Hi-Tech Pipes, the third-largest pipe manufacturer in India, recently saw its ₹600 crore qualified institutional placement (QIP) offer receive bids totalling over ₹800 crore. This significant interest came from both domestic and global institutional investors, underscoring the company's growing appeal. Hi-Tech Pipes, known for its wide network and reputable clients like BHEL, SAIL, Adani Group, and Jio, will use the proceeds to expand its manufacturing capacity.
The company plans to increase production to 2 million metric tonnes per annum (MTPA), solidifying its position in the industry.
Investors who buy shares online are keen on this stock, which has garnered attention from mutual funds, alternative investment funds (AIFs), and foreign institutional investors (FIIs). Currently, Hi-Tech Pipes’ stock settled at ₹201.50 per share on the NSE, marking a slight 0.40% decline after a three-day upward streak.
Global and domestic investors express strong interest
A group of around 15-20 investors, including large mutual funds and corporate treasuries, showed considerable interest in Hi-Tech Pipes' QIP. The shares were placed at a price of ₹185, lower than the current market price. This success adds to the company’s list of prominent shareholders, with mutual funds already holding 7.13% of its stock. Some of the key mutual funds involved include ITI, Bandhan, and HSBC, each with over 1% ownership through various schemes.
AIFs currently hold over 3% of Hi-Tech Pipes, and FIIs have increased their stake to nearly 9%. The company's QIP was planned earlier this month, and a formal announcement on October 7 revealed that Hi-Tech Pipes may offer a discount of up to 5% on the floor price to attract more investors. The exact issue price will be determined in consultation with the appointed lead manager for the placement.
Capacity expansion and future plans
With a growing market capitalisation of ₹3,500 crore, Hi-Tech Pipes has made strides in expanding its production capabilities. The company has already increased its capacity from 3.6 lakh MTPA in FY18 to 7.5 lakh MTPA in FY24. This figure is expected to reach 2 million MTPA by FY27, making Hi-Tech Pipes the second-largest player in the industry, behind Apollo Pipes.
The funds raised through the QIP will enable the company to set up a new plant, anticipated to be operational by the end of this year.
Additionally, Hi-Tech Pipes has an extensive dealer and distributor network, spanning over 450 channels across key Indian states like Uttar Pradesh, Gujarat, Maharashtra, Andhra Pradesh, and the NCR region. This expansive reach positions the company well for its future growth ambitions.
Record sales volumes and financial performance
Hi-Tech Pipes has seen remarkable growth in sales volumes. In Q2FY25, the company achieved its highest-ever quarterly sales, with volumes of 123,027 metric tonnes (MT), representing a 22.5% year-on-year increase. For the first half of FY25, total sales volumes reached 245,182 MT, reflecting a 32.55% year-on-year rise. This upward trajectory is a testament to the company’s growing demand and operational efficiency.
For those looking to buy shares online, Hi-Tech Pipes offers an attractive opportunity, especially given its ambitious plans and consistent financial performance. The company aims to become debt-free by FY26, further improving its financial stability and appeal to investors.
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