Tolins Tyres IPO opens on September 9: Check price band, lot size, business model & more

Tolins Tyres Limited announced the price band for its initial public offering (IPO) on Tuesday, September 3. The IPO price band has been fixed at ₹215 to ₹226.

The mainboard public offer is scheduled to open for subscription on September 9. The tyre manufacturer aims to raise ₹230 crore through the IPO.

Ahead of the opening of the subscription window, here are key details to know about Tolins Tyres IPO:

Tolins Tyres IPO: Offer size, price band, lot size and minimum investment

Tolins Tyres IPO consists of fresh issue of 88 lakh shares worth ₹200 crore and an offer-for-sale (OFS) portion of 13 lakh shares, aggregating to ₹30 crore.

Tolins Tyres IPO price band has been fixed at ₹215 to ₹226 per share. Retail investors interested in applying for Tolins Tyres IPO can place bids for a minimum lot size of 66 shares, amounting to an investment of ₹14,916.

Small non-Institutional Investors (sNIIs) can place bids for a minimum of 14 lots, or 924 shares, aggregating to an investment of ₹2,08,824. Big non-Institutional Investors (bNIIs) can place bids for a minimum of 68 lots, or 4,488 shares, which aggregates to an investment of ₹10,14,288.

Tolins Tyres has reserved 50% of the net offer for Qualified Institutional Buyers (QIBs) and 35% for the retail category. The remaining 15% of the net issue has been set aside for the NIIs.

Tolins Tyres IPO: Subscription, allotment status and listing date

Tolins Tyres IPO will remain open for subscription from September 9 to September 11. Tolins Tyres IPO share allotment status is likely to be decided on Thursday, September 12. Refunds will be initiated for unsuccessful bidders on September 13 and the allottees will receive the shares in their demat accounts the same day.

Tolins Tyres IPO listing date has been tentatively fixed as September 16. Shares of Tolins Tyres Ltd will be listed on the NSE and BSE.

Tolins Tyres: Key financials

Tolins Tyres’ consolidated revenue from operations for the fiscal year ended March 31, 2024, stood at ₹227.02 crore. The company reported a consolidated net profit of ₹26 crore in FY24. The company’s net worth stood at ₹100.53 crore in FY24.

Tolins Tyres’ standalone revenue from operations grew more than 4% to ₹118.24 crore in FY23 compared to ₹113.36 crore in FY22. The company’s standalone PAT increased more than 758% to ₹4.74 crore in FY23 compared to ₹55.31 lakh in FY22.

Tolins Tyres : Business model and competitors

Tolins Tyres’ business is divided into two verticals: Tyre manufacturing and Tread Rubber manufacturing. The company manufactures Light Commercial Vehicle Tyres, off-road/Agriculture Tyres (OTR), Two-wheeler and three-wheeler tyres, tyre tubes and tyre flaps, Precured Tread Rubber (PCTR), conventional tread rubber, bonding gum, vulcanising solution, rope rubber, and others.

The company operates 8 depots and has 3,737 dealers across India. It has three manufacturing facilities, two of which are located in Kalady, Kerala, and its third facility is located in Ras Al Khaimah, UAE.

In the domestic market, Tolin Tyres’ major competitors include MRF, JK Tyre, and Apollo Tyres as well as international brands such as Michelin, Goodyear Tire and Rubber Company and Bridgestone Corporation, according to the company’s Red Herring Prospectus (RHP).

Tolins Tyres: Strengths and risks

• Tolins Tyres Limited manufactures a wide product range, offering both tyres and tread rubber and caters to diverse customer requirements giving the company a competitive edge.
• Tolins Tyres has accreditations such as ISO 9001:2015 and IATF 16949:2016 which increase client loyalty and confidence.
• The company has been in operation for over thirty years and has established relationships with major Original Equipment Manufacturers (OEMs).
• The company’s three manufacturing facilities have backward integration capabilities covering raw materials, design, and production processes.

• Tolins Tyres Limited is heavily dependent on a limited number of suppliers for raw materials such as rubber compounds, carbon black, and nylon fabrics. A disruption in the supply chain could adversely affect production.
• The lack of long-term contracts with suppliers exposes the company to price volatility and negotiating challenges, which can, in turn, impact its profit margins.
• Automotive original equipment manufacturers (OEMs) deals make up a significant part of Tolin Tyres’ revenue, and the business's dependency on OEMs makes it vulnerable to fluctuations in the automotive sector.
• The company's manufacturing facilities are exposed to various technical risks, such as equipment failure, industrial accidents, and natural disasters.

Tolins Tyres IPO: Objective

Tolins Tyres plans to use the funds raised via its public issue for repayment and/or prepayment of some of its outstanding loans. The money will also be used for long-term working capital requirements of the company. A portion of the proceeds will also be invested in the company’s subsidiary, Tolin Rubbers Private Limited and for general corporate purposes.

About Tolins Tyres

Tolins Tyres was incorporated in 2003. The company is a tyre manufacturer and also provides retreading solutions. The company exports its products to 40 countries, including the Middle East, East Africa, Jordan, Kenya and Egypt. The company's sales and marketing team comprised 55 employees, including contract workers, as of March 31, 2024.