Tolins Tyres Limited IPO: Review, Valuation, Date & GMP

Tolins Tyres IPO-Complete Overview

Tolins Tyres IPO a Mainboard IPO is a book-built issue of Rs.230 crore (10,176,992 Shares) by Tolins Tyres Ltd. The company was founded in 2003. The company produces tires and sells to 40 countries, including the Middle East, East Africa, Jordan, Kenya, and Egypt, and offers tire retreading services in India.

Two verticals to categorize the company's operations are:

• Tire production

• Production of tread rubber.

The company's market share is 0.06% in the Tyres category and 2.73% in the retread Tyres category.

Light commercial vehicle tires, off-road/agricultural tires (OTR), two- and three-wheeler tires, tire tubes and tire flaps, pre-cured tread rubber (PCTR), conventional tread rubber, bonding gum, vulcanizing solution, rope rubber, and other items are among the products offered by the company as of March 31, 2024.

The company produces a variety of goods, including tread rubber, tire flaps, bonding gum, vulcanizing solutions, light commercial vehicles, and two- and three-wheelers as well as agricultural tires.

As of March 31, 2024, 3,737 dealers nationwide were employed by the corporation, which also managed 8 depots. The company runs three manufacturing sites: the third is in the Al Hamra Industrial Zone in Ras Al Khaimah, United Arab Emirates, while the other two are in Mattoor, Kalady, Kerala.

The company's tread rubber category comprises 1,003 SKUs, while the tire category has 163 SKUs. The business has received several quality certifications from UK Certifications, including ISO 9001:2015 and IATF 16949:2016. Customers of the business include Tyre Grip, Redlands Motors, Kerala Agro Machinery Corporation Ltd (KAMCO), and Marangoni GRP, among others. By March 31, 2024, the business had produced 163 new designs and goods, along with molds for them.

This New IPO is to be launched on 09 September 2024, and its initial public offering will end on 11 September 2024.

Tolins Tyres IPO Overview

The Rs.230 crore Tolins Tyres Ltd. IPO comprises a combination of a fresh Issue of 0.88 crore Shares amounting to Rs.200 crore and an Offer for Sale (OFS) of 0.13 crore Shares amounting to Rs.30 crore out of which 35% is allocated to retail investors, 50% to institutional investors and 15% to non-institutional investors. 

The IPO date is from 09 September to September 11, 2024. The IPO listing is on Monday, September 16, 2024, and it will be held on the BSE and NSE. Tolins Tyres IPO price band is between Rs.215 to Rs.226 for each Share.

If You want to apply for the IPO, Click Here to Open a Demat Account.

Company Financial

Below is the synopsis of the company's financial data (Restated Consolidated) for the financial year that concluded on 31 March 2024.

• The total assets of the company are Rs.221.6 crore.

• The company’s total revenue is over Rs.228.69 crore.

• The company’s PAT is Rs.26.01 crore.

• The net worth of the company is Rs.100.53 crore.

• The company's EBITDA is Rs.46.37 crore.

 

(Amount in Crore)

 

Revenue Bifurcation

Below is the revenue breakdown (Restated Consolidated) for various activities.

(Amount in million)

 

Product-wise Revenue Bifurcation (Consolidated)

(Values in millions)

 

Sales-wise Bifurcation of Products (Consolidated)

(Values in nos. if not mentioned)

 

Market-wise Revenue Bifurcation of Products (Standalone)

(Values in millions)

 

Export-wise Revenue Bifurcation of Products (Consolidated)

(Values in millions)

 

The Objective of The Issue

The company desires to use the Net Proceeds from the Issue to fulfill its following goals:

• Payback or full payoff of some outstanding debts obtained by the company, including any associated recovery costs.

• An increase in the company's long-term working capital requirements

• Investment in Tolin Rubbers Private Limited, its fully owned subsidiary, to increase its working capital needs and repay or redeem in full some of its short- and long-term borrowings

• Corporate Purposes.

  

   

Peers of Tolins Tyres Ltd.

 

Note: The above comparison of listed peers is as per data by FY 2024.

 

Evaluation

The Tolins Tyres IPO Share price is between Rs.215 to Rs.226 for each Share.

Evaluation of P/E Ratio

Considering the FY 2024 (Consolidated), with an EPS of Rs.9.52 from the last year, the resulting P/E ratio is 23.74x.

Considering the weighted EPS of Rs.5.67 for the last three years, the P/E ratio is 39.86x.

Comparative Analysis with Listed Peers

The average P/E Ratio of the industry is 34.17x.

 

In simple words, the P/E ratio of Tolins Tyres IPO (23.74x), compared with the industry’s average P/E of 34.17x, has an undervaluation (on a P/E ratio basis only). Hence the price of the Share seems fairly priced for the investors when considered based on the average P/E ratio of the industry.

Note: The EPS and weighted EPS of the company are as of 31 March 2024 and the industry P/E Ratio is computed based on the closing market price of the Share as of 23 August 2024.

 

IPO's Strengths 

• Broadened product offering and tailored product provision

• Superior quality of products

• Long-standing partnerships with major OEMs, its depots' dealer network in India

• Combined with internal product and process design skills, integrated manufacturing operations provide scalability, flexibility, and all-encompassing solutions

• Geographical benefit

• Capabilities for product development and research and development

• A seasoned and committed management team

• Proven track record of expansion and financial success.

 

IPO’s Weaknesses 

• One of the main issues facing the tire business is the scarcity of sources for essential raw materials like carbon black and natural rubber. Furthermore, it connects with the company’s suppliers through purchase orders rather than long-term contracts. The fluctuations in raw material costs and availability, as well as any untimely delivery of raw materials by its suppliers or a deterioration in its relationship with them, may harm its business.

• A large amount of its agricultural tyre sales are reliant on its automobile original equipment manufacturer (OEM) clients.

• Its manufacturing facilities in India and outside play a critical role in the company's operations. Currently, Ras Al Khaimah, United Arab Emirates, and Kalady, Kerala, house its whole facility, infrastructure, and company operations. Any interruption to manufacturing facilities' operations, whether temporary or permanent, might have a significant negative impact on the company.

• The sale of bias tyres provides it with a percentage of its revenue, thus price pressure could negatively impact its profitability.

• In FY 2023, its financing activities resulted in negative cash flows, mainly from the proceeds of share sales and an increase in current borrowing.

 

Tolins Tyres IPO GMP Today

Tolins Tyres IPO GMP today has not started yet as of 03 September 2024.

 

Tolins Tyres IPO Timetable (Tentative)

The IPO open date is from September 09 to September 11, 2024, with IPO allotment on September 12, 2024, refund initiation on September 13, 2024, and listing on September 16, 2024.

 

Tolins Tyres IPO Details 

The IPO with a face value of Rs.5 per Share is set to start on September 09, 2024, close on September 11, 2024, and offers a total issue size of 10,176,992 Shares between Rs.215 to Rs.226 per Share with a Lot size of 66 Shares and will be listed at BSE and NSE.

 

Tolins Tyres IPO Lot Details 

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (66 Shares) amounting to Rs.14,916, and 13 Lots (858 Shares) amounting to Rs.1,93,908 respectively, while for HNI investors, the minimum Lot is 14 (924 Shares) amounting to Rs.2,08,824.

Tolins Tyres IPO Reservation

Promoters and Management of Tolins Tyres Ltd. 

• Kalamparambil Varkey Tolin

• Jerin Tolin

 

Tolins Tyres IPO Lead Managers

• Saffron Capital Advisors Private Limited.

 

Dividend Policy

The company has not paid any dividends during the last 3 FYs.

Conclusion

The company has experienced negative cash flow in operating and investing activities in the last few fiscal years. To fulfill its objectives, the company is currently conducting an IPO for the public.

We believe the information offered in this blog helps you learn about the company's financial performance. So this blog will be very useful to you if you are looking for information about the approaching IPO since it will give you reliable information about the company's, insights, financials, and past performance. If this informative blog piques your interest, you may be interested in reading our other related and useful posts on our website.

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

To Read the Prospectus of the Company Click Here to Download the DRHP.

Disclaimer: 

The content is purely for educational and information purposes only. We do NOT encourage/advise/suggest our active readers to be involved in any kind of buying or selling securities activities. Always consult your eligible financial advisor for investment-related decisions. The author does NOT through this blog intend to involve readers in trading.  

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