Tolins Tyres IPO Lists at ₹228, Surges 0.8% Over Issue Price

Tolins Tyres, a tyre manufacturing company providing retreading solutions, made a muted debut on the Indian stock market on Monday, 16th September 2024, with its shares listing at a slight premium to the issue price. The company's initial public offering (IPO) had generated robust demand from investors during its subscription period, but the listing was below market expectations.

Listing Details

• Listing Price: Tolins Tyres shares were listed at ₹228 per share on the National Stock Exchange (NSE), marking a tepid start to its journey as a publicly traded company. On the Bombay Stock Exchange (BSE), the stock opened slightly lower at ₹227 per share.
• Comparison to Issue Price: The listing price represents a small premium over the IPO issue price. Tolins Tyres had set its IPO price at ₹226 per share.
• Percentage Change: The listing price of ₹228 on the NSE translates to a premium of 0.8% over the issue price of ₹226.

First-Day Trading Performance

• Opening vs. Latest Price: Following its muted opening, Tolins Tyres' share price gained momentum. By 11:21 AM, the stock was trading at ₹239.40, up 5% from its opening price and hitting the upper circuit.
• Market Capitalisation: As of 11:21 AM, the company's market capitalisation stood at ₹945.84 crore.
• Trading Volume: The traded volume was 17.09 lakh shares with a traded value of ₹39.79 crore, indicating significant investor interest on the first day of listing.

Market Sentiment and Analysis

• Market Reaction: Despite the muted listing, the market reacted positively to Tolins Tyres during early trading. The post-listing gains indicate investor confidence in the company's prospects.
• Subscription Rate: The IPO was oversubscribed by 23.87 times, with non-institutional investors leading at 27.41 times subscription.
• Grey Market Premium: Prior to listing, shares were trading at a premium of about 13% in the grey market, which did not materialise at listing.

Growth Drivers and Challenges 

Expected drivers of future performance:

• Strong presence in tyre manufacturing and retreading solutions
• Exports to over 40 countries, including Middle East and East Africa
• Diversified product portfolio across various vehicle segments

Potential challenges:

• Competition in the tyre industry
• Fluctuations in raw material prices
• Dependence on automotive sector performance

Utilisation of IPO Proceeds 

Tolins Tyres plans to use the funds for:

• Repayment or prepayment of certain outstanding loans
• Augmenting long-term working capital requirements
• Investment in subsidiary Tolin Rubbers Private Limited
• General corporate purposes

Financial Performance 

The company has demonstrated strong financial growth:

• Revenue increased from ₹118 crore in FY23 to ₹227 crore in FY24
• Net Profit rose from ₹4.99 crore in FY23 to ₹26 crore in FY24

As Tolins Tyres begins its journey as a listed entity, market participants will closely monitor its ability to leverage its position in the tyre industry to drive future growth and shareholder value. The initial post-listing gains suggest that investors may be looking beyond the muted debut to focus on the company's long-term prospects in the growing automotive and retreading sectors.