The first mainboard IPO of 2025 has arrived, and it’s making waves. Standard Glass Lining Technology, a leading manufacturer of engineering equipment for the pharmaceutical and chemical sectors in India, is set to debut on the stock market. Here is an in-depth look at the IPO, its valuation, growth prospects, and whether it deserves your investment.
IPO Details
- IPO Date: January 6, 2025, to January 8, 2025
- Price Band: Rs 133-140 per share
- Lot Size: Minimum of 107 shares
- Issue Size: Rs 410.05 crore, comprising a fresh issue of Rs 210 crore and an Offer for Sale (OFS) of 1,42,89,367 shares
- Market Capitalization (Post-Issue): Approximately Rs 2,793 crore
- Listing Date: January 13, 2025
- Stock Exchanges: BSE and NSE
Company Overview
Incorporated in 2012 and headquartered in Hyderabad, Standard Glass Lining Technology specializes in engineering solutions for pharmaceutical and chemical manufacturers. With eight manufacturing units in Hyderabad, the company provides turnkey solutions, including design, engineering, manufacturing, assembly, and installation of equipment made from glass-lined materials, stainless steel, and nickel alloys.
Use of IPO Proceeds
The net proceeds from the IPO will be allocated as follows:
- Funding capital expenditure requirements
- Repayment or prepayment of outstanding borrowings
- Investment in wholly-owned subsidiaries
- Supporting inorganic growth opportunities
- General corporate purposes
Financial Performance
| Financial Metric | FY24 (H1) | FY24 (Full Year) |
|---|---|---|
| Revenue | Rs 312.1 crore | Rs 549.68 crore |
| Net Profit | Rs 36.27 crore | Rs 60.01 crore |
| Return on Equity (ROE) | 20.74% | – |
| EBITDA Growth (FY22-FY24 CAGR) | 53.1% | – |
Standard Glass has demonstrated robust growth, with revenue and profit showing strong compound annual growth rates (CAGR) of 50% and 52%, respectively, from FY22 to FY24.
Key Highlights
- Strategic Partnerships: The company has alliances with industry leaders like HHV Pumps, Asahi Glassplant, and GL Hakko, strengthening its product portfolio and market position.
- Robust Order Book: A current order book of Rs 450 crore ensures near-term revenue visibility.
- Export Ambitions: Aiming for 20% of its revenue from exports by 2026, the company is leveraging global demand driven by the China+1 strategy.
- Focus on Innovation: Standard Glass is expanding its product offerings and manufacturing capabilities to meet rising demand and enter new markets.
Industry Outlook
The pharmaceutical and chemical sectors in India are poised for significant growth, bolstered by the government’s Production Linked Incentive (PLI) scheme and rising global demand for glass-lined equipment. The industry’s capital spending is projected at Rs 12,000-15,000 crore annually until FY27, providing a solid growth runway for companies like Standard Glass.
Valuation and Peer Comparison
| Metric | Standard Glass | Industry Average |
| Price-to-Earnings (P/E) | 47.8x | 52.5x |
| EV/EBITDA | 28.6x | – |
| Return on Capital Employed | 17.5% | – |
At a P/E of 47.8x, the IPO is priced at a 13% discount to the industry average, making it an attractive option compared to its peers. The company’s superior margins and robust growth potential further enhance its appeal.
Brokerage Recommendations
- Indsec Research: Subscribe (Strong growth and competitive pricing)
- SBI Securities: Subscribe for long term (Geographical and product expansion with robust growth outlook)
- SMIFS: Subscribe (Strategic partnerships and export market expansion)
- Canara Bank Securities: Subscribe (Favorable valuation and operational efficiency)
- Anand Rathi Research: Subscribe for long term (Innovative product offerings and advanced manufacturing capabilities)
- Geojit Financial Services: Subscribe for long term (Healthy margins and diversified portfolio)
MUST READ: Standard Glass Lining IPO Fully Subscribed Within 20 Minutes, GMP Surges to 70%
Should You Invest?
Standard Glass Lining Technology stands out due to its consistent growth, strong financials, and strategic initiatives. With a robust order book, ambitious export plans, and alliances with industry leaders, the company is well-positioned to capitalize on growing demand in the pharmaceutical and chemical sectors.
The IPO is reasonably priced, offering a balanced risk-reward profile for investors. However, as with any investment, potential investors should carefully consider their financial goals and risk tolerance before making a decision.
Disclaimer
This article is for informational purposes only and does not constitute investment advice. Please consult a financial advisor or conduct thorough research before making investment decisions.
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