Inox India Limited IPO Summary

About the Company: The company is a part of the Inox Group which operates the below companies:

Incorporated in 1976, the company is supplier of cryogenic equipment in India & it is the largest supplier of cryogenic equipment in India by revenue in Fiscal 2023. Company has over 30 years of experience offering solutions across design, engineering, manufacturing and installation of equipment and systems for cryogenic conditions. The company offering includes standard cryogenic tanks and equipment, beverage kegs, bespoke technology, equipment and solutions as well as large turnkey projects which are used in diverse industries such as industrial gases, liquified natural gas (“LNG”), green hydrogen, energy, steel, medical and healthcare, chemicals and fertilizers, aviation and aerospace, pharmaceuticals and construction.

The company’s business comprises of three divisions:

1. Industrial Gas: This division manufactures, supplies and installs cryogenic tanks and systems for storage, transportation and distribution of industrial gases such as green hydrogen, oxygen, nitrogen, argon, carbon dioxide (CO2), hydrogen and provides after-sales services. The company also provides engineering, procurement and construction (“EPC”) services for cryogenic solutions including bulk storage and regasification equipment, typically associated with petrochemical or steel projects.
2. LNG: This division manufactures, supplies and installs standard and engineered equipment for LNG storage, distribution and transportation as well as small-scale LNG infrastructure solutions suitable for industrial, marine and automotive applications.
3. Cryo Scientific: This division provides equipment for technology intensive applications and turnkey solutions for scientific and industrial research involving cryogenic distribution.

The segmental and geographical bifurcation of the revenue can be observed in the below table:

The company has turned its focus on large turnkey margin accretive projects because of better margins as there is limited competition for these projects, the economies offered by their scale and the large engineering and customization elements to these types of projects.

The order book of the company comprises ₹10,366.09 million as on September 30, 2023. The bifurcation of the same is as under:

Industrial Overview:

Global cryogenic equipment industry

Industrial gases are used in industrial processes for manufacturing products in a wide range of industries, including oil and gas, petrochemicals, chemicals, power, mining, metals, pharmaceuticals, electronics, glass and aerospace. 

Nitrogen, oxygen and natural gas are the major gases which would account for almost 80% of the cryogenic equipment demand. 

The global cryogenic equipment market was valued at US$11.5 billion in Calendar year 2022. The global cryogenic equipment demand is projected to grow at CAGR of 6.9% from calendar year 2023 to calendar year 2028, according to the CRISIL Report. Demand for cleaner fuels, such as LNG and hydrogen will drive the uptake of cryogenic equipment across geographies.

Global cryogenic equipment industry by types of cryogenic equipment:

Global cryogenic equipment industry by end-user industry:

Global cryogenic equipment by geographical segments:

IPO Objectives: 

The company will not receive any proceeds from the Offer.

The Company’s revenue from operations increased from Rs. 593.79 crores in FY 2020-21 to Rs. 965.90 crores in FY 2022-23 indicating a CAGR growth of 27.54%.
The company's EBITDA expanded from Rs. 149.69 Crores in FY 2020-21 to Rs.222.65 Crores in FY 2022-23, with a CAGR of 21.96%. However, the company’s EBITDA margin has decrease from 25.21% in FY 2020-21 to 23.05% in FY 2022-23. 

The company's Net Profit expanded from Rs. 96.10 Crores in FY 2020-21 to Rs. 152.71 Crores in FY 2022-23. However, the company’s Net Profit margin has slightly decrease from 16.18% in FY 2020-21 to 15.81% in FY 2022-23. 

The company's ROCE has improved from 35.15% in FY 2020-21 to 36.53% in FY 2022-23. The ROE has increased from FY 2020-21 to FY 2022-23 being 25.87% in FY 2020-21 to 27.79% in FY 2022-23. 

Valuation: The company's price-to-earnings ratio stands at 39.22 while the price-to-book ratio stands at 10.90, the company in its RHP states that it has no listed peers in India. Peer Comparison: There are no listed companies in India that engage in a business similar to that of Company. Accordingly, it is not possible to provide an industry comparison in relation to the Company. 

Key Risks: 

1. Revenue Concentration: Its revenue inflows are dependent on a limited number of customers, any adverse situation or delay from the debtor’s end might affect the company’s operations and profitability.

2. Cryogen leakage: Cryogen leakage from equipment poses health hazards and the company’s products face inherent risk due high pressures and low temperatures at which many of the company’s cryogenic products are use and the inherent risks associated with concentrated industrial and hydrocarbon gases.

IPO Details: