Inox India IPO opens today; should you subscribe?

initial public offering (IPO) for Ix India (IxCVA) opens for subscription on Thursday for three days until December 18. company is offering its shares within fixed price range of Rs 627–660 a share, with a lot size of 22 shares and multiples reof.

IPO aims to generate funds solely through offer-for-sale (OFS) route, with promoters and or selling shareholders divesting ir shares, implying that company itself won't receive any proceeds from this issuance.

Ahe of IPO, IxCVA secured Rs 437.8 crore from anchor investors, finalising allocation of 66,33,285 equity shares at Rs 660 apiece. table global investors such as Abu Dhabi Investment Authority, mura Trust, Goldman Sachs, Carmignac Portfolio, HSBC Global, Volro Venture, and Natixis International Funds have alrey invested in company through anchor book.

About company

Established in 1976, Ix India specialises in supplying cryogenic equipment, particularly tanks, offering solutions for cryogenic conditions' equipment, from design and engineering to manufacturing and installation.

IxCVA's specialisation extends to providing bever kegs, customised techlogy, and turnkey projects, catering to a wide array of industries including industrial gases, liquefied natural gas, green hydrogen, energy, and more. As of September 2023, company has serviced 66 countries, spanning from United States and Saudi Arabia to Nerlands and Australia.

IPO reservations

offering has an allocation of 50 per cent to qualified institutional bidders (QIBs), 15 per cent to n-institutional investors, and remaining 35 per cent to retail investors. 

With ICICI Securities and Axis Capital leing book-running and Kfin Techlogies handling registrar duties, IxCVA's shares are set to be listed on both BSE and NSE on December 21, post-closure of IPO bid on December 18.

Should you subscribe? 

Nirmal Bang broker recommends subscribing to issue on investment rationale that company has strong financial performance, a large portfolio of specialised cryogenic equipment engineered to global quality standards, and a rising demand for cleaner fuels such as LNG and hydrogen due to focus on reducing carbon emissions from conventional energy sources.

"Ix is among top 10 companies globally and largest in India in business of manufacturing complex cryogenic solutions, which are highly critical for user industries. This is reflected in company’s superior EBITDA margins at over 21 per cent, much higher than aver of listed capital goods players. Combined with strong asset returns of 1.4–1.8x historically, Ix has consistently delivered ROCE of over 30 per cent in recent years," broker firm said. 

" increasing importance of green fuels like liquid hydrogen and preference for LNG over diesel is leing to robust topline growth for Ix. Revenue grew by 14 per cent CAGR over FY20–23 and by 16 per cent in H1FY24. This growth is broly in line with listed Capital Gods players. Ix is valued at 29x H1FY24 annualised EPS, which we believe leaves some scope for listing gains. Thus, we recommend subscribing to issue," it said.