Standard Glass Lining IPO: What’s the scene? Worth diving in?

Disclaimer: The views and recommendations made above are from personal observations. I’m not a SEBI-registered investor, kindly do your research before making investment decisions. Last minute quick IPO analysis 1. Strong Company Fundamentals Standard Glass Lining Technology provides a wide range of solutions that cover design, engineering, manufacturing, assembly, installation, commissioning, and the establishment of standard operating procedures for pharmaceutical and chemical producers on a turnkey basis. The company's revenue grew from ₹240.2 crore in FY22 to ₹543.7 crore in FY24, reflecting a CAGR of 50.5%. Similarly, PAT increased from ₹25.1 crore to ₹60.0 crore, with a CAGR of 55%, supported by its strategic partnerships and inorganic acquisitions. Standard Glass Lining announced that it has secured ₹123 crore from anchor investors in advance of its issue opening. Standard Glass Lining IPO price band has been fixed at ₹133 - ₹140 per share. 2. QIB Subscription and Anchor Investors Observe the subscription momentum throughout the application time to see how qualified investors respond to the issue since it shows that the IPO is considered to be worthy, by people more knowledgeable than retail investors. As of the closing day of IPO, QIBs oversubscribed by issue by 4.67 times. But it's also important to track and make sure that QIBs show early interest in the IPO instead of pitching in the list minute. Also watch out which mutual fund houses are investing in the IPO, if American firms such as Blackrock, Morgan Stanley, JP Morgan Chase, Vanguard, etc invest, then there are better chances of getting better returns on investment. In this case ICICI Prudential Mutual Fund (MF), Kotak MF, Tata MF, Motilal Oswal MF, 3P Investment Managers, Kotak Infinity Fund - Class AC, ITI MF, Massachusetts Institute of Technology, Amansa Holdings, and Clarus Capital are the anchor investors for the IPO from whom an amount of Rs. 123 crores was raised. However, a contrary example here is One97 IPO (Paytm), which had interest from several American players such as Vanguard and even Warren Buffet. However, many of them sold major portions of their investments, and Paytm’s share price is now several times lower than the listing price. 3. Issue size and split It is preferable that the fresh issue size should not be much less in proportion to the total issue size. The larger the issue size and the lower the fresh issue size, the more digging needs to be done. Standard Glass Lining Technology's ₹410.05 crore-worth IPO consists of a fresh issuance of equity shares worth ₹210 crore and an offer for sale (OFS) of up to 1.43 crore shares worth Rs. 200.05 crores by its promoters and other selling stakeholders. More than 50% fresh issue is a decent number and brings credibility to the IPO. 4. Brand name and experienced Management A skilled and experienced management team can significantly influence the success of an IPO as well as the company’s long-term growth. SGTL has experienced people in the management such as: Mr. Nageswara Rao Kandula: Managing Director with over three decades of experience in creating glass-lined products that meet international standards for various chemically aggressive applications. Mrs. Krishna Veni Kandula: Executive Director contributing to the company's strategic direction and operations. Mr. Venkata Mohana Rao Katragadda: Executive Director involved in overseeing the company's engineering and manufacturing processes. 5. Attractive Valuation At the upper price band company is valuing at P/E of 43.01x (against an industry average of 52x), with an EV/EBITDA of 30.08x and market cap of ₹2792 crores. This reasonable valuation relative to its peers is a huge green flag. 6. Use of proceeds The company plans to use ₹130 crore from the fresh issue to repay debts and allocate ₹30 crore for investment in its wholly-owned subsidiary, S2 Engineering Industry. Clearly defined use of proceeds is another reason to invest in the IPO. Verdict: After a long time, we see an IPO that's worth applying. 100% worth applying even if you don't take the high GMP into account.