34x Returns Since IPO: How A Multibagger SME Stock Turned Rs 1,50,000 To Rs 51,00,000 In 9 Years; BUY?

Hi-Tech Pipes, an SME stock, has rewarded its long-term investors handsomely, turning an initial investment of Rs 1.5 lakh in its 2016 IPO into a whopping Rs 51 lakh today. The company's strategic moves, including a stock split and successful branding initiatives, have played a significant role in its growth story.

A Look Back at the IPO

Hi-Tech Pipes launched its IPO in February 2016 as a fixed-price issue, raising Rs 13.65 crore. The shares were offered at Rs 50 each, with a minimum lot size of 3,000 shares, requiring a minimum investment of Rs 1.5 lakh. The IPO ran from February 15 to February 19, 2016, and the shares were subsequently listed on the NSE SME platform on February 25, 2016.

Investors who stayed invested since the IPO saw their initial holding of 3,000 shares transform into 30,000 shares following a 1:10 stock split in 2023. With the stock currently trading at Rs 170, the value of their investment has soared to Rs 51 lakh.

Stock Split Boosts Liquidity

In January 2023, Hi-Tech Pipes announced a 1:10 stock split, reducing the face value of each share from Rs 10 to Rs 1. The split aimed to increase liquidity, attract small investors, and widen the shareholder base. The record date for the stock split was March 17, 2023, and eligible shareholders saw their holdings multiplied tenfold. This move enhanced the stock's accessibility and amplified returns for long-term investors.

The stock has delivered healthy returns, climbing 50% over the past year. In 2024 alone, Hi-Tech Pipes has risen by 48%.

The stock hit its all-time high of Rs 210.75 in September 2024 but is currently trading at Rs 167.90, over 20% below its peak. Despite this correction, it has surged 72% from its 52-week low of Rs 97.60, recorded in December 2023.

Branding and Fundraising

Hi-Tech Pipes recently made headlines by appointing Bollywood star Hrithik Roshan as its brand ambassador. The company aims to leverage Roshan's popularity to enhance its brand visibility and connect with consumers.

"We are delighted to welcome Hrithik Roshan to the Hi-Tech Pipes family. His immense popularity and positive influence align seamlessly with our commitment to delivering superior products and services. We believe this collaboration will strengthen our connection with consumers and drive growth," said Ajay Kumar Bansal, Chairman and Managing Director of Hi-Tech Pipes Ltd.

In addition to branding, the company successfully raised over Rs 500 crore through a Qualified Institutional Placement (QIP) in October 2024. The QIP, priced at Rs 185.50 per share, received robust participation from institutional investors like Motilal Oswal Fund, Bandhan Mutual Fund, and LIC Mutual Fund.

Earnings Performance

Hi-Tech Pipes reported strong financial results in the September 2024 quarter. Its consolidated net profit surged 72% year-on-year to Rs 18.11 crore, up from Rs 10.52 crore in the same period last year. Sales volumes increased by 22.50% to 1.23 lakh tonnes, driven by demand for steel tubes, structural steel products, and value-added offerings.

Despite this, revenue from operations dipped 5.3% to Rs 706.86 crore, attributed to lower raw material prices. Bansal highlighted the company's performance, saying, "In Q2 FY25, our total sales volumes increased by 22.50 percent, reaching 1.23 lakh tonnes, driven by strong demand for steel tubes, structural steel products, and value-added products."

While the stock has faced some recent headwinds, shedding nearly 7% in November and marking its third consecutive month of losses, its long-term growth trajectory remains intact. With strong fundamentals, innovative strategies, and growing investor confidence, Hi-Tech Pipes is well-positioned to maintain its market leadership.

As of 2:35 pm on November 27, the shares of Hi-Tech Pipes were trading at Rs 173 on the NSE, up more than 2% for the day. Over the past year, the stock has delivered over 55% returns.