Scoda Tubes IPO

Scoda Tubes Limited, incorporated in 2008, is an Indian manufacturer of stainless-steel tubes and pipes with over 14 years of experience. The company’s products fall into two main categories—seamless and welded tubes/pipes—offered under five product lines: stainless steel seamless pipes, seamless tubes, seamless “U” tubes, instrumentation tubes, and welded tubes and “U” tubes. These products are marketed under the “Scoda Tubes Limited” brand and cater to a broad customer base including engineering companies, EPC contractors, and industrial firms in sectors such as oil and gas, chemicals, fertilizers, power, pharmaceuticals, automotive, railways, and transportation.

Scoda Tubes operates a hot piercing mill to produce mother hollow, the key raw material for its seamless products, enabling backward integration and cost efficiency. The company’s manufacturing facility is strategically located on the Ahmedabad-Mehsana Highway in Rajpur, Kadi, Mehsana, Gujarat, providing excellent connectivity to key logistics hubs. As of fiscal 2024, Scoda Tubes supplied products to 49 stockists and exported to 16 countries, including the U.S., Germany, and Italy. Its distribution network includes authorized stockists in Maharashtra for domestic sales, a dedicated distributor in the U.S., and several partners across Europe, enhancing its global market presence.

Scoda Tubes IPO Strengths

• Scoda Tubes manufactures a wide range of stainless steel products, including seamless and welded pipes, tubes, ‘U’ tubes, heat exchanger tubes, and instrumentation tubes, catering to varied industrial applications.
• The company serves customers globally—including Europe, the USA, South Africa, and the Middle East—while maintaining a robust domestic market position in India.
• Scoda Tubes invests continuously in modern technology, such as a state-of-the-art piercing mill and bright annealing facility, enabling high-quality production and operational efficiency.
• Products are available in numerous sizes, grades, and specifications, and the company offers value-added services like precision cutting, bending, and custom packaging to meet specific client needs.
• Scoda Tubes is recognized as one of India’s most trusted stainless steel pipe and tube manufacturers, with a loyal customer base across oil & gas, petrochemicals, power, automotive, sugar, pharmaceuticals, and shipbuilding industries.
• The company prioritizes environmental protection, occupational health, and safety, with policies for pollution prevention, waste minimization, and continual improvement in EHS performance.
• Recent investments in new manufacturing projects and ongoing capacity expansion demonstrate a proactive approach to scaling up and meeting rising market demand.

Scoda Tubes IPO Risks

• The company relies on a limited network of stockists for sales and distribution. Any underperformance or termination of these relationships could materially impact revenue and market reach.
• Despite revenue growth, Scoda Tubes’ PAT margin remains modest at 4.58% in FY24, which limits the buffer against cost increases or demand slowdowns.
• Scoda Tubes’ business is sensitive to fluctuations in the prices of stainless steel and other key inputs. Sudden increases in raw material costs can erode margins and profitability.
• Exposure to potential product recalls or quality issues, especially given the critical applications of its products, could lead to financial losses and reputational damage.
• The business requires substantial working capital for inventory and receivables. Any disruptions in the supply chain or delays in customer payments could strain liquidity.
• A significant portion of sales comes from overseas markets. Geopolitical tensions, trade restrictions, or currency fluctuations could adversely impact export revenues and profitability.