Industrial packaging maker Pyramid Technoplast will launch its IPO on August 18. This will be the fourth IPO this month after SBFC Finance, Concorde Biotech and TVS Supply Chain Solutions.
Here are 10 important things you should know before signing up:
1) Date of IPO
The auction starts on August 18, and the last day to register is August 22. The anchor book owned by Qualified Institutional Buyers (QIBs) opened for one day on August 17.
2) Price range
The target price range is set at Rs 151-166 per share.
3) Size matters
Makers of polymer-based printed products such as polymer drums expect to collect Rs 139.22 crore at the lower end and Rs 153.05 crore at the upper end.
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The IPO of 92.2 lakh equity shares includes fresh issue of 55 lakh shares (Rs 91.30 per share at Rs 166 crore) and Offer for Sale (OFS) of 37.2 lakh shares (Rs 61.75 per share) through promoters. Testimonial Finanzberatung LLP.
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4) The purpose of the problem
Proceeds from the new issue, net of IPO expenses, will be used to repay certain loans (Rs 40 billion) and working capital requirements (Rs 40.21 billion). The remaining funds are kept for the general benefit of the company.
Total loans on the books at the end of March 23 stood at Rs 55.34 crore, down from Rs 64.8 crore in the previous year. That means the new issue should increase the company's leverage ratio from 0.52 at the end of March to 0.86 in August.
Funds collected by the SFO benefit the seller's credit finance.
5) Stack size
Investors can bid for a minimum of 90 shares and then in multiples of 90 shares. Therefore, retail investors can make a minimum investment of Rs 14,940 per lot (90 shares) and a maximum investment of Rs 1,94,220. For 13 lots (1,170 shares).
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Rich people with an IPO investment limit of Rs 2-10 lakh can apply for 14 lots (1,260 shares) with a minimum investment of Rs 2,09,160. The maximum investment is Rs 9,86,040 for 66 lots (5,940 shares).
This is a book-building offering by the company, which sets aside 30% of the issue for QIBs, 20% for senior investors and the remaining 50% for individual investors. In addition, the company can allocate up to 60% of the QIB book to the shares of the main investors.
6) Company description
Pyramid Technoplast uses blow molding technology to produce polymer-based molded products.
The company also manufactures mild steel (MS) drums for packaging and transportation of chemicals, agrochemicals and specialty chemicals.
Injection molding techniques are used to produce caps, covers, stoppers, caps, handles, inserts, etc. For internal use.
With six strategically located manufacturing plants, the Gujarat-based company markets and sells under the Pyramid brand. A seventh manufacturing unit is under construction at Bharuk along with the existing six units. The total installed capacity of the polymer drum manufacturing plant is 20,612 MTPA (Metric Tonnes per annum).
7) Financial performance
Last fiscal year, Pyramid posted steady revenue growth despite pressure margins due to rising input costs. In the year Profit for the year ended March 23 was Rs 31.76 crore, up 21.5% year-on-year, and net profit margin increased 9 basis points to 6.62% year-on-year.
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FY23 operating income grew nearly 20 percent year-on-year to Rs 480 crore. At the moment, EBITDA (earnings before interest, tax, depreciation and amortization) grew 18.06 percent year-on-year to Rs 49.8 billion, but margin fell 10 basis points to 10.4 percent in FY23. :
It decreased to 29.61% from 34.77% a year ago, while the capital employed income stood at 21.37% compared to 21.37% in the same period.
The company has a P/E of 16.21x as of FY23 compared to other publicly listed companies such as Time Technoplast (P/E 14.16x), TPL Plastech (20.50x) and Mold-Tek Packaging (41.10x).
8) Advertising and management
The promoters of the company are Bijaikumar 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 managing director and chief financial officer, while Jaiprakash's husband Madhu Agarwal is the executive director of the board.
Chandrakant Joge is the Company Secretary and Chief Compliance Officer of the Company.
9) Risk factors
The main risk factors disclosed in the prospectus are as follows.
(a) Manufacturing works in Western India (Bharuk, Gujarat and Silvassa, Dadra and Nagar Haveli) due to various conditions related to the region such as political unrest, natural disasters or civil unrest, protests and demonstrations.
B) A significant share of the price comes from the production of industrial packaging products based on polymers, for example: B. Polymer drums and intermediate bulk containers (IBC).
(c) Polymers are derivatives of crude oil and any increase in the price of crude oil or decrease in the supply of polymers could have a material adverse effect on the business. Mild steel is made from iron ore and sponge iron. Therefore, a significant increase in the price of iron and sponge iron or a decrease in the supply of iron and sponge iron can have a negative impact on MS drum manufacturers.
d) The company does not have a long-term contract with customers to buy the products.
e) The company has historically reported negative cash flow and will likely continue to do so in the future.
(f) Any ban on polymer packaging by the Government of India may adversely affect the Company's business;
10) Classification and registration requirements
The company will decide the shares for the IPO in consultation with the NSE by August 25 and the shares will be transferred to the eligible investor's demat account by August 29. Refunds will be sent to defaulted investors by August 28. .
Finally, Pyramid will be listed on BSE and NSE on August 30.
IPO shares are available on the gray market at a premium of more than 10%, analysts said, requesting anonymity. The gray market is an informal market where IPO stocks are bought and sold on the waiting list.
PNB Investment Services and First Overseas Capital are the investment banks for the offering, while BigShare Services is the underwriter for the offering.
