Standard Glass Lining IPO Fully Subscribed: Should You Invest in the Rs 410 Crore Issue?

The initial public offering (IPO) of Standard Glass Lining Technology Limited opened for subscription today. The Rs 410.05 crore public issue is a book-built issue comprising a fresh issue of 1,50,00,000 shares and an offer for sale (OFS) of 1,42,89,367 equity shares with a face value of Rs 10 per share.

The subscription window to apply for the public issue is scheduled to close on Wednesday, January 8, 2025. The allotment of shares is expected to be finalised on Thursday, January 9, 2025. Shares will be credited to the demat accounts of respective shareholders on Friday, January 10, 2025. Standard Glass Lining shares are scheduled to be listed on NSE and BSE on Monday, January 13, 2025.

Standard Glass Lining IPO lot size

Investors can bid for a minimum of 107 shares and in multiples thereof. A retail investor will need a minimum of Rs 14,904 to bid for one lot of 107 shares, while to bid for a maximum of 13 lots or 1,391 shares, a retail investor would need Rs 1,94,740. For small non-institutional investors (NIIs), the minimum lot size is 14 lots or 1,498 shares, which totals Rs 2.09 lakh. Meanwhile, big non-institutional investors must invest in at least 66 lots or 7,062 shares, amounting to Rs 9.88 lakh.

Standard Glass Lining Technology has booked 50 per cent equity shares for qualified institutional buyers (QIBs), while 15 per cent of the offer has been reserved for non-institutional investors (NIIs). Retail investors will get the remaining 35 per cent of the allocation in the IPO.

Standard Glass Lining IPO subscription status

The company has also received a stellar response from investors on the first day of bidding. By 01:33 PM on Monday, the issue has been subscribed 7.56 times, the retail portion of the public issue had been booked 9.66 times, the NII segment had been filled 12.34 times, whereas the QIB segment had been subscribed 0.01 times, according to data available on the National Stock Exchange (NSE).

Standard Glass Lining IPO objective

In its Red Herring Prospectus (RHP), Standard Glass Lining said it will not receive any proceeds from the OFS and each of the selling shareholders will be entitled to its respective portion of the proceeds from the OFS.

The company aims to utilize the proceeds from the fresh issue for funding capital expenditure towards the purchase of machinery and equipment, funding inorganic growth through strategic investments and/or acquisitions and general corporate purposes. In addition, the company aims to invest in its wholly owned subsidiary, S2 Engineering Industry Pvt Ltd, to fund its capital expenditure requirements towards the purchase of machinery and equipment.

Ahead of its IPO, Standard Glass raised Rs 123 crore from nine anchor investors by allocating 87,86,809 equity shares at Rs 140 per share. Amansa Holdings, Kotak Asset Management Company, Clarus Capital, 3P Indian Mutual Fund, Massachusetts Institute of Technology, ICICI Prudential MF, Tata MF, Motilal Oswal MF and ITI MF.

Standard Glass Lining IPO GMP

The Grey Market Premium (GMP) for the Standard Glass Lining IPO stands at Rs 97, as of 11:28 AM on January 6, 2025. With the issue's price band set at Rs 140, the estimated listing price for the IPO is Rs 237, factoring in the GMP. This suggests an expected potential gain of approximately 69.29 per cent for each share upon listing, according to Investorgain.com.

KFin Technologies serves as the registrar for the Standard Glass Lining IPO. IIFL Securities and Motilal Oswal Investment Advisors are the book-running lead managers for the public offering.

Is Standard Glass Lining IPO worth subscribing to?

Geojit - Subscribe

Brokerage firm Geojit has given a “Subscribe” rating for the stock on a medium to long-term basis citing healthy margins, consistent revenue growth, robust growth outlook, a diverse product portfolio with a focus on customization, and inorganic growth plans.

According to the report, at the upper price band of Rs 140, SGLTL is available at a P/E of 38.5x (on FY25 Annualised), which appears fairly priced compared to peers.

“The growing demand for glass-lined equipment in pharmaceuticals and chemicals offers significant growth potential,” it added.

Anand Rathi - Subscribe for long term

Analysts at brokerage firm Anand Rathi believe that the issue is fairly priced and recommended a “Subscribe-Long term” rating to the IPO.

“At the upper price band company is valuing at P/E of 43.01x, with an EV/EBITDA of 30.08x and market cap of Rs 27,928 million post issue of equity shares and return on net worth of 20.74 per cent,” the brokerage said.

Arihant Capital - Subscribe

Arihant Capital has assigned a "Subscribe" rating to this issue, highlighting its promising prospects. Standard Glass Lining Technology Limited, one of India's top five specialized engineering equipment manufacturers, boasts a strong growth potential, driven by its customized products and advanced manufacturing facilities.

At the upper price band of Rs 140, the issue is priced at an EV/EBITDA multiple of 28.44x, based on FY24 EBITDA, and a P/E ratio of 38.50x, based on an annualized FY25 EPS of Rs 3.64, it said in a report.

About the company

Incorporated in September 2012, Standard Glass Lining Technology Ltd is one of the top five specialized engineering equipment manufacturers for pharmaceutical and chemical sectors in India, in terms of revenue in Fiscal 2024, with in-house capabilities across the entire value chain. It provides turnkey solutions, including design, engineering, manufacturing, assembly, installation and the creation of standard operating procedures for pharmaceutical and chemical manufacturers. It has eight manufacturing facilities located in Hyderabad, Telangana. The company’s product portfolio includes reaction systems, storage, separation and drying systems, as well as plant engineering and services.

The company reported a net profit of Rs 36.27 crore with a revenue of Rs 312.1 crore for the six months ended on September 30, 2024. In F25, the company’s revenue stood at Rs 549.68 crore with a net profit of 60.01 crore. The company shall command a total market capitalization of around 2,793 crore.