Industrial packaging company Pyramid Technoplast plans to go public on August 18. This will be the fourth IPO this month after SBFC Finance, Concord Biotech and TVS Supply Chain Solutions.
Here are 10 important things you should know before betting on this title:
1) Date of IPO
The offer will start on August 18 and the last date for subscription is August 22. Anchor Book, part of Qualified Institutional Buyers (QIB), will open for one day on August 17.
2) Price range
The offer price range is set at 151-166 rubles per share.
3) Size of the problem
The maker of polymer-based mold products such as polymer batteries expects to earn a low of Rs 139.22 crore and a high of Rs 153.05 crore.
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The initial public offer of 92.2 lakh shares will include a fresh offer of 55 lakh shares (Rs. 91.30 crore at Rs. 166 per share) and an offer for sale (OFS) of 37.2 lakh shares (Rs. 166 per share). 61.75 crores). PROMOTER CREDIT LIMITED "FINANCIAL ADVICE".
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4) Work objectives
Proceeds from the fresh issue, excluding IPO fees, will be used to repay certain loans (Rs. 40 million) and working capital requirements (Rs. 40.21 Crore). The remaining funds are reserved for general corporate purposes.
At the end of March FY23, the total loan on the books was Rs.55.34 crore, up from Rs.64.8 crore a year ago. This means the new issue should improve the company's leverage ratio from 0.52 at the end of March to 0.86 in August.
The proceeds from the SFO will go to the selling shareholders of Credence Financial.
5) Lot size
Investors can bid for a minimum of 90 shares and thereafter in multiples of 90 shares. So retail investors can invest a minimum of Rs 14,940 per lot (90 shares) and the maximum investment is Rs 1,94,220 for 13 lots (1170 shares).
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In the IPO, wealthy individuals with an investment limit of Rs 2-10 lakh can apply for a minimum investment of Rs 2,09,160 for 14 lots (1,260 shares) and a maximum investment of Rs 9,86,040 for 66 lots (5,940). shares).
This is a book-building offering by the company, which has earmarked 30% of the issue for QIBs, 20% for senior investors and 50% for individual investors. In addition, the company can distribute up to 60% of the QIB book to lead investors.
6) Company profile
The company "Pyramid Technoplast" produces molded polymer products using blow molding technology - polymer barrels are mainly used for packaging in the chemical, agrochemical, special chemical and pharmaceutical industries.
MS also manufactures mild steel (MS) drums for the packaging and transportation of chemicals, agrochemicals and specialty chemicals.
The injection molding technique is used to make caps, hats, caps, caps, gloves, tops, etc. For internal use.
With six strategically located manufacturing facilities, the Gujarat-based company markets its products under the Pyramid brand. A seventh production unit is under construction along with six existing units at Bahruq. The total installed capacity of polymer drum manufacturing facilities is 20,612 MTPA (Metric Tons per annum).
7) Financial indicators
Pyramid posted strong revenue growth last fiscal year, although margins were squeezed by rising input costs. Profit for the month ended March was Rs.31.76 million, up 21.5% YoY and net profit margin increased 9 basis points to 6.62%.
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Operating profit in FY23 was Rs.480 crore, growing nearly 20% year-on-year. On an operating basis, EBITDA (earnings before interest, tax, depreciation and amortization) rose 18.06 percent year-on-year to Rs49.8 billion, but profitability fell 10 basis points to 10.4 percent.
In FY 2023, return on equity decreased from 34.77 percent to 29.61 percent, while return on equity remained stable at 21.37 percent versus 21.38 percent over the same period.
The company's FY23 P/E of 16.21x compares to publicly traded companies such as Time Technoplast (14.16x P/E), TPL Plastech (20.50x), and Mold-Tek Packaging (41.10x).
8) Promoters and management
The promoters of the company are Bijaykumar Agarwal, Jaiprakash Agarwal, Yash Synthetics, Credence Financial Consultancy LLP, Pushpa Devi Agarwal and Madhu Devi Agarwal. Pyramid is currently 100% owned by the Agarwal family.
Bijaykumar Agarwal is the Chairman and CEO of the company. His son Jaiprakash Agarwal is the permanent director and chief financial officer, while Jaiprakash's wife Madhu Agarwal is the whole-time board director.
Chandrakant Joge is the Corporate Secretary and Chief Compliance Officer of the Company.
9) Risk factors
Here are the main risk factors described in the prospectus
a) Manufacturing plants in Western India (Bharuk, Gujarat and Silvassa, Dadra and Nagar Haveli) may be subject to various regional conditions such as political unrest, natural disasters or civil unrest, protests and demonstrations.
b) An important part of the turnover is the production of polymer-based industrial packaging products, e.g. B. Polymer drums and intermediate capacity containers (IBCs).
(c) Polymer is a derivative of crude oil and any increase in the price of crude oil or decrease in the supply of polymer would have a material adverse effect on the business. Mild steel is made from iron ore and sponge iron, and therefore a significant increase in the price of iron ore and sponge iron or a decrease in the supply of iron ore and sponge iron will have a significant negative impact to MS drum manufacturers.
d) The company does not have long-term contracts with customers for the purchase of products.
e) The company has historically reported negative cash flows and may continue to do so in the future.
f) Any ban on polymer packaging by the Government of India may affect their business.
10) Distribution and registration dates
The company will set the share allotment basis for the IPO with NSE on August 25 and the shares will be credited to the demo account of eligible investors by August 29. Funds will be transferred to unsuccessful investors by August 28. .
Finally, Pyramid will launch on BSE and NSE on August 30.
The IPO shares are available at a premium of more than 10% to the upper end of the gray market price range, the analysts said on condition of anonymity. The gray market is an unofficial market where IPO shares can be bought and sold before they are listed.
PNB Investment Services and First Overseas Capital are the investment banks for the offering and BigShare Services is the lead underwriter for the offering.
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