Scoda Tubes IPO opens today; to raise ₹220 crore

28 May 2025 , 11:14 AM

Scoda Tubes Limited is a manufacturer of Stainless-steel products such as tubes, pipes etc. with over 14 years experience. The company is dedicated to the supply of seamless and welded products in the stainless-steel category.

Its end customers span across various industries such as oil and gas, chemicals, fertilizers, power, railways, automobiles, the pharmaceutical, and the food and beverage sector.

It operates a plant situated in Mehsana, Gujarat with an installed capacity of 20,000 MTPA of mother hollow, 10,068 MTPA of seamless tubes, pipes, “U” tubes and instrumentation tubes and 1,020 MTPA of welded products/”U” Tubes.

Its products are sold to a variety of EPC and Industrial customers. It is also vertically integrated in the sense that it operates a hot piercing mill for the production of mother hollows which are used as a raw material for seamless pipe products. Scoda Tubes Limited also has a strong export presence, with a network spanning 11 countries. Europe is among the largest export markets as the company has a stockist network in Austria, Germany, Italy, Poland, and Eastern European markets.

Offer Details

The IPO offer is for a fresh issue shares aggregating to a total amount of up to INR 2,200 m. There is no offer for sale. A pre-IPO placement to the value of INR 550 m has already been completed at a price of INR 125 per share. As a result, the original size of the IPO has been reduces from INR 2,750 m.

Price Band

The price range for the IPO has been set at INR 130 to INR 140 per Equity Share.

BRLMs and Other Details

The BRLMs to the issue are Monarch Networth Capital Limited and MUFG Intime India Private Limited (formerly Link Intime India Private Limited)

 

Objects of The Issue

The proceeds of the IPO are proposed to be utilized for the following purposes.

Capital Expenditure

• Expanding Product capacity of seamless and welded tubes: INR 769 m

Working Capital Needs

• Funding incremental working capital needs: INR 1,100 m

 

Stainless Steel – Industry Overview

History and Origins

The origins of the stainless-steel industry can be traced back to early 1900s. An English metallurgist named Harry Brearley accidentally discovered a corrosion-resistant steel alloy in 1913. This led to the invention of stainless steel, first used in cutlery, but later applied to applications diverse as construction, automotive, and aerospace.

Evolution

The stainless-steel sector has progressively evolved over time, largely due to technological developments, evolving market demands and dynamic market trends. The industry has grown to be a producer of several grades and types of stainless steel, including austenitic, ferritic, and duplex.

Customers and Market Segments

The stainless-steel sector meets active demands from a variety of different customer and market segments, including:

Construction: Builders, architects and engineers choose stainless steel for its ability to resist corrosion and attractiveness.

Automobile: Automobile industries utilize stainless steel for the exhaust system, fuel tanks and some other parts.

Aerospace: Aircraft and spacecraft are constructed from stainless steel because of its high tensile strength, superior fracture and- temperature resistance, and radiative properties.

Household Goods: Stainless steel is also the material of choice for various cooking implements, kitchen utensils, and dining treats.

Process industries: These products are resistant to corrosion and used in chemical plants, oil refineries as well as power plants.

Key Trends and Drivers

Increasing demand for corrosion-resistant products: The increase in demand for products that are corrosion-resistant, sturdy, and last a long time is expected to drive the market for stainless steel.

Technological advances: Enhanced manufacturing processes coupled with product innovations are increasing the industry’s product portfolio and applications.

Environmental sustainability and concerns: The industry is making a move towards sustainability and environmentally friendly practices (e.g. recycling, reducing waste etc.).

 

Market Size and Growth

The market for stainless steel pipes and tubes has been witnessing robust growth in the past couple of decades. The demand for stainless steel pipes and tubes is expected to increase by 3-4% YoY to reach around 3.65-3.75 MTPA in 2028. The market size of stainless-steel seamless pipes & tubes is about 15-20 per cent of the total demand. Welded stainless steel pipes and tubes have a substantial share of 80-85 per cent of the market.

 

Key Driving Factors

The demand for stainless steel pipes and tubes continues to rise due to various factors:

Increasing Demand From End Use Industries: Several end use industries such as oil and gas, building and construction, automotive and chemical processing are growing and drive greater demand.

Government Policies & regulations: Imposition of anti-dumping duty on import of stainless-steel pipes and tubes are aiding the growth of the domestic industry.

Growth in infrastructure: Rising number of infrastructure development activities, including transportation, water plumbing system and power projects, is expected to propel demand for stainless pipes and tubes.

Shifting Focus on Quality and Safety: The shift in focus toward quality and safety in a diverse range of industries is promoting the need for high-quality stainless-steel pipes and tubes.

 

History and Evolution

Scoda Tubes Limited is a private limited company, incorporated in 2008 in Gujarat, India. From its humble beginning, the company had grown to become one of the leading manufacturers of stainless-steel pipes and tubes.

Customer & Segments:

Manufacture of stainless-steel pipes and tubes is the key business. Its products comprise a diverse range of seamless and welded stainless steel pipes and tubes. Its customers span several industries like oil and gas, petrochemicals, fertilizers, pharmaceuticals and others.

Production Capacity

It has a manufacturing capacity of 10,068 MTPA of stainless-steel seamless pipes and tubes and 1,020 MTPA of stainless-steel welded pipes and tubes. Also, the company has a mother hollow capacity of 20,000 MTPA.

Products and Services

Its products include stainless steel seamless pipes, stainless steel seamless tubes, stainless steel seamless “U” tubes, stainless steel hydraulic / instrumentation tubes, and stainless-steel welded tubes and “U” tubes. Apart from production, it also offers cutting, bending and tube and pipe fabrication services.

 

Company Overview: Strengths & Weaknesses

Diversified product portfolio is the key differentiator for Scoda tubes. In addition, it has a strong presence in export markets.

The company considers its strong focus on quality a key differentiator. This has helped it maintain a loyal customer base, which has been a significant source of competitive strength.

It has a strong distribution presence. However, it is still lower than some of its large competitors. It is also not the largest player in the market. In this business, economies of scale and high utilization are a competitive advantage.

 

Competitive Landscapes

The firm competes in a competitive industry with a handful of key players competing for market share. The key competitors include:

• Ratnamani Metals and Tubes
• Venus Pipes
• Suraj Limited
• Welspun Specialty Solutions

Competitor Analysis

• Ratnamani Metals & Tubes: A major producer of stainless steel seamless tubular products in India. Ratnamani is a highly efficient manufacturer but has a weaker export presence than Scoda.
• Suraj Limited: Scoda believes it has a stronger product portfolio. However, Suraj invests heavily in marketing and advertising and is a strong competitor.
• Venus Pipes: A well-known name in the stainless-steel pipes and tubes business, Venus Pipes are known for its high-end products. It is, however, more competitively priced than Venus Pipes but has a weaker distribution network.
• Welspun Specialty Solutions: Welspun focuses on specialty pipes and tubes. In comparison, Scoda tubes have a stronger presence in the market.

Financial Profile

Revenue Growth: The company’s revenue has surged, with a 57.80% rise from INR 1,950.53 million in Fiscal 2022 to INR 3,077.85 million in Fiscal 2023. This continued in Fiscal 2024, where revenue further grew by 30.77%. Expansion of its manufacturing capacity and increase in exports were a key reason behind this growth.

Profit Growth: The company’s profits have also experienced significant growth. They have grown by 531.78% from INR 16.36 million in FY 2022 to INR 103.36 million in FY 2023. For Fiscal 2024, the profit surged 77.05% to INR 183.00 million.

Financial performance: The company’s return metrics have also shown a strong improvement. Notably, its ROCE has increased to 15.9%. Also, its EBITDA margin has increased to 14.7% in FY’24.

 

Figure: Summary of Revenue and PAT

Metric	Period Ending March 31, 2022	Period Ending March 31, 2023	Period Ending March 31, 2024
Revenue from Operations	1,940	3,051	3,999
Profit Before Tax and after Exceptional Items	23	144	259
Profit After Tax (PAT)	16	103	183

Source: RHP

Figure: KPI Comparison (FY24)

	Revenue Growth (%)	EBITDA Margin (%)	EBIT Margin (%)	RoE (%)	ROCE (%)
Scoda Tubes Limited	31.05	14.7	10.6	28.77	15.92
Ratnamani Metals & Tubes Limited	13.07	17.73	15.8	19.9	24.36
Venus Pipes & Tubes Limited	45.22	18.24	16.77	21.17	24.22
Welspun Specialty Solutions Limited	66.74	8.01	5.79	67.11	11.44
Suraj Limited	-9.81	11.94	9.1	17.57	19.27

Source: RHP

Table 2: Comparison of Financials and Valuation (FY24)

Peer	Market Price	Face Value	Revenue from Operations (INR million)	Basic EPS	Diluted EPS	P/E Ratio
Scoda Tubes Limited	–	10	3,999	4.6	4.6	–
Ratnamani Metals & Tubes Limited	2,847	2	50,591	89.2	89.2	31.9
Venus Pipes & Tubes Limited	1,304	10	8,022	42.4	42.4	30.8
Welspun Specialty Solutions Limited	32	6	6,967	1.2	1.2	27.2
Suraj Limited	408	10	3,307	11.7	11.7	34.8

Source: RHP