Tanks, Ambitions, and Sky-High Valuations: The Aegis Vopak IPO Story

Aegis Vopak Terminals, India’s largest third-party tank storage operator for LPG and liquid products, has launched its much-anticipated ₹2,800 crore IPO today. The offering, open until May 28, is entirely a fresh issue with no offer-for-sale component. The price band is set at ₹223-₹235 per share, requiring a minimum retail investment of ₹14,805 for one lot of 63 shares.

 

Ahead of the IPO, the company secured ₹1,260 crore from 32 anchor investors, including global heavyweights like Goldman Sachs, Nomura, and Aberdeen, as well as prominent domestic mutual funds. The proceeds will be used to repay ₹2,016 crore in debt, fund the acquisition of a cryogenic LPG terminal at Mangalore, and for general corporate purposes.

 

Aegis Vopak reported a strong financial turnaround in FY24, posting a net profit of ₹86.54 crore on revenues of ₹570.12 crore. However, at the upper price band, the IPO values the company at a steep trailing P/E of 187.7x, raising concerns about aggressive pricing. While analysts see long-term growth potential driven by industry tailwinds and capacity expansion, they caution that the premium valuation and execution risks in upcoming projects warrant careful consideration by investors.

 

Source: Economic Times, Business Standard, CNBC TV18, Moneycontrol