Tolins Tyres IPO: Explore Key Details from Offer Size to Structure and Financials
Kerala-based Tolins Tyres Limited is all set to make its D-street debut on 9th September. The company’s IPO consists of a fresh issue and an offer for sale. If you are looking forward to subscribing to the IPO of Tolins Tyres Limited, read the below blog article first.
About Tolins Tyres Limited
Tolins Tyres Ltd has established itself as a major tyre retreading solutions provider across India, manufacturing new tyres and tread rubber. The company's major products include tyres for two-wheelers, three-wheelers, light commercial vehicles, agricultural tyres, pre-cured tread rubber, and other accessories, including bonding gum, tyre flap, vulcanising solutions, etc.
The company commenced operations in 1982 as a proprietorship concern for the manufacture of tread rubber. It was incorporated as a company in 2003 and commenced production and sales in 2005. Since then, it has been one of the leading players in the manufacturing of retreading products owing to its continued excellence and innovative abilities.
Tolins Tyres Limited IPO Details
The table captures key details of Tolins Tyres IPO:
| Particulars | IPO Details |
|---|---|
IPO opens on | 9th September |
IPO closes on | 11th September |
Fresh issue size aggregates up to | ₹ 200 crores |
Offer for sale aggregates up to | ₹30 crores |
Total issue size | ₹230 crores in the upper price band |
Price range | ₹215 to ₹226 |
Lot size | 66 |
Minimum investment amount | ₹14916 |
Face value | ₹5 |
Book running lead manager | Saffron Capital Advisors Pvt Ltd |
IPO registrar | Cameo Corporate Services Ltd |
Use of IPO proceeds
Tolins Tyres Ltd intends to utilise the funds raised through the IPO for:
- Repayment and/or prepayment, in full, of certain outstanding loans availed by it
- Augmentation of long-term working capital requirements
- Investment in its wholly-owned subsidiary, Tolin Rubbers Private Limited
- General corporate purposes
Financial snapshot of Tolins Tyres Ltd
Tolins Tyres Ltd is a profitable company in the retreading and tyre manufacturing space. Its profit after tax (PAT) has grown at a CAGR of 541.98% between fiscal 2022 (on a standalone basis) and fiscal 2024 (on a consolidated basis). Here are some other financials of the company across different financial years:
| Particulars | As on March 31, 2024 (Consolidated) | As on March 31, 2023 (Standalone) | As on March 31, 2022 (Standalone) |
|---|---|---|---|
Total equity and liabilities (in ₹ crores) | 221.598 | 83.824 | 99.142 |
Total income ( in ₹ crores) | 228.693 | 119.679 | 114.386 |
Total expenses ( in ₹ crores) | 195.795 | 112.652 | 113.532 |
Basic and diluted EPS (in ₹) | 9.52 | 2.55 | 0.35 |
Gross profit (in ₹ crores) | 63.074 | 23.682 | 18.462 |
Return on equity | 25.87% | 25.70% | 5.83% |
Tolins Tyres Ltd IPO Offer Structure
Here’s how much of the offer is allotted for different categories of investors:
| Investor type | Offer allocation |
|---|---|
Qualified institutional bidders | Not more than 50% of the offer |
Non-institutional bidders | Not less than 15% of the offer |
Retail individual bidders | Not less than 35% of the offer |
Competitive strengths of Tolins Tyres Ltd
Following are the competitive strengths of Tolins Tyres Ltd, which also form the basis of its offer price:
- Diversified product range and customised product offering
- Quality of products
- Long-standing relationship with large OEMs and dealer networks in India and its depots
- Integrated manufacturing operations coupled with in-house products and process design capabilities offering scale, flexibility and comprehensive solutions
- Locational advantage
- Research and development and product development capabilities
- Experienced and dedicated management team
Business strategies
Tolins Tyres Ltd has earmarked the following business strategies:
- Optimise capacity utilisation
- Expand the reach of domestic markets
- Expand product range by introducing new products
- Penetrate new geographies through increasing exports
- Strengthen relationships with its existing customers and expand customer base
- Continue to improve operational efficiencies through economies of scale, supply chain rationalisation, technology enhancements and effective resource planning
- Improve efficiencies with technology enablement
- Pursue inorganic growth through selective acquisitions
Industry overview
CRISIL MI&A forecasts overall tyre exports to increase by 7-9% in fiscal 2029, with the two-wheeler tyre segment leading the growth. Indian two-wheeler OEMs' strong market presence in African and Latin American countries, along with the enhanced reputation of Indian tyre brands, will support this expansion.
The competitive performance and affordability of Indian tyres, combined with a global shift towards diversifying supply chains away from China, have positively impacted export growth. The establishment of manufacturing units by Indian OEMs abroad has also boosted the acceptance of Indian tyres in international markets. Moreover, increased investments in technology and innovation are expected to, further, solidify the position of Indian tyre manufacturers globally.
Wrapping it up
Before investing in the IPO of Tolins Tyres Ltd, analyse your financial goals and risk tolerance. Make sure the IPO fits into your overall financial strategy. Go through the red herring prospectus for a complete picture of the company.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.
Investments in securities market are subject to market risks, read all the related documents carefully before investing. Please read the SEBI prescribed Combined Risk Disclosure Document prior to investing. Brokerage will not exceed SEBI prescribed limit.
