The Initial Public Offering (IPO) landscape is constantly evolving, bringing new opportunities for investors. Recently, the SME sector has seen increased activity, and Sundrex Oil Company Limited is set to join this dynamic segment. As a manufacturer and wholesaler of high-performance lubricants, Sundrex Oil is offering its shares to the public through a Book Building IPO. This detailed analysis aims to provide you with all the essential information needed to make an informed decision regarding this exciting new listing on the NSE SME platform.
Understanding Sundrex Oil Company Ltd.
Established in 2010, Sundrex Oil has carved a significant niche in the industrial and automotive lubricant market across India and neighbouring regions. Their core competency lies in producing high-quality greases and specialty products.
Core Business and Offerings
- Manufacturing and wholesale of industrial and automotive lubricants and greases.
- Diverse product portfolio including Hydraulic Oil, Gear Oil, Transformer Oil, and Diesel Engine Oil.
- Offers contract manufacturing, toll blending, and private labeling services, allowing other businesses to market products under their own brand.
- Employs a skilled workforce and operates with a focus on cost leadership through efficiency.
Key Strengths of the Company
- Robust in-house manufacturing capabilities supported by state-of-the-art quality control.
- Strategic operational locations providing logistical advantages.
- A direct sales model coupled with a well-diversified client base minimizes dependency risks.
- Management emphasizes vertical integration and continuous product line expansion.
The Sundrex Oil IPO Snapshot
This is a fresh issue, meaning the capital raised will go directly into the company’s growth and operational needs. Here are the critical details:
| Detail | Information |
|---|---|
| Issue Type | Book Building IPO (Fresh Issue) |
| Total Issue Size (Approx.) | ₹ 32.25 Crores |
| Listing Platform | NSE SME |
| Face Value per Share | ₹ 10.00 |
| Price Band | ₹ 81.00 to ₹ 86.00 per share |
| Lot Size (Minimum Application) | 1,600 Shares |
| Minimum Retail Investment | ₹ 2,75,200.00 (for 2 lots) |
IPO Timeline: Key Dates to Note
Missing a date in the IPO process can mean missing out on the opportunity. Please note these tentative dates:
Reservation and Allocation Structure
The total issue size of 37,50,400 shares is divided across different investor categories. Understanding these quotas is crucial for assessing demand and allotment probability.
| Investor Category | Shares Offered | Percentage (%) |
|---|---|---|
| Retail Individual Investors (RII) | 20,89,600 | 55.72% |
| Non-Institutional Investors (NII/HNI) | 13,96,800 | 37.24% |
| Qualified Institutional Buyers (QIB) | 75,200 | 2.01% |
| Market Maker Reservation | 1,88,800 | 5.03% |
| Total Shares Offered | 37,50,400 | 100.00% |
Investment Flexibility (Lot Size Details)
Investors can apply in multiples of the base lot size. The minimum retail investment is calculated based on the upper band price of the issue.
| Application Type | Lots | Shares | Approx. Amount (at Upper Price) |
|---|---|---|---|
| Retail Investor (Minimum) | 2 | 3,200 | ₹ 2,75,200.00 |
| Small HNI (Minimum) | 3 | 4,800 | ₹ 4,12,800.00 |
Company Financial Health Check
Analyzing the historical financials provides context for the company's valuation. Sundrex Oil has shown significant growth trajectory leading up to the IPO filing.
Key Financial Metrics (Amount in ₹ Crore)
| Metric | 30 Jun 2025 (Interim) | Mar 31, 2025 | Mar 31, 2024 |
|---|---|---|---|
| Total Income | 19.18 | 69.12 | 49.19 |
| Profit After Tax (PAT) | 1.94 | 5.44 | 2.57 |
| Total Borrowing | 17.13 | 17.38 | 13.63 |
| Net Worth | 17.22 | 15.28 | 3.96 |
Notably, the revenue jumped by 41% and Profit After Tax (PAT) showed an impressive rise of 112% between the financial year ending March 2024 and March 2025, signaling strong operational improvement.
Profitability and Valuation Ratios (As of Mar 31, 2025)
| Key Performance Indicator | Value |
|---|---|
| Return on Equity (ROE) | 35.63% |
| Debt to Equity Ratio | 1.14 |
| PAT Margin | 8.10% |
| Price to Earning (P/E) Ratio (Post-IPO Basis) | 10.69x |
Governance and Objectives
Promoter Information and Holding
- The company is promoted by Mr. Mahesh Sonthalia, Mr. Shashank Sonthalia, and Mr. Aman Sonthalia.
- Promoter Holding Pre-Issue: 100.00% (This indicates full promoter confidence before the public offering).
Use of IPO Proceeds
The funds raised through this public issue are earmarked for key strategic areas:
| Objective | Estimated Amount (₹ Cr.) |
|---|---|
| Working Capital Requirements | 20.87 |
| Capital Expenditure | 0.73 |
| Prepayment/Repayment of Loans | 2.58 |
| General Corporate Purposes & Expenses | Balance |
Intermediaries and Support Structure
Reliable intermediaries ensure smooth execution of the IPO process.
Key Contacts
- Book Running Lead Manager (BRLM): Affinity Global Capital Market Pvt.Ltd.
- Registrar: Cameo Corporate Services Ltd. (Contact: +91-44-28460390, investor@cameoindia.com)
- Market Maker: Sunflower Broking Pvt.Ltd.
Preliminary SWOT Analysis for Sundrex Oil IPO
A balanced view requires assessing both internal capabilities and external factors.
Strengths (Internal Positives)
- Strong profitability growth reflected in PAT increase.
- Comprehensive product range in high-demand industrial and automotive segments.
- Complete promoter holding pre-IPO suggests alignment of interests.
Weaknesses (Internal Challenges)
- Moderate Debt-to-Equity ratio (1.14) indicates reliance on borrowings alongside equity.
- Reliance on the SME platform, which may have lower liquidity compared to the main board initially.
Opportunities (External Potential)
- Growing Indian industrial and automotive sectors create sustained demand for lubricants.
- Expansion of contract manufacturing services offers revenue diversification.
Threats (External Risks)
- Volatility in crude oil prices, a primary raw material, impacting cost structure.
- Intense competition from established large-scale players in the lubricant market.
Final Thoughts on Participation
The Sundrex Oil IPO presents an entry point into a company demonstrating solid financial acceleration, particularly in PAT growth. The issue is priced reasonably, evidenced by its P/E multiple relative to its earnings history. As the entire offering is a fresh issue, the capital injection is directly beneficial for scaling operations and meeting working capital needs, which is the primary objective. Investors researching SME IPOs should closely monitor the subscription data once the window opens, as SME listings often see high retail interest.