Ratnaveer Vs Scoda: A Closer Look at Two Stainless Steel Stocks
One is fresh off an IPO with big plans, the other is quietly resetting after early euphoria. We dig into the fundamentals, valuations, and real risk-reward.
Important Note: This article is not a buy or sell recommendation. Our aim is to present publicly available information and assessing the risk-reward in both companies based on our research.
IPOs & EUPHORIA
IPOs are often marketed as gateways to promising stories, offering investors a chance to participate early in a company’s journey. However, more often than not, IPOs represent the culmination of a strong performance cycle, not the beginning of one. Companies usually go public when financial metrics are peaking, margins are robust, order books are healthy, and narratives are well-polished. It’s not uncommon to find financials "dressed up" in the run-up to a listing, especially when valuation maximization is the primary goal.
The IPO process itself with anchor allotments, roadshows, and media-fueled oversubscription headlines, manufactures a perception of scarcity and momentum. This perception often leads to exuberant pricing and inflated expectations, leaving little room for post-listing alpha generation. In our experience, most freshly listed companies are priced for perfection, making it difficult to find meaningful mispricings in the immediate aftermath of listing.
This is why we generally avoid participating in IPOs or newly listed companies. That said, as Mark Twain aptly put it, “All generalizations are false, including this one.” We remain open to situations where the listing hasn’t been euphoric, valuations are reasonable, or something structurally compelling is underway.
RATNAVEER PRECISION ENGINEERING AND SCODA TUBES
Recent listing of Scoda Tubes got us interested to look at stainless steel tube and pipe sector. Ratnaveer Precision Engineering, which listed in 2023 and subsequently raised capital through preferential allotments and warrant issuances in July 2024, now trades at valuations comparable to those preferential levels after initial IPO euphoria subsided. In contrast, Scoda Tubes recently listed, attracting marquee investors like Malabar and Carnelian, reflecting strong institutional interest and heightened expectations.
Given this backdrop and the contrasting market responses, we found it worthwhile to evaluate both Ratnaveer and Scoda across strategy, execution, and forward-looking financials to better understand the real risk-reward on offer.
BUSINESS MODELS
Ratnaveer has historically operated in lower-margin products like washers and stainless-steel sheets. However, it boasts meaningful backward and forward integration, and has recently expanded into higher-value segments like tubes, fasteners, and solar brackets. Its customer base spans automotive, defense, construction, renewables, and more. Notably, it raised ₹100 crore in FY24 through a preferential allotment and warrants, issued at levels close to current market prices. A further ₹200 crore fundraise announced in June 2025 is aimed at deepening this expansion into adjacencies and operational efficiency.
Scoda Tubes is a pure-play stainless steel pipes and tubes manufacturer, with over 94% of its revenue coming from this segment. Post-IPO, it is executing a 3x capacity expansion from 11,000 MTPA to 33,000+ MTPA, backed by ₹100 crore capex (₹55 crore in seamless, ₹45 crore in welded pipes). However, its reliance on one segment and aggressive capex create execution and utilization risks in an increasingly competitive market.
INDUSTRY CONTEXT
According to CRISIL, the Indian stainless steel tube and pipe market grew from 0.23 MT in FY20 to 0.32 MT in FY24, and is expected to reach 0.45–0.47 MT by FY29, growing at 6–8% CAGR. This healthy growth in the demand will primarily be led by strong growths in major end use industries of stainless-steel pipes and tubes such as building and construction, automobile, oil and gas, chemical manufacturing, food and beverage, etc.
Below we present the market share data in the domestic market along with the key players operating in the space:
Industry Expansion Plans
While the existing players like Ratnamani, Venus, Welspun are increasing their capacities to maintain or increase their market share, players which were in other metal pipe domains are venturing into the space with aggressive expansion plans. We’ve attached below a snapshot of Man’s planned capacity expansion that hints at the scale of competition shaping up. There are also new items pertaining to Jindal venturing into this space as well.
STRATEGIC DIFFERENCE OF RATNAVEER & SCODA
Ratnaveer’s edge lies in its diversification both in products and end-markets. While tubes and pipes are a growing part of the mix, it retains meaningful exposure to solar brackets, washers, and fasteners. This diversification provides a natural hedge against cyclicality and enhances resilience. Moreover, its disciplined expansion strategy focused on adjacencies rather than singular verticals has historically resulted in measured, profitable growth.
The promoter family’s ties to Ratnamani Metals (India’s stainless steel pipe leader) are also noteworthy. Feedback from industry participants suggests a quiet, competent management style and a tacit understanding to avoid direct competition with Ratnamani. This informal alignment reduces the risk of price wars and enhances Ratnaveer’s ability to carve out niche markets.
In contrast, Scoda’s focus is narrower. While it is a credible player and exports to 14 countries, its revenue concentration in a single vertical amid large capacity addition and elevated expectations creates a steeper hill to climb. Execution, utilization, and margin protection will be critical as the market tests its scalability and differentiation in light of increasing capacity in the domestic market by incumbents and new players as mentioned above in the industry section.
Financial Performance & Future Projections
Ratnaveer notably over-delivered on its FY25 revenue and EBITDA promises outlined in its FY24 annual report. The company is now guiding robust growth into FY28, anticipating substantial operational benefits from ongoing and planned initiatives. Given this track record, Ratnaveer’s forward guidance warrants measured optimism.
In developing our FY28 base-case financial scenarios, we relied on a robust framework of assumptions:
For Ratnaveer, we anchored our model around management guidance available through company filings and investor communications. Projections were stress tested against historical delivery patterns and adjusted for capex funding plans disclosed or inferred from filings.
For Scoda, in the absence of long-term detailed guidance, we assumed reasonably high utilization of its post-IPO expanded capacity. Revenue estimates were derived from unit-level realization benchmarks of comparable peers. Margin structures were calibrated using long-term mean margins observed in Ratnamani Metals, to approximate normalized profitability in a mature operating scenario.
This modelling approach based on peer benchmarking, sectoral averages, and granular volume-price build-ups, ensures we are not extrapolating peak assumptions but testing what normalized economics might look like for both businesses.
Valuation and Risk-Reward
We have emailed our clients the full in-depth analysis of FY28 earnings potential, and detailed rationale explaining why we view the risk-reward asymmetry in one as significantly more favorable compared to the other, whose present valuations embed potentially optimistic assumptions.
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CONCLUSION
Seth Klarman once said, “Investing is the intersection of economics and psychology.” IPOs tend to accentuate the psychological side: scarcity, hype, and optimism, while the true investment decision lies in understanding what happens after the listing party is over.
In this analysis, we’ve examined two players in the same sector, both with ambitious plans, but different levels of diversification, maturity, and valuation context.
While one of them shows potential for holding its ground even in a conservative scenario. With one promising to deliver 100% returns even in the bear case assumptions and valuation multiples, the other appears to be a loosing bet. What the market celebrates today isn’t always what compounds quietly tomorrow. As always, the real edge lies in distinguishing hype from durable economics.
Important Note and Disclaimer: This article is not a buy/sell recommendation. We are simply highlighting a comparison between the companies and trying to access risk-reward based on public available information. We could be wrong, and investors must do their own due diligence before taking any position. Please note that this note is shared only for the education purpose and in no way, it constitutes any buying or selling recommendation.
If you are interested in accessing our research and joining a network of well informed investors, please contact us at Gaurav.a@nineonecapital.in