Sah Polymers IPO Subscription Day 2: On the second day of the issue, the initial public offering (IPO) of Sah Polymers was fully subscribed. The bid has received bids for 48.04 lakh shares at the IPO size of 56.1 lakh shares, i.e. a bid rate of 86 percent on December 30, the first day of the bid. The subscription opened on Friday, December 30, 2022. The price range of the issue, which ends on Wednesday, January 4, 2023.
Sah Polymers IPO: price range
The company has set the issue price band at Rs 61-65 per share.
Sah Polymers IPO: offering details
The public offering consists of a new issue of 1.02 crore shares only, with no offer for sale (OFS).
Sah Polymers IPO: Issue Objectives
Sah Polymers will use the proceeds of the issue to set up a new facility for the production of flexible intermediate bulk containers (FIBC). The new facility will have an installed capacity of 3,960 million tonnes per annum (mtpa).
Currently, it has one production facility with an installed production capacity of 3,960 mtpa at Udaipur in Rajasthan.
Apart from that, the money will also be used to pay off some of his debts and as working capital.
Sah Polymers IPO: About the company
Sah Polymers is mainly engaged in the production and sales of polypropylene (PP)/high-density polyethylene (HDPE) FIBC bags, woven bags and HDPE/PP woven fabrics. It provides customized bulk packaging solutions to manufacturers targeting various industries such as agricultural pesticides, basic pharmaceuticals, cement, chemicals, fertilizers, food products, textiles, ceramics and steel.
In addition, the company is a Del Credere Associate cum Consignment Stockist of Indian Oil Corporation (IOC) and also operates as a dealer-operated IOC polymer warehouse for its polymer division.
Present in five states and one Union Territory in India, Sah Polymers also exports its products to 14 countries including Poland, Portugal, France, Italy, USA, Australia, UAE, UK and Ireland.
Kanpur Plastipack, Rishi Techtex, Gopala Polyplast, Jumbo Bag, SMVD Polypack, EMMBI Industries and Commercial Syn Bags are the company’s competitors.
Sah Polymers IPO Financials
Sah Polymers reported sound financial performance with a profit for the year ending March 2022 (FY23) with growth of 244 percent to Rs 4.4 crore and revenue increase of 46.2 percent to Rs 80.5 crore compared to the previous year, with exports accounting for more than 55 percent of sales.
At the operational level, earnings before interest, taxes, depreciation and amortization (EBITDA) of Rs 7.73 crore grew by 135 percent compared to FY21, with the margin expanding from 6 percent to 9.6 percent over the same period.
For the June FY23 quarter, the company recorded a profit of Rs 1.25 crore on revenue of Rs 27.22 crore. Even return on equity (RoE) has grown significantly from 6.3 percent in FY21 to 16.4 percent in FY22, while return on capital employed (RoCE) increased from 0.1 percent in the same period to 0.14 percent .
Could you invest?
“We are assigning a ‘Subscribe’ rating to this IPO as the company has a diversified product portfolio with a customer base across geographies and industries. It is also available at reasonable valuations considering the company’s future growth potential,” said Marwadi Shares and Financial Services.
Sah Polymers will complete the IPO stock allotment no later than Jan. 9 and credit refunds to unsuccessful investors no later than Jan. 10. Eligible investors will receive shares in their demat accounts before January 11.
The shares will debut on the exchanges on January 12, 2023.
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