Brokerages Weigh In On Stallion India Fluorochemicals IPO: Should You Subscribe?

Stallion India Fluorochemicals' initial public offering opened on January 16, and will close on January 20. Brokerages have weighed in with their recommendations on whether investors should subscribe. The company, a key player in the fluorochemicals industry, specialises in refrigerants and industrial gases, with its products catering to a range of industries including automotive, electronics, pharmaceuticals, and healthcare.

Stallion India Fluorochemicals has shown steady financial growth over the past few years. The company’s total income increased from Rs 186.34 crore in FY22 to Rs 236.23 crore in FY24, while its net profit saw a similar upward trend from Rs 14.79 crore in FY22 to Rs 21.11 crore in FY24, highlighted Bajaj Broking.

For the first half of FY25, the company reported a net profit of Rs 16.57 crore on total income of Rs 141.53 crore, signaling solid growth momentum.

In terms of valuation, the IPO is priced at a P/E ratio of 21.53 based on the annualised FY25 earnings, and 48.39 based on FY24 earnings, indicating a fair, but cautious valuation. Based on these metrics, Bajaj Broking suggests that the issue is reasonably priced for long-term investors, particularly as the company operates in a high-demand segment with room for future growth.

Both Bajaj Broking and Anand Rathi have recommended that investors subscribe to the IPO for the long term.

Bajaj Broking's recommendation is based on the company's strong market position. The brokerage said the company "has established a strong market position by offering high-quality, cost-effective products. Its strategic shift towards high-margin products is expected to enhance profitability."

Anand Rathi similarly took a "subscribe – long term" stance, and said, "the company holds a prominent position with a market share of 10% in the fluorochemicals industry. With its planned business strategy and capex mode, there is significant headroom to improve earnings in coming years."

Stallion India Fluorochemicals' IPO offers shares with a price band of Rs 85 to Rs 90, with an issue size of Rs 199.45 crore. The company aims to utilise the funds raised from the IPO for working capital requirements and capital expenditure for its facilities in Maharashtra and Andhra Pradesh. The listing is expected to take place on January 23, on both the Bombay Stock Exchange and National Stock Exchange.