The Initial Public Offering (IPO) for Tolins Tyres opened on September 9 and closed today, September 11. The company is looking to raise around ₹230 crore through this IPO, and the shares will be listed on both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
IPO Price and Anchor Investment
The price range for the IPO was set between ₹215 and ₹226 per share. Before the public subscription, Tolins Tyres raised ₹69 crore from anchor investors by offering 30.53 lakh shares at the highest price of ₹226 per share.
Strong Demand for the IPO
The IPO has seen a strong response, with a subscription rate of 10.18 times by 12:35 pm on the last day of bidding. Investors placed bids for 7.25 crore shares, compared to the 71.23 lakh shares on offer. The retail investor portion was subscribed 14.33 times, while non-institutional investors subscribed 11.28 times. The Qualified Institutional Buyers segment saw a subscription of 2.10 times.
Details About the Offering
Tolins Tyres’ IPO includes a fresh issue of 0.88 crore shares to raise ₹200 crore and an offer for sale of 0.13 crore shares, amounting to ₹30 crore. The company’s promoters, Kalamparambil Varkey Tolin and Jerin Tolin, will each sell shares worth ₹15 crore. Currently, they hold an 83.31% stake in the company.
Of the ₹200 crore raised, ₹75 crore will be used to improve working capital, ₹62.55 crore will help pay off debt, and ₹24.36 crore will go to their subsidiary, Tolin Rubbers, for debt repayment and working capital.
Application and Allotment Details
To apply for the IPO, investors had to purchase a minimum of 66 shares, which would cost ₹14,916. The allotment of shares is expected to happen on September 12, 2024, with the company’s stock expected to be listed on September 16, 2024. Saffron Capital Advisors Private Limited is managing the IPO, while Cameo Corporate Services Limited is handling the registration.
About Tolins Tyres
Founded in 2003, Tolins Tyres is a leading tyre manufacturer in India. The company specializes in tyre retreading solutions and exports its products to 40 countries. Their product line includes tyres for two-wheelers, three-wheelers, light commercial vehicles, and agricultural machinery, along with various accessories like tread rubber, bonding gum, and tyre flaps. Tolins Tyres operates three manufacturing plants and has 163 stock-keeping units (SKUs) in the tyre category. Their distribution network includes 3,737 dealers across India.
Investment Opinions
SMC Global suggests that high-risk investors may consider Tolins Tyres’ IPO due to the company’s growth. However, they also point out challenges in the tyre industry, such as a limited supply of raw materials like natural rubber and carbon black. The stock is priced at a pre-IPO price-to-earnings ratio of 26.64 times, based on the financial year 2024 earnings per share of ₹8.48.
Swastika Investmart recommends the IPO for investors looking for long-term exposure in the tyre sector. They highlight Tolins Tyres’ diverse product range, solid financials, and reasonable IPO valuation.
Master Capital Services advises medium- to long-term investment, expecting the Indian tyre industry to grow by 4-6% in fiscal year 2025. They believe Tolins Tyres will benefit by expanding its domestic reach and introducing new products.
Grey Market Premium (GMP)
The grey market premium (GMP) for Tolins Tyres’ IPO is ₹39 per share, suggesting a possible listing price of ₹265, which is 17.26% higher than the issue price of ₹226. The GMP has remained steady since September 9.
The grey market premium shows how much investors are willing to pay above the issue price before the shares are officially listed.
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