Inox India IPO: A manufacturer of cryogenic tanks, Inox India, aims to raise Rs 1,460 crore via an offer for sale, reducing the promoters’ stake from 99.3% to 75% post-IPO. The company’s products are crucial in the commercial LNG, liquid hydrogen, and MRI cryostat development sectors, potentially cutting down substantial import reliance.
Given that Inox India is financially sound with no debts and a history of dividend payouts, the IPO could attract investor interest, says an ET analysis.
Inox India: Financials, business operations & more
Business operations: Inox India operates three plants in India, producing cryogenic tanks vital for sub-zero temperature applications. It has a capacity of 3,100 equivalent tank units and 2.4 million disposable cylinder units. It’s constructing a new Rs 200 crore plant using internal funds. Revenue streams include 78% from industrial gases such as oxygen, nitrogen and argon, 25% from LNG tanks, and the remainder from cryo-scientific applications for ISRO equipment.
Financial performance: Revenue surged 27% annually between FY21 and FY23 to Rs 984 crore, while operating profit before depreciation and amortisation – Ebitda – rose 22% yearly to Rs 222 crore, maintaining a margin of 22.6%. Net profit escalated to Rs 152 crore from Rs 96 crore during the period, marking a 26% increase.
Given that Inox India is financially sound with no debts and a history of dividend payouts, the IPO could attract investor interest, says an ET analysis.
Inox India: Financials, business operations & more
Business operations: Inox India operates three plants in India, producing cryogenic tanks vital for sub-zero temperature applications. It has a capacity of 3,100 equivalent tank units and 2.4 million disposable cylinder units. It’s constructing a new Rs 200 crore plant using internal funds. Revenue streams include 78% from industrial gases such as oxygen, nitrogen and argon, 25% from LNG tanks, and the remainder from cryo-scientific applications for ISRO equipment.
Financial performance: Revenue surged 27% annually between FY21 and FY23 to Rs 984 crore, while operating profit before depreciation and amortisation – Ebitda – rose 22% yearly to Rs 222 crore, maintaining a margin of 22.6%. Net profit escalated to Rs 152 crore from Rs 96 crore during the period, marking a 26% increase.
Inox India IPO
Risks and valuation: Around 56% of revenue stems from the top 10 clients, with half of the orders being repeat orders, posing a risk if orders are canceled or delayed. Fluctuations in raw material costs, constituting 65% of total revenue, could affect margins.
With a P/E multiple of 29 times annualized net profit for H1 of FY24, Inox India doesn’t have direct comparables in India. However, global peers CIMC Enric and Chart Industries trade at lower P/Es (10 and 21, respectively), while Indian counterparts like L&T and GMM Pfaudler trade at 30-45 times 1-year forward earnings.
