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Standard Glass Lining Technology Initial Public Offering is set to launch on 6 January 2025. Standard Glass Lining Technology is a market leader in the manufacturing of specialised engineering equipment for the pharmaceutical and chemical sectors in India. Through Standard Glass Lining IPO review, we try to understand the company’s business model and valuations.
As per the F&S Report, Standard Glass Lining Technology is among the top five specialised engineering equipment manufacturers for the above-mentioned sectors, in terms of revenue in Fiscal 2024. They offer end-to-end engineering solutions including design, engineering, manufacturing, assembly, installation and commissioning solutions.
Table of Contents
Our report covers Financial Analysis, Market Analysis and Fundamental Analysis of the company, to help you make an informed decision before the IPO.
Before we begin, let’s look at the company’s objectives. The company intends to utilise the proceeds from the fresh issue for the following purposes:
|  Objective  |  Fund Allocation |
| Purchasing Machinery & Equipment | INR 10 crore |
| Debt Reduction  | INR 130 crore |
| Subsidiary Investment (S2 Engineering) | INR 30 crore |
| Strategic Investments | INR 20 crore |
| Remaining  | For General Purposes |
Standard Glass Lining IPO Review – Financial Analysis
Analysis of Standard Glass Lining’s financial statements, as provided in their RHP or Red Herring Prospectus, uncovered numerous positive insights showcasing its long-term financial health.
Below are a few major aspects to consider for investors:
- Asset Growth: Total Assets grew by over 200% since 2022 from INR 298.11 crore as of 31 March 2022, to INR 756.52 crore as of 30 September 2024.
- Positive Capital Utilisation: Capital utilisation for ongoing projects and growth increased from INR 0.70 crore in March 2022 to INR 45.23 crore by September 2024.
- Reduced Reliance on Debt: Standard Glass Lining financials also implies reduced dependence on debt and borrowings. As of 2024, the ratio of total equity with respect to total assets is balanced at 59%.
Moreover, other factors that make the Standard Glass IPO more attractive, are their market positioning and domestic as well as global developments which we cover below in Market Analysis.
Standard Glass Lining IPO Review – Market Analysis
A detailed market analysis enables investors to understand how the industry growth impacts the company’s growth as well as the extent of it. Let’s understand these factors in detail :
- Market Leader: Standard Glass Lining Technology is a market leader specializing in engineering equipment manufacturing for the pharmaceutical and chemical sectors in India. It has a market share of 16.7% in India’s Glass Lined Equipment (GLE) market. Also, the company has evolved its product portfolio to include end-to-end engineering solutions.
- Strong Financials: The company’s financial statements show a robust and consistent revenue growth over the years, proving a strong demand for its products. Also, offering specialized and industry-customized solutions, the profit margins in the engineering equipment segment for pharma and chemicals are comparatively high.
- Upcoming Industry Opportunities: Considering the government’s intention to fast-track schemes like the Production Linked Incentive (PLI), it is expected that the pharmaceutical and chemical sectors in India to grow rapidly. The Government of India has committed over INR 2 lakh crores for all the eligible sectors combined.
- Renowned Client Base: Standard Glass Lining Technologies maintains its strong industry reputation serving renowned clients in the pharmaceutical as well as chemical industries, including Aurobindo Pharma, Laurus Labs, Granules India, and Piramal Pharma.
- Decent IPO Pricing: The IPO’s price band (INR 133 – 140) seems reasonable, especially if compared to peers in the engineering equipment sector with similar growth trajectories. Strong potential for re-rating post-listing, particularly if the company demonstrates sustained revenue and profit growth.
Standard Glass Lining IPO Review – Fundamental Analysis
We at IPO Central believe in strong fundamentals as it not only shows the company’s financial strength but also enables investors to compare the same with other industry leaders.
A comparative fundamental analysis helps in gauging a company’s growth potential as well as understanding various risks an investor needs to be wary of before investing.
Below is a detailed Fundamental Analysis of Standard Glass Lining Technologies:
- P/E Ratio: The company’s pre-issue Price to Earnings Ratio is 39.8 at the higher end of the price band on the basis of FY 2024 earnings. After annualising FY 2025 earnings and taking the equity dilution in effect, the P/E ratio turns out to be 38.5. With these valuations, Standard Glass Lining appears to be a strong investment. Compared with its peers like GMM Pfaudler, which has a P/E ratio of 55.7, Standard Glass Lining has a huge potential for growth post-IPO.
- RONW (Return on Net Worth): With a Return on Net Worth of around 20.7%, Standard Glass Lining has industry leading numbers. While this is inline with GMM Pfaudler, Standard Glass Lining leaves other players HLE Glasscoat and Thermax far behind.
- Debt-to-Equity Ratio: Considering the present D/E ratio of 0.32 and the objective of allocating INR 130 crore towards Debt payment from the proceeds of the IPO, the Debt-to-equity ratio is expected to be reduced to around 0.06. This will reduce the company’s debt obligations and provide more room for business expansion as well as reduce risk.
Conclusion
Conclusively, all the factors taken into consideration above, make the Standard Glass Lining Technologies IPO quite attractive, not only for long-term investors but even for short-term investors. Also, assuming broader market conditions remain as per the expected considerations, the IPO has a high return potential.
However, one should actively assess any unprecedented risks, such as sectorial cyclicality or potential challenges in executing further growth strategies.
