Scoda Tubes IPO: Stainless Steel Growth or Overhyped Alloy?

Introduction

India’s infrastructure and industrial boom is driving massive demand for high-performance materials—and stainless steel pipes and tubes are right at the core of it. That’s where Scoda Tubes Limited, a Gujarat-based manufacturer of stainless-steel seamless and welded tubes, enters the picture. After more than a decade of building export relationships and expanding capacity, the company is heading to Dalal Street with a ₹220 crore IPO.

From powering chemical plants to running pipelines across Europe, Scoda’s tubes are already global. But with rising debt and thin margins, is this IPO more about funding future growth or just plugging financial leaks?

Let’s break it down.

IPO Details

Scoda Tubes is raising ₹220 crore via a 100% fresh issue of 1.57 crore equity shares. The company aims to use this capital to expand capacity, improve working capital, and strengthen its balance sheet.

Particulars	Details
IPO Open Date	May 28, 2025
IPO Close Date	May 30, 2025
Listing Date	June 4, 2025 (Tentative)
Price Band	₹130 – ₹140 per share
Face Value	₹10 per share
Lot Size	100 shares
Retail Min Investment	₹14,000
Issue Size	₹220 crore
Fresh Issue	1.57 crore shares
Offer for Sale	None
Issue Type	Book Built
Listing Exchange	NSE, BSE
Pre-Issue Shareholding	100%
Post-Issue Shareholding	To be updated

Reservation Split

Category	Allocation
QIB	Not more than 50% of the issue
NII (HNI)	Not less than 15% of the issue
Retail	Not less than 35% of the issue

📌 Lead Manager: Monarch Networth Capital Ltd
📌 Registrar: MUFG Intime India (Link Intime)

Important Dates

Scoda Tubes has set a compact IPO timeline, with allotment and listing scheduled just days after the offer closes. Here’s the full schedule investors need to keep in mind:

Event	Date
IPO Opens	Wednesday, May 28, 2025
IPO Closes	Friday, May 30, 2025
UPI Mandate Deadline	5 PM on May 30, 2025
Basis of Allotment	Monday, June 2, 2025
Refund Initiation	Tuesday, June 3, 2025
Shares Credited to Demat	Tuesday, June 3, 2025
Listing on BSE and NSE	Wednesday, June 4, 2025

📌 Tip: Apply early and confirm your UPI mandate on time to avoid last-minute delays.

IPO Objectives

Scoda Tubes plans to deploy the ₹220 crore it raises to fuel capacity expansion, ease working capital pressure, and pursue strategic business growth. Here’s how the funds will be utilized:

1. Capacity Expansion – ₹76.99 Cr

The company will invest in machinery and infrastructure to expand its manufacturing capabilities for seamless and welded stainless-steel tubes and pipes. This is expected to enhance volume, product mix, and export potential.

2. Working Capital Requirements – ₹110.00 Cr

A significant portion of the proceeds will go toward meeting incremental working capital needs. This will allow the company to manage raw material procurement, fulfil larger orders, and reduce dependence on short-term borrowings.

3. General Corporate Purposes

The remaining funds will support day-to-day operational needs, technology upgrades, and potential strategic initiatives to boost competitiveness.

Overall, the IPO proceeds signal a mix of long-term growth focus and near-term liquidity support.

Company Business: Piping Strength into Global Infrastructure

Scoda Tubes Limited manufactures a wide range of stainless-steel tubes and pipes under its brand name “Scoda Tubes Limited.” These products cater to a broad set of industries including oil & gas, chemicals, power, automotive, pharmaceuticals, and transportation—essentially forming the metal veins of modern infrastructure projects both in India and abroad.

Product Portfolio

The company offers two core categories:

• Seamless Tubes and Pipes
• Welded Tubes and Pipes

These are further segmented into:

• Stainless steel seamless pipes
• Stainless steel seamless tubes
• Stainless steel seamless “U” tubes
• Stainless steel instrumentation tubes
• Stainless steel welded tubes and “U” tubes

Additionally, Scoda generates income from value-added services such as annealing, straightening, pickling, and marking, offered as job work to other industrial clients.

Manufacturing & Backward Integration

Scoda operates a fully integrated manufacturing facility located at Ahmedabad-Mehsana Highway, Mehsana, Gujarat, strategically positioned just 360 km from Mundra Port and 23 km from an Inland Container Depot—ensuring efficient logistics for both exports and domestic deliveries.

The plant spans 21,199 sq. metres and houses product-specific divisions with advanced machinery including:

• Hot piercing mill
• Cold drawing lines
• Pilger mills
• TIG/MIG welded tube mill
• Spectro and tensile testing equipment
• Hydro and eddy current testing units

Installed Capacity (as of Dec 31, 2024):

Product Type	Capacity (MT per annum)
Mother Hollow (Hot Piercing Mill)	20,000
Seamless Tubes and Pipes	10,068
Welded Tubes and Pipes	1,020

The company produces mother hollow in-house, which is the primary raw material for seamless products. This backward integration allows Scoda to reduce production costs, control supply timelines, and maintain quality consistency. Any excess hollow material is sold in the open market, adding an additional revenue stream.

Raw Materials

Scoda primarily uses:

• SS round bars (for seamless products)
• SS coils (for welded products)

These are sourced from Indian manufacturers, stockists, and suppliers based on real-time availability, quality, and pricing. Material cost typically accounts for 65–83% of operating revenue.

Markets & Customer Base

Scoda serves both domestic and global customers. Its target clientele includes:

• Engineering and EPC firms
• Industrial companies in oil & gas, fertilizers, power, pharma, automotive, and railways
• Stockists and distributors with exclusive rights in select markets

Domestic Distribution:

• Maharashtra-based stockist handles exclusive India sales

International Distribution:

• Dedicated stockists in the United States, Germany, Italy, Austria, and other Eastern European markets
• Exports reached 11 countries during the 9-month period ended December 2024

Export Revenue (₹ in million):

Period	Export Revenue	% of Total Revenue
9M FY25 (Dec 2024)	₹1,009.96	27.96%
FY24	₹832.24	20.82%
FY23	₹941.21	30.84%
FY22	₹592.14	30.52%

The company supplied products to 26 stockists globally in just the first nine months of FY25, highlighting its strong distribution reach.

Financials: Building Profitability, Powered by Scale

Over the past three years, Scoda Tubes Limited has steadily scaled its operations, expanded margins, and strengthened its balance sheet. The company has evolved from a small steel pipe manufacturer into a globally exporting, backward-integrated industrial player. Let’s look at the numbers behind this transformation.

Consolidated Financial Performance (₹ in Crore)

Particulars	FY22	FY23	FY24	9M FY25 (Dec 2024)
Revenue	195.05	307.79	402.49	363.48
PAT	1.64	10.34	18.30	24.91
Total Assets	156.06	238.26	330.42	428.49
Net Worth	34.98	45.31	63.61	143.55
Reserves & Surplus	33.69	44.03	62.33	99.35
Total Borrowings	109.90	139.31	202.66	202.16

Key Financial Ratios (As of FY24 / 9M FY25)

Metric	Value	What It Indicates
PAT Margin	4.58%	Margins are expanding, though still modest
ROE	28.77%	Strong equity utilization
ROCE	15.92%	Healthy returns on deployed capital
RoNW	28.77%	Reflects rising profitability and retained earnings growth

Interpretation

• Revenue Growth: From ₹195 crore in FY22 to ₹402 crore in FY24, Scoda has more than doubled its top line in just two years. With ₹363 crore booked in just nine months of FY25, the full-year revenue may cross ₹470 crore.
• Profitability Surge: PAT rose from ₹1.64 crore in FY22 to ₹24.91 crore in 9M FY25—reflecting stronger operating leverage and cost control.
• Debt Position: Borrowings have increased to fund capex and working capital, but the debt-to-equity ratio remains manageable, supported by rising net worth.
• Capital Efficiency: Both ROE and RoNW stand at impressive levels, indicating strong return potential for equity holders.

Overall, the financials show a company that is scaling efficiently, maintaining profitability, and preparing for its next phase of growth with a more robust capital structure.

Valuation: Reasonably Priced, But Is It Competitive?

At the upper end of its price band (₹140), Scoda Tubes Limited is asking for a valuation that implies a post-issue P/E of approximately 30.43x (based on diluted EPS of ₹4.6). While the valuation reflects confidence in its growth story, how does it stack up against its industry peers?

Peer Comparison (As of March 31, 2024)

Company	EPS (₹)	P/E (x)	RoNW (%)	P/BV Ratio
Scoda Tubes Limited	4.6	~30.43	28.77%	8.76 (implied)
Ratnamani Metals & Tubes Ltd.	89.18	40.82	19.90%	8.13
Venus Pipes & Tubes Ltd.	42.36	51.20	21.17%	10.84
Welspun Specialty Solutions Ltd.	1.18	44.77	67.11%	52.00
Suraj Limited	11.72	38.00	17.57%	6.74

Note: Scoda’s post-issue P/BV is estimated using NAV ₹15.99 and issue price ₹140.

Interpretation

• Competitive P/E: Scoda’s estimated P/E of ~30x is lower than all listed peers, including Venus and Ratnamani. This makes it relatively attractive from a pricing perspective.
• Superior RoNW: At 28.77%, Scoda has the highest return on net worth among the top three players, suggesting stronger profitability and internal capital use.
• Premium Justified? Despite being a smaller player in terms of scale and reach, Scoda’s consistent export growth, backward integration, and financial efficiency support a premium valuation—though it may look rich compared to larger, more diversified firms.

Bottom Line

Scoda Tubes offers a fairly priced entry into the fast-growing stainless steel pipe and tube market. Its valuation, while not cheap, appears justified by its strong return ratios, export visibility, and capacity expansion plans. However, unlike Venus or Ratnamani, Scoda is still in an aggressive growth phase—so investors will need to watch execution and margin stability post-IPO.

Grey Market Premium (GMP) & Subscription Buzz

Grey Market Premium (GMP) for Scoda Tubes IPO has been moving over the last few days. This gives a snapshot of market sentiment and potential listing expectations:

Date	IPO Price	GMP	Estimated Listing Price	Estimated Profit
27-May-2025	₹140.00	₹22	₹162 (15.71%)	₹2,200
26-May-2025	₹140.00	₹22	₹162 (15.71%)	₹2,200
25-May-2025	₹140.00	₹16	₹156 (11.43%)	₹1,600
24-May-2025	₹140.00	₹16	₹156 (11.43%)	₹1,600
23-May-2025	₹140.00	₹16	₹156 (11.43%)	₹1,600

💡 Insight:
Scoda Tubes’ GMP has shown a slight uptick on 26-May and held steady on 27-May at ₹22, indicating stronger grey market interest. If this trend holds, a listing premium of 15–16% is expected.

However, this is not unusual for smaller industrial IPOs in their early subscription phase.

That said, market watchers are keeping a close eye. With a moderate issue size of ₹220 crore, strong return ratios, and a reasonably attractive P/E, there’s a good chance the IPO may see robust oversubscription—particularly in the retail and HNI segments.

If QIB interest picks up mid-way through the bidding window, GMP could emerge closer to the final day of subscription.

Conclusion: Seamless Strategy or Welded Worry?

Scoda Tubes Limited is not just another steel company—it’s a backward-integrated manufacturer riding on India’s infrastructure and export momentum. With strong financial growth, improving margins, global market presence, and a well-diversified product lineup, the company positions itself as a niche player in a high-demand segment.

Key Strengths:

• Solid 3-year growth in revenue and PAT
• Strong RoNW (28.77%) and capital-efficient operations
• Strategic location near port and container depot
• Backward integration (mother hollow) gives cost advantage
• Export-driven revenue with presence in 11+ countries

Risks to Watch:

• Moderate PAT margins (4.5%) due to raw material cost sensitivity
• Relatively small scale vs. peers like Ratnamani or Venus
• Execution risk on planned capacity expansion

Listing Gain View:

Constructive. Reasonable valuation, high return ratios, and a modest issue size make Scoda Tubes a likely candidate for listing gains, especially if institutional interest builds closer to closing.

Long-Term View:

Cautiously optimistic. With growing export demand, backward integration, and expanding capacity, Scoda could deliver consistent compounding. But its success will depend on margin control, working capital discipline, and post-IPO execution.

Verdict: Scoda Tubes IPO is a well-priced opportunity in a niche, scalable segment. Suitable for both short-term listing gains and long-term investors willing to bet on steel with strategy.

Apply to IPOs in seconds with Angel One – smart, fast, and paperless.

Frequently Asked Questions (FAQs)

1. What is the Scoda Tubes IPO date?

The IPO opens on May 28, 2025, and closes on May 30, 2025.

2. What is the IPO size and structure?

Scoda Tubes is raising ₹220 crore through a 100% fresh issue of approximately 1.57 crore equity shares.

3. What is the price band and lot size for Scoda Tubes IPO?

The price band is set at ₹130 to ₹140 per share, and the minimum lot size for retail investors is 100 shares, requiring an investment of ₹14,000.

4. What does Scoda Tubes Limited do?

Scoda Tubes manufactures stainless-steel seamless and welded tubes and pipes, catering to sectors like oil & gas, power, pharma, railways, and automotive. It also exports to over 11 countries.

5. Where is the company’s manufacturing facility located?

The plant is located on the Ahmedabad–Mehsana Highway in Gujarat, with access to Mundra Port and an Inland Container Depot, making it ideal for exports.

6. Is Scoda Tubes profitable?

Yes. As of 9M FY25, the company reported ₹24.91 crore in profit on ₹363 crore revenue, with a RoNW of 28.77% and consistent financial growth.

7. What is the GMP of Scoda Tubes IPO?

As of now, no grey market premium (GMP) has been reported. However, investor interest may build closer to the IPO closing date.

8. Should I invest in Scoda Tubes IPO for listing gains?

The IPO has a small issue size, solid return ratios, and is fairly priced compared to peers. This makes it a likely candidate for listing gains, though final performance will depend on demand and broader market sentiment.

9. Is Scoda Tubes good for long-term investment?

If the company sustains its export growth, margin discipline, and successful capacity expansion, it may deliver long-term compounding returns in the industrial and infrastructure segment.

Related Articles

Leela Hotels IPO: Will Luxury Hospitality Deliver Listing Gains?