Hi-Tech Pipes Limited secures Rs 5,000 million through oversubscribed QIP

Hi-Tech Pipes Limited has formally announced the successful completion of its Qualified Institutional Placement (QIP), valued at INR 5,000 million. The QIP significantly exceeded expectations, with an oversubscription driven by strong investor interest. The offering, which commenced on October 7, 2024, and closed on October 11, garnered bids amounting to over INR 8,000 million, underscoring robust investor confidence in the company’s strategic growth initiatives.

The QIP attracted substantial interest from a broad spectrum of institutional investors, encompassing prominent domestic mutual funds and esteemed international financial entities. Specifically, Hi-Tech Pipes Limited secured investments from notable domestic institutions such as Motilal Oswal Fund, Bandhan Mutual Fund, Bank of India Mutual Fund, JM Financial Mutual Fund, LIC Mutual Fund, and SBI General Insurance, among others. International investors also exhibited significant enthusiasm, thereby reinforcing the momentum of the QIP.

Ajay Kumar Bansal, the Chairman and Managing Director of Hi-Tech Pipes Limited, stated that the successful conclusion of the QIP represents a pivotal milestone in the company’s overarching growth strategy, which prioritizes capacity expansion and market positioning. Bansal emphasized that this QIP would not only enhance financial flexibility but also strategically position Hi-Tech Pipes to capitalize on emergent opportunities within the industry.

QIP Proceeds to Drive Capacity Expansion

The capital raised through the QIP will predominantly be utilized to expand production capabilities and bolster profitability via economies of scale and operational efficiencies. Anish Bansal, Whole-Time Director of Hi-Tech Pipes, elaborated that these funds are instrumental in doubling the company’s production capacity to reach two million tonnes over the forthcoming three years. He further noted that Hi-Tech Pipes aims to leverage these additional resources to meet the increasing demand within the Electric Resistance Welding (ERW) steel tubes and pipes segment, thereby enhancing both revenue and market competitiveness.

The issuance, priced at ₹ 185.50 per equity share, concluded at a discount of 4.86% to the floor price and a 7.39% discount to the last traded price on the National Stock Exchange (NSE) as of October 7, 2024. Pantomath Capital Advisors Private Limited served as the sole lead manager for this QIP.

Expert Opinion: Growth Underpinned by Solid Fundamentals

Industry experts within the steel and manufacturing sector have noted that Hi-Tech Pipes’ QIP success aligns with the company’s strategic positioning and its resilience in an intensely competitive industry. Analysts emphasize that Hi-Tech’s focus on scaling production capabilities, alongside its consistent delivery of high-quality product offerings, strengthens its position as a significant player in the steel processing domain. The company has adeptly navigated various industry challenges, capitalizing on burgeoning demand for steel pipes, tubes, and other innovative products across sectors such as construction, infrastructure, and renewable energy, particularly solar power.

Hi-Tech Pipes operates state-of-the-art integrated manufacturing facilities across Uttar Pradesh, Gujarat, Andhra Pradesh, and Maharashtra, with an annual installed capacity of 750,000 metric tonnes. The company aims to elevate this capacity to one million tonnes by FY25. These expansions are expected to substantially augment Hi-Tech’s ability to meet growing market demands while optimizing stakeholder value.

About Hi-Tech Pipes Limited

Hi-Tech Pipes Limited stands as one of India’s premier steel processing companies, renowned for its extensive product portfolio, which includes steel pipes, hollow sections, tubes, solar torque tubes, and other galvanized products. With nearly four decades of experience, Hi-Tech Pipes maintains a significant market presence, spanning over 17 states and supported by an expansive network of more than 450 distributors across India.