Sah Polymers IPO Subscription Day 2: The initial public offer (IPO) of Sah Polymers was fully subscribed on the second day of the issue. The offer has received bids for 48.04 lakh shares against the IPO size of 56.1 lakh shares, that is, a subscription rate of 86 per cent on December 30, the first day of bidding. The subscription opened on Friday, December 30, 2022. The price band of the issue, which will conclude on Wednesday, January 4, 2023.
Sah Polymers IPO: Price Band
The company has fixed the issue price band at Rs 61-65 per share.
Sah Polymers IPO: Offer Details
The public issue consists of only fresh issue of 1.02 crore equity shares, with no offer-for-sale (OFS) part.
Sah Polymers IPO: Objectives of Issue
Sah Polymers will utilise the issue proceeds for setting up a new unit to manufacture 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 manufacturing facility with installed production capacity of 3,960 mtpa at Udaipur in Rajasthan.
Apart from that, the funds will also be used to repay some of its debts and as working capital.
Sah Polymers IPO: About the Company
Sah Polymers is primarily engaged in manufacturing and selling of polypropylene (PP)/high-density polyethylene (HDPE) FIBC bags, woven sacks, and HDPE/PP woven fabrics. It offers customised bulk packaging solutions to manufacturers catering to different industries, such as agro pesticides, basic drugs, cement, chemicals, fertilisers, food products, textile, ceramic, 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 polymer warehouse of IOC for its polymer division.
Having presence 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 competitors to the company.
Sah Polymers IPO Financials
Sah Polymers reported healthy financial performance with profit for the year ended March 2022 (FY23) growing 244 percent to Rs 4.4 crore and revenue rising 46.2 percent to Rs 80.5 crore compared to the previous year, with exports accounting for more than 55 percent of the topline.
At the operating level, earnings before interest, tax, depreciation and amortisation (EBITDA) at Rs 7.73 crore grew by 135 percent compared to FY21, with margin expanding to 9.6 percent from 6 percent in the same period.
For the June FY23 quarter, the company registered a profit of Rs 1.25 crore on revenue of Rs 27.22 crore. Even the return on equity (RoE) has been growing significantly from 6.3 percent in FY21 to 16.4 percent in FY22, while the return on capital employed (RoCE) rose to 0.14 percent from 0.1 percent in the same period.
Sould you Invest?
“We assign a “Subscribe” rating to this IPO as the company has a diversified product portfolio with a customer base across geographies and industries. Also, it is available at reasonable valuations considering the future growth potential of the company,” said Marwadi Shares and Financial Services.
Sah Polymers will finalise the IPO share allotment by January 9, and credit refunds to unsuccessful investors by January 10. Eligible investors will get shares in their demat accounts by January 11.
The equity shares will debut on the stock exchanges on January 12, 2023.
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