Lohia Corp IPO: ₹1,100 Crore Issue Open Until July 27

Lohia Corp’s initial public offering, valued at ₹1,100 crore, is currently open for subscription and will close on July 27. This IPO is structured as an offer for sale, with existing promoters and public shareholders divesting a portion of their holdings.

The company specializes in manufacturing machinery for woven Raffia, a material essential for industrial packaging. Lohia Corp holds a 41% market share in India and is the world’s second-largest player with a 15% global share.

Key Financials (FY24-26)

Revenue compound annual growth rate (CAGR): 21%

Net profit compound annual growth rate (CAGR): 159%

EBITDA margins increased from 9% to 19.5%

Net profit margins rose from 2.5% to 11.7%

Return on Capital Employed (RoCE) grew from 10.5% to 40.9%

Lohia Corp maintains a net debt-to-equity ratio of 0.2x, effectively operating as net debt-free when considering its liquid mutual fund investments.

Market Position and Risks

The IPO values Lohia Corp at approximately ₹4,500 crore, trading at 22 times its trailing earnings, a valuation comparable to other firms in the capital goods sector.

Potential investors must consider inherent risks, including the cyclical nature of the technical textiles sector. Demand for its products fluctuates with broader industrial activity.

Future environmental regulations impacting plastic packaging could also pose a challenge for the company. Lohia Corp’s current capacity utilization stands at about 50%.

Future growth hinges on increasing this utilization and successfully adapting to evolving international standards for plastic packaging. The company aims for an equal split between Indian and international revenue, shifting from the current 58% domestic share.