Telangana-based Standard Glass Lining Technology Limited files DRHP for IPO

Telangana-based Standard Glass Lining Technology Limited, one of the top five specialized engineering equipment manufacturers for pharmaceutical and chemical sectors in India, in terms of revenue in Fiscal 2024, has filed its draft red herring prospectus (DRHP) with capital market regulator Securities and Exchange Board of India (SEBI) to mop up funds through an initial public offering (IPO). 

The IPO, with a face value of ₹10 each, is a mix of fresh issuance of Rs 250 crore and an offer for sale of up to 18.44 million equity shares by promoters and Other Selling Shareholders.

The offer for sale consists of up to 5.20 million equity shares by M/s S2 Engineering Services, up to 4.90 million equity shares by Kandula Ramakrishna, up to 4.13 million equity shares by Kandula Krishna Veni, up to 7.65 lakh by Nageswara Rao Kandula, up to 5.04 lakh equity shares by M/s Standard Holdings, up to 5 lakh equity shares by Katragadda Venkata Ramani, 3.50 lakh equity shares by Venkata Siva Prasad Katragadda, up to 4.50 lakh equity shares by Venkata Sandeep Gopineedi, up to 3.50 lakh equity shares by Mahitha Katragadda, up to 3.50 lakh equity shares by Katragadda Harini.

The company, in consultation with the book-running lead managers, may consider an issue of specified securities, aggregating to Rs 50 crores as pre-IPO placement shall not exceed 20% of the size of the fresh issue. If such placement is completed, the fresh issue size will be reduced. 

The offer is being made through the book-building process, wherein not more than 50% of the offer shall be available for allocation on a proportionate basis to qualified institutional buyers, not less than 15% of the offer shall be available for allocation to non-institutional bidders, and not less than 35% of the offer shall be available for allocation to retail individual bidders.

The proceeds from its fresh issuance to the extent of Rs 10 crore will be utilized for funding of capital expenditure requirements of our Company towards purchase of machinery and equipment; Rs 130 crore for repayment or prepayment, in full or in part, of all or a portion of certain outstanding borrowings availed by the Company and investment in its wholly owned Material Subsidiary, S2 Engineering Industry Private Limited, for Repayment or prepayment, in full or in part, of all or a portion of certain Outstanding borrowings availed by S2 Engineering Industry Private Limited, from banks and financial institutions; Rs 30 crore for Investment in its wholly owned Material Subsidiary, S2 Engineering Industry Private Limited, for funding its capital expenditure requirements towards purchase of machinery and equipment; Rs 20 crore for funding inorganic growth through strategic investments and/or acquisitions; and general corporate purposes.

Standard Glass Lining Technology offers comprehensive solutions that encompass design, engineering, manufacturing, assembly, installation, and commissioning, as well as establishing standard operating procedures for pharmaceutical and chemical manufacturers on a turnkey basis.

Its product portfolio includes essential equipment used in the production of pharmaceutical and chemical products, categorized into Reaction Systems; Storage, Separation, and Drying Systems; and Plant, Engineering, and Services. As of March 31, 2024, the portfolio consisted of more than 65 products and offerings. Over the last decade, it has delivered more than 11,000 products.

According to the DRHP, the company ranks among India’s top three manufacturers of specialized engineering equipment made from glass-lined, stainless steel, and nickel alloy based on revenue in Fiscal 2024. Additionally, it is one of the top three suppliers of polytetrafluoroethylene (PTFE) lined pipelines and fittings in India for the same period. Over the past three fiscal years, it has been the fastest-growing company in its industry in terms of revenue.

The company has  443 customers, including end-users in the pharmaceutical, chemical, paint, biotechnology, and food and beverage sectors. As of June 30, 2024, their notable customers include 30 out of approximately 80 pharmaceutical and chemical companies in the NSE 500 index. Some of its pharma clients include the likes of Aurobindo Pharma Limited, Cadila Pharmaceutical Limited, Deccan Fine Chemicals (India) Private Limited, Laurus Labs Limited, Granules India Limited, Macleods Pharmaceuticals Limited, Natco Pharma Limited, Piramal Pharma Limited, Suven Pharmaceuticals Limited, and Tagros Chemicals India Private Limited.

The company has entered into an agreement with HHV Pumps Private Limited (“HHV”), for the supply of vacuum pumps along with a private label arrangement. It also has a supply and purchase arrangement for India with Japan-based Asahi Glassplant Inc. and GL Hakko Co. Ltd (“GL Hakko”) for procurement of specified grades of glass for its glass lining division.

Standard Glass Lining Technology's revenue from operations increased by 9.26% from ₹497.59 crore in fiscal 2023 to ₹543.67 crore in fiscal 2024, primarily due to an increase in the overall quantity of products sold; increase in sale prices of its products; increase in sale of services and comprehensive maintenance contracts; Profit after tax increased by 12.33% from ₹ 53.42 crore in fiscal 2023 to ₹ 60.01 crore in fiscal 2024.

IIFL Securities Limited and Motilal Oswal Investment Advisors Limited are the book-running lead managers and KFin Technologies Limited is the registrar of the offer. The equity shares are proposed to be listed on BSE and NSE.