10% and is highly poised for significant growth in the coming years," he noted. The broking firm had also advised investors to 'subscribe' to the issue.
Anand Rathi Share and Stock Brokers analyst Manan Goel too felt the issue was "fairly priced."
"They are one of the few companies in India offering end-to-end customized solutions in the specialized engineering equipment used in the pharmaceutical and chemical sectors," he said.
Ahead of the IPO, on January 3, SGLT raised Rs 123 crore from nine institutional investors. These included Amansa Holdings, Clarus Capital, ICICI Prudential Flexicap Fund, Kotak Manufacture in India Fund, Tata Multicap Fund, and Massachusetts Institute of Technology among others.
