Thank you for reading this post, don't forget to subscribe!

In the dynamic landscape of cryogenic equipment, Inox India has emerged as a standout player, and its recent Initial Public Offering (IPO) has garnered significant attention. Concluding on December 18, 2023, the three-day bidding process not only demonstrated the keen interest of investors but also witnessed an exceptional oversubscription of 13.67 times the offered shares. This resounding success underscores the market’s confidence in Inox India’s potential and the growing relevance of cryogenic solutions.

Inox India: A Pioneering Force in Cryogenic Equipment:

Established in 1976, Inox India has established itself as a frontrunner in providing cryogenic equipment, with a primary focus on cutting-edge tank solutions. Beyond offering products, the company provides end-to-end solutions, encompassing design, engineering, manufacturing, and installation. This comprehensive approach has positioned Inox India as a pivotal player in an industry where precision and reliability are paramount.

Subscription Details: A Steady Surge to 13.67 Times Oversubscription:

Valued at Rs 1,459.32 crore, Inox India’s IPO witnessed a steady and substantial surge in demand throughout the three-day bidding period. The first day concluded with a subscription rate of 2.79 times, setting a promising tone. This momentum continued to build, reaching an impressive 7.07 times by the end of the second day. The final day saw an extraordinary surge, with investors bidding for an outstanding 13.67 times the total equity shares offered, signifying widespread confidence in the company’s future prospects.

Investor Interest Across Segments: Diverse Appeal:

Inox India’s IPO garnered interest across diverse investor segments, reflecting its widespread appeal. Retail investors, showing remarkable enthusiasm, subscribed at a noteworthy rate of 11.18 times. Simultaneously, non-institutional investors displayed robust interest, with a subscription level of 31.10 times, indicating a broad recognition of Inox India’s growth potential. Even qualified institutional bidders (QIBs) actively participated, reaching a commendable subscription level of 4.94 times, further reinforcing the broad investor confidence in the company.

Financial Strength and Market Position: A Solid Foundation:

One of the hallmarks of Inox India is its financial robustness, boasting EBITDA margins that surpass 21%, outperforming industry averages for listed capital goods players. Over recent years, the company has consistently delivered a Return on Capital Employed (ROCE) exceeding 30%, exemplifying financial efficiency and resilience in a competitive landscape. This financial strength establishes Inox India as a stable and reliable investment option, drawing investor interest seeking both stability and growth.

Factors Driving Demand: Strategic Positioning in a Growing Market:

Advertisement

Inox India’s strategic focus on cryogenic solutions aligns seamlessly with evolving market trends. The increasing emphasis on green fuels, particularly the surging demand for liquid hydrogen, coupled with the growing preference for liquefied natural gas (LNG) over traditional fuels like diesel, positions Inox India for substantial revenue growth. Analysts anticipate a robust Compound Annual Growth Rate (CAGR) of 8.4% from CY23 to CY28 in the demand for cryogenic equipment used in LNG storage, distribution, and handling. This strategic alignment with evolving market dynamics positions Inox India as a key player in an industry poised for substantial growth.

Grey Market Premium and Analyst Recommendations: Positive Indicators:

In the unofficial market, Inox India commands a noteworthy grey market premium of Rs 535-555 per share, indicating a potential upside of 82-85%. This substantial increase from the initial premium observed on the first day of bidding reflects growing confidence and positive sentiment surrounding the IPO.

Nirmal Bang Securities, a respected financial entity, unequivocally recommends subscribing to the issue. The endorsement is grounded in Inox India’s dominant market position, the potential for improved capacity utilization, and the anticipated growth in demand for cryogenic solutions. The strategic alignment with emerging market trends, combined with the prospect of hydrogen emerging as a preferred future fuel, adds further weight to the positive outlook.

Conclusion: Anticipating Listing Gains and Future Growth:

Inox India’s successful IPO, characterised by robust subscription rates and positive investor sentiment, signals confidence in the company’s business model and growth trajectory. The focus on cryogenic solutions for green fuels positions Inox India as a key player in an evolving market. As the company gears up for listing on both BSE and NSE on December 21, 2023, investors are keenly anticipating potential listing gains in this promising venture.

The success of Inox India’s IPO not only underscores its current standing in the industry but also signifies the company’s potential for future growth and innovation. The strategic alignment with market trends, consistent financial performance, and comprehensive solutions approach position Inox India as an attractive investment opportunity. In a landscape defined by technological advancements and a growing emphasis on sustainable solutions, Inox India stands poised for not only a successful listing but also sustained growth in the evolving cryogenic equipment market.

By

I have accumulated a decade of experience in the merchant navy, where I held various ranks and contributed my skills to the maritime industry. In 2019, I transitioned from my seafaring career and embarked on a new path, delving into the realm of social media platforms. This change allowed me to channel my expertise and dedication into creating a meaningful presence across different social media channels. As I navigated away from the open seas, I found myself navigating through the dynamic and interconnected world of digital media, utilizing my experiences to engage, connect, and communicate effectively with audiences in this digital age.