Sah Polymers is the last public issue opening for subscription in December, taking the total for the month to seven initial public offerings (IPOs). 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 percent on December 30, the first day of bidding.
Retail investors are in the forefront, buying all the allotted shares. The reserved portion was subscribed 2.07 times.
High networth individuals (HNIs) have bid for 100 percent shares of the portion set aside for them, while qualified institutional buyers (QIBs) have subscribed 38 percent of the allotted quota.
Here are 10 key things to know before subscribing to the public issue:
1) IPO Date
The offer opened for subscription on December 30, and bidding will continue till January 4, 2022.
2) Price Band
The company has fixed the issue price band at Rs 61-65 per share.
3) Offer Details
The public issue consists of only fresh issue of 1.02 crore equity shares, with no offer-for-sale (OFS) part.
4) Fund Raising
The public issue will fetch the company Rs 62.22 crore at the lower end of the price band and Rs 66.3 crore at the upper end of the price band.
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5) 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.
6) Lot Size
Investors can bid for a minimum of 230 equity shares and in multiples of 230 shares thereafter. With this, the minimum investment by retail investors at the upper end of the price band would be Rs 14,950 for one lot, while the maximum would be Rs 1,94,350 for 13 lots, as they are allowed to invest up to Rs 2 lakh in a public issue.
The company has reserved 75 percent of its offer size for QIBs, 15 percent for HNIs, and the remaining 10 percent for retail investors.
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7) Company Profile
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.
8) Financials and Strengths
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.
The company possesses three competitive strengths ? product portfolio, B2B customer base across geographies and industries, and management team.
9) Promoters
The company is 100 percent owned by the promoters. Currently, Sat Industries, the promoter entity of the company, holds 91.79 percent shares in the company, and Sat Invest has 8.21 percent stake.
Asad Daud is the Managing Director, while Hakim Sadiq Ali Tidiwala is the Whole Time Director on the board.
10) Listing and Allotment Dates
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.
Currently, its shares are available at a premium of around 7 percent to the upper price band in the grey market. The grey market is an unofficial trading platform for IPO shares, analysts said.
Pantomath Capital Advisors is acting as merchant banker to the issue, while Link Intime India is the registrar to the offer.
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