The Indian stock exchanges, particularly the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) have emerged as the top players in the world in terms of the number of Initial Public Offerings (IPOs) in 2023. Going ahead, several more IPOs are waiting in the banks to hit the markets during the remainder of the calendar year.
One such IPO – the Pyramid Technoplast IPO – is poised to open for public subscription on Friday, August 18. Through this IPO, the issuing company plans to raise Rs. 153.05 crores at the upper price band of Rs. 166 per equity share. Continue reading to learn more details about the Pyramid Technoplast IPO and decide whether you should invest in it or not.
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Incorporated in 1997, Pyramid Technoplast Limited is an India-based industrial packaging company. It manufactures moulded polymer-based products (popularly known as polymer drums) mainly used in chemical, agrochemical, specialty chemicals, and pharmaceutical industries for their packaging requirements. It also manufactures Mild Steel (MS) drums for packaging and transporting highly volatile chemicals.
Presently, the company has six manufacturing units in India, four located in Bharuch and two at Silvassa. The total installed capacity of the polymer drum manufacturing unit is 20,612 MTPA, the Intermediate Bulk Container (IBC) manufacturing unit is 12,820 MTPA, and the MS Drums manufacturing unit is 6,200 MTPA. As per a Marketysers report, Pyramid Technoplast Ltd. is India's leading manufacturer of IBCs.
The table below depicts the financials of Pyramid Technoplast Ltd. for the last three financial years. All information has been as per the company’s Draft Red Herring Prospectus (DRHP):
|Particulars||As of and For FY Ending March 31|
|Revenue From Operations||480||400||314|
|Profit After Tax||32||26||17|
|Earnings Per Share (Diluted)||10||8||5|
|Net Asset Value (In Rs/share)||31||24||16|
|Return on Equity||30%||35%||35%|
|Return on Capital Employed||21%||21%||21%|
*Amount in Crores
As you can see, the company’s net worth has thrived by more than 50% in each of the last two financial years. Subsequently, the revenues have also surged. However, the borrowings have more or less remained stable.
The last three years profit margins and return on equity have been highly competitive as compared to other companies in the same industry. The company has also maintained an impressive asset turnover ratio, considering that it’s engaged in a capital-intensive business.
Pyramid Technoplast IPO is estimated to be worth up to Rs. 153 crores, comprising of a fresh issuance of up to Rs. 91 crores and an offer for sale of up to Rs. 62 crores. The face value of the shares is Rs. 10 each, and the price band has been fixed in the range of Rs. 151 to Rs. 166 per equity share. As an investor, you can apply for a minimum of 90 shares (1 lot) and multiples thereof.
The issue opens for public subscription on 18 August and closes on 22 August 2023. 30% of the offer will be reserved for Qualified Institutional Buyers (QIBs), 20% for Non-Institutional Buyers (NIBs), and 50% for retail investors.
The table below summarises the details of the Pyramid Technoplast IPO:
|IPO Date||18 Aug to 22 Aug 2023|
|Face Value||Rs. 10 per share|
|Price Band||Rs. 151 to Rs. 166 per share|
|Lot Size||90 shares|
|Total Issue Size||9,220,000 shares (aggregating up to Rs. 153.05 crores)|
|Fresh Issue||5,500,000 shares (aggregating up to Rs. 91.30 crores)|
|Offer for sale||3,720,000 shares (aggregating up to Rs. 61.75 crores)|
Based on the company’s ability to grow consistently and high performance among the industry peers, Pyramid Technoplast IPO looks attractive. The valuation seems to be on the fairer side as well. The P/E ratio also looks reasonable. So, subscribing to this IPO isn’t a bad idea. However, make sure to back your decisions with fundamental research and analysis.
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