Tolins offers quality at a discount, but raw material prices weigh
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ET Intelligence Group: Tolins Tyres, a manufacturer of tread rubber and tyres, is aiming to raise ₹230 crore through an initial public offering. The IPO will consist of a fresh issue of shares worth ₹200 crore, which will be used for loan repayment and to enhance working capital, while the rest will come from an offer for sale by its promoters. The company's go-to-market strategy involves utilising dealers and distributors (B2C), focusing on fleet operators by offering quality comparable with leading tyre brands at a significant discount. In contrast, its competitors have concentrated on state transportation businesses (B2G), compressing net margins. Tolins Tyres operates a plant in the UAE - the only tread rubber plant in the region - which gives it a broad overseas market. The company is entitled to issue recycle certificates for tyres, which would be an incremental income with no expense. Given these factors, long-term investors ma...