Sundrex Oil IPO Opens: Why Retail Investors Should Care

The initial public offering of Sundrex Oil Company is now open for subscription, with the issue entering the market amid subdued pre-listing expectations. The company is engaged in the manufacturing and wholesaling of industrial and automotive lubricants, greases, and specialty oils.

About the IPO

The Rs 32.25 crore IPO is a book-built issue and consists entirely of a fresh issue of shares. The price band has been fixed at Rs 81 to Rs 86 per share, valuing the company at around Rs 115 crore at the upper end. The issue will close on December 24, with the stock scheduled to list on the NSE SME platform on December 30.

Investment Details

For retail investors, the minimum application size is 3,200 shares, translating into an investment of Rs 2.75 lakh at the upper price band. The IPO structure is largely retail-driven, with nearly 56% of the issue reserved for retail investors, while non-institutional investors have been allocated about 37%. Qualified institutional buyers account for a small portion of the issue.

Company Performance

Financially, the company has posted strong growth in recent years. Revenue rose 41% year-on-year in FY25 to Rs 69.12 crore, while profit after tax more than doubled to Rs 5.44 crore. Operating margins improved sharply, with EBITDA margins reaching nearly 14%.

Use of Proceeds

The proceeds from the issue will be primarily used to fund working capital requirements, along with a small allocation towards capital expenditure and partial repayment of borrowings.

Market Outlook

While the lack of a grey market premium suggests limited expectations of listing gains, market participants note that SME IPO performance has been uneven this year, with investors increasingly focusing on business sustainability and balance sheet strength rather than short-term listing pop.

Remember, this is perspective, not prediction. Do your own research before making any investment decisions.