December 13, 2023
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Inox India IPO Guidance
Inox is e the largest supplier of cryogenic equipment in India by revenue in Fiscal 2023. It has over 30 years of experience offering solutions across design, engineering, manufacturing and installation of equipment and systems for cryogenic conditions. Its offering includes standard cryogenic tanks and equipment, beverage kegs, bespoke technology, equipment and solutions as well as large turnkey projects which are used in diverse industries such as industrial gases, LNG, green hydrogen, energy, steel, medical and healthcare, chemicals and fertilizers, aviation and aerospace, pharmaceuticals and construction. In addition, it manufactures a range of cryogenic equipment utilised in global
scientific research projects. It also was the largest exporter of cryogenic tanks from India in terms of revenue in Fiscal 2023.
Let’s understand demand potential of cryogenic equipment across geographies. The demand is expected to be driven by the increased thrust for cleaner fuels such as LNG and hydrogen due to the focus on reducing carbon emissions from conventional energy sources. (Source: CRISIL Report, November 2023). & Inox is well positioned to capture this global market growth with its inhouse technology as well as its LNG product range that includes the entire value chain.
In hydrogen, its engineering teams are developing products and systems in complex industry environments like hydrogen storage, transportation and distribution to address the need for large scale movements of liquid hydrogen. It is the first Indian company to manufacture a trailer mounted hydrogen transport tank. Because of its expertise, the company produced and shipped one 238kl liquid hydrogen storage tank for a liquid hydrogen plant & four 311kl liquid hydrogen storage tanks for another customer in South Korea. Yes, to South Korea, which is the leading country in Engineering technology.
The company has provided its equipment and systems to 1,255 domestic customers and 254 international customers across its three divisions. During last 42 months, the company exported its products and delivered its services to 66 countries which include the United States, Saudi Arabia, the Netherlands, Brazil, Korea, United Arab Emirates, Australia and Bangladesh.
As mentioned above, Inox is the largest supplier of cryogenic equipment in India by revenues in Fiscal 2023. The global cryogenic equipment market was valued at $11.5 billion in CY2022, and global cryogenic equipment demand is projected to grow at a 6.9% CAGR from CY2023 to reach $16.6 billion by CY2028. The demand for cleaner fuels such as LNG and hydrogen due to focus on reducing carbon emissions from conventional energy sources will drive the uptake of cryogenic equipment across geographies.
Another growth potential is Liquid Hydrogen: Inox has supplied liquid hydrogen storage equipment in the United States for material handling applications. The hydrogen segment in India is expected to see strong growth with the GoI’s emphasis on developing a hydrogen economy in the country. According to the CRISIL Report, the Rocky Mountain Institute estimates a cumulative value of the green hydrogen market in India of US$8.0 billion by 2030 and US$340 billion by 2050. The key industries driving the demand for hydrogen would be refining, ammonia and methanol in the near term while steel production and heavy-duty trucking are expected to drive demand toward the latter end of the period, accounting for over 50% of the demand for green hydrogen. As the demand for hydrogen increases, it intends to leverage its experience in the small-scale LNG segment to develop a comprehensive product range that includes the entire value chain from the hydrogen terminal to storage and transportation and then distribution to the end-users
Its IPO size is Rs. 1459.32 crore comprises of Fresh issue of Capital and Offer for sale. IPO size net of Anchor portion is just of Rs.1021.52 Cr with Retail portion of Rs. 510.76 Cr and HNI portion of Rs. 218.89 Cr. So huge oversubscription is a sure thing.
Now let’s talk of financial part.
Inox has demonstrated consistent growth in terms of revenues and profitability. Its consolidated total income has increased at a CAGR of 27.13% from Rs 6,089.92 million in Fiscal 2021 to Rs. 9,841.99 million in Fiscal 2023. Its consolidated profit after tax has increased at a CAGR of 26.06% from Rs 961.07 million in Fiscal 2021 to Rs. 1,527.14 million in Fiscal 2023. The shares are offered at PE multiple of 26.40 based on the estimated EPS for the year 23-24.
So? There is room for huge listing gains and if you do not get allotment, buy on listing day and it can bring good returns in next 18 months. You may like to study latest GMP, click
So, our Guidance?? APPLY with full force.
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