Sah Polymers Limited’s Initial Public
Offering to open on Friday, 30th December, 2022, sets price band at
₹61 to ₹65 per Equity Share
·
Price Band of
₹ 61 – ₹ 65 per equity share bearing face value of ₹ 10 each (“Equity Shares”)
·
Anchor Investor BIDDING DATE- Thursday 29
,December 2022*
·
Bid/Offer Opening Date – Friday, 30th
December, 2022 and Bid/Offer Closing Date – Wednesday, 4th January,
2023.
·
Minimum Bid Lot is 230 Equity Shares and in
multiples of 230 Equity Shares thereafter.
·
The Floor Price is 6.1 times the face value of
the Equity Share and the Cap Price is 6.5 times the face value of the Equity
Share.
*Company in
consultation with the BRLM may consider participation by Anchor Investors in
accordance with the SEBI ICDR Regulations. The Anchor Investor Bidding Date
shall be one Working Day prior to the Bid/Issuer Opening Date.
Risks to Investors
The BRLM associated with the Offer
have handled 08 public issues in the past three years, out of which 01 issue
was closed below the offer price on the listing date respectively.
|
Name of BRLM
|
Total Issues
|
Issues closed below IPO Price on
listing date
|
|
Pantomath Capital Advisors Private
Limited
|
8
|
1
|
Mumbai, December 26, 2022:Sah
Polymers Limited, primarily engaged in manufacturing and selling of
Polypropylene (PP)/ High Density Polyethylene (HDPE) Flexible Intermediate Bulk
Containers (FIBC) Bags, Woven Sacks, HDPE/PP woven fabrics, woven polymer based
products has fixed the price band at ₹61to ₹65per Equity Share for its maiden public offer. The
initial public offering (“IPO” or “Offer”) of the Company will open on Friday, 30th December, 2022,
for subscription and closes on Wednesday, 4th January, 2023. Investors
can bid for a minimum of 230 Equity Shares and in multiples of 230 Equity
Shares thereafter.
The public issue with a face value of
Rs 10 per equity share consists of a fresh issue of equity shares ofupto102,00,000 equity shares, with
no offer for sale component.
Sah Polymers is led by Asad Daud and professionally backed by Hakim
Sadiq Ali Tidiwalaand Murtaza Ali Motiwith a combined
expertise of approximately 20 years in the FIBC packaging sector. The Company
provides tailored bulk packaging solutions to business-to-business
("B2B") producers in a variety of industries, including agro
pesticides, basic drugs, cement, chemicals, fertilisers, food products,
textiles, ceramics, and steel.
The Company exports its products
to 14 countries including USA, UK, Australia, UAE, Africa, France and Poland.
Majority of the sales of the Company comes from exports. For the 3 months ended
June 30, 2022 and for Fiscals 2022, the Company’s revenue from exports
contributed 57.61% and 55.14%, respectively, of total revenues from operations.
Return on net-worth is 16.42% and
PAT margin for the year ended 2022 stood at 5.39%. The Company’s sales have
grown from Rs. 49.90 crores in FY 2020
to Rs. 81.23 crores in FY 22. The sales for the quarter ended June 2022 stood
at Rs.27.59 crores. Thus the sales CAGR for last three completed years is
27.6%. Similarly, the post-tax profits, i.e., PAT of the Company has increased
with CAGR of 284% over last three years.
The Company operates at 85% to
92% of the installed capacity and therefore going for further capex. Total
capex is Rs. 33.81 crores, out of which the Company has taken bridge loan of
Rs. 15.71 crores from the holding company and deployed while the IPO approvals
came so that the overall timeframe of the installation is not delayed. The new Project
is estimated to commence commercial operations within this year 2022-23 itself.
Out of the current manufacturing facility (located at Mewar Industrial Area,
Madri, Udaipur, Rajasthan) the Company manufactures a diverse range of HDPE/PP
Woven Sacks and FIBC products with filling capacity of upto 500 KGs per
bag/sack. The Company intends to manufacture new variant of FIBC products with
filling capacities of upto 2,500 KGs out of the new Unit. The installed
capacity of the new Unit is of 3,960 MT per annum, which is equivalent to
current capacity therefore the company’s capacity will double upon
commissioning of new plant.
Kanpur Plastipack Ltd., Rishi Techtex Ltd., Gopala Polyplast Ltd., Jumbo
Bag Ltd., SMVD Polypack Ltd., EMMBI Industries Ltd., and Commercial Syn. Bags
Ltd. are competitors; however, the peers are not directly comparable due to the
type, range of products/services, turnover, and size of the firm. As disclosed
in the offer is given below:
(Rs.in lakhs) (As
on March 31, 2022)
|
Key Performance
Indicators
|
Sah Polymers Limited#
|
Peer-Group
|
|
|
Rishi Techtex Limited
|
Jumbo Bag Limited
|
SMVD Poly Pack Limited
|
EMMBI Industries Limited
|
Commercial Synbag Limited
|
|
Revenue from Operations
|
8,051.14
|
10,085.75
|
13,056.50
|
8,624.13
|
43,562.20
|
32,158.0
|
|
EBITDA(3)
|
773.40
|
634.89
|
983.92
|
306.55
|
4920.8
|
3487.65
|
|
EBITDA Margin(4)
|
9.61%
|
6.29
|
7.50
|
8.11
|
11.29
|
10.85%
|
|
Profit After Tax for the Year / Period
|
437.54
|
131.85
|
106.09
|
104.63
|
1,903.30
|
1,818.28
|
|
PAT Margin(5)
|
5.43%
|
1.30%
|
0.81%
|
1.21
|
4.37
|
5.65
|
|
ROE(6)
|
16.42%
|
17.83%
|
3.35%
|
4.65
|
12.41
|
0.20%
|
|
ROCE(7)
|
0.14
|
10.55
|
14
|
9.07
|
8.19
|
0.15
|
|
Debt / Equity(8)
|
1.15
|
0.98
|
2.61
|
1.40
|
0.94
|
0.69
|
|
Market capitalisationrs. In lakhs.
|
-
|
2066
|
1851
|
1520
|
16372
|
43701
|
The total
equity issued before IPO is 15.59 crores and along with reserves the net-worth
is Rs 27.74 crores as at the end of the 30th June 2022. Post IPO, the Company’s
net-worth shall stand at Rs 92.95 crores. The Book value post IPO would be 36
plus the profit surplus for the period.
The Issue is being made in terms
of Rule 19(2)(b) of the SCRR through the Book Building Process in accordance
with Regulation 6(2) of the SEBI ICDR Regulations wherein not less than 75% of
the Issue shall be Allotted to QIBs on a proportionate basis, provided that the
Company in consultation with the BRLM, may allocate up to 60% of the QIB
Category to Anchor Investors, on a discretionary basis in accordance with the
SEBI ICDR Regulations, of which one-third shall be reserved for domestic Mutual
Funds, subject to valid Bids being received from them at or above the price at
which allocation is made to Anchor Investors. In case of under-subscription or
non-allocation in the Anchor Investor Portion, the remaining Equity Shares will
be added back to the QIB Category (other than Anchor Investor Portion). 5% of
the QIB Category shall be available for allocation on a proportionate basis to
Mutual Funds only, and the remainder of the QIB Category shall be available for
allocation on a proportionate basis to all QIBs (other than Anchor Investors),
including Mutual Funds, subject to valid Bids being received at or above the
Issue Price. If at least 75% of the Issue cannot be Allotted to QIBs, the Bid
Amounts received by the Company shall be refunded. Further, not more than 15%
of the Issue shall be available for allocation on a proportionate basis to
Non-Institutional Bidders and not more than 10% of the Issue shall be available
for allocation to Retail Individual Bidders in accordance with the SEBI ICDR
Regulations, subject to valid Bids being received at or above the Issue Price.
Further, the allocation to each Non-Institutional Investor shall not be less
than Rs. 200,000, subject to availability of Equity Shares in the
Non-Institutional Portion, and the remaining Equity Shares, if any, shall be
allocated on a proportionate basis, subject to valid Bids being received at or
above the Issue Price, in accordance with the SEBI ICDR Regulations. Further,
(a) one third of the portion available to Non-Institutional Investors shall be
reserved for applicants with application size of more than Rs. 200,000 and up
to Rs. 1,000,000; and (b) two third of the portion available to
Non-Institutional Investors shall be reserved for applicants with application
size of more than Rs. 1,000,000 , provided that the unsubscribed portion in
either of the sub-categories specified in clauses (a) or (b), may be allocated
to applicants in the other sub-category of Non-Institutional Investors.
Under-subscription, if any, in any category, except the QIB Category, would be
allowed to be met with spill-over from any other category or categories, as
applicable, at the discretion of the Company in consultation with the BRLM and
the Designated Stock Exchange, subject to applicable laws.
The Issue comprises of only fresh
issue of up to 1,02,00,000 Equity Shares for cash at upper price band of Rs.
65/- per Equity Share (including a premium of Rs. 55/- per Equity Share,
aggregating up to Rs. 66 crores. The Issue shall constitute 39% of the
post-Issue paid-up Equity share capital of the Company. Notably, the issue
involves all fresh issue without any offer for sale component. Out of the issue
proceeds, Rs. 8.18 crores shall be utilized for capex for setting up of new
manufacturing unit; Rs. 19.66 shall be towards repayment of debt, Rs. 14.95
crores for working capital and balance for general corporate purposes. The debt repayment is towards the bridge loan
from the holding company which was deployed in the capex.
The Group has made several
acquisitions from time to time. The Company carefully evaluate and pursue
accretive acquisitions. Given the breadth of its product offering, and the
scale of manufacturing and customer network, the Company is positioned to grow
inorganically within its industry. The Company has gained competitive advantage
due to its recent acquisition of FibcorpPolyweave Private Limited on January 5,
2022, which will leverage to generate incremental synergies. The Company
intends to apply a selective and disciplined acquisition strategy that focuses
on enhancing scale, product diversity and geographic reach, while bolstering
financial performance through synergies and additional cash generation.
Pantomath Capital Advisors Private
Limited is the sole book running lead manager to the issue and Link Intime
India Private Limited is the registrar
to the offer.The equity shares are proposed to be listed on the Main Board of NSE
and BSE.
