Sah Polymers – the company and management:
Packaging company Sah Polymers is coming up with IPO later this year. The company has filed a draft red herring prospectus (DRHP) with SEBI. Sah Polymers is coming up with a fresh issue of an initial public offering of up to 102,00,000 equity shares with a face value of INR 10. The company may consider the pre-IPO placement of up to 20,40,000 Equity Shares. The number of equity shares issued pursuant to the Pre-IPO placement shall be reduced from the fresh issue, subject to Compliance with Rule 19(2)(B).
Sah Polymers company was founded under the name of Peacock Continental Limited” in Udaipur Rajasthan on April 20, 1992. The Company changed its name to “Sah Polymers Limited” in the year 1998. Sah Polymers India Limited has over 25 years of experience in the packaging industry. The company offers customized bulk packaging solutions to business-to-business manufacturers. Sah Polymers is also working as a third-party manufacturer to manufacture tape and fabric based on customers’ requirements. The company is ISO certified with ISO-9001:2015 and the government recognized it as a star export house.
Read the complete company insights here – “Sah Polymers Company Profile – Key products, finance, management team, strategic insights”
Sah Polymers Promoters:
The promoters of the company are “Sat Invest Private Limited” and “A Flex Invest Private Limited”. The shareholding pattern of Sat Invest Private Limited is as follows. Dawood Investment Private Limited holds an equity share of 3,57,000 which is 19.97 % of the total equity share of Sat Invest. Shehnaz D Ali who is the chairman of the company holds an equity share of 1,34,179 which is 7.50%. Asad Daud is the managing director of the company and holds 21.12% of Sat Invest which counts 3,77,635 equity shares. Space Age Polymers LLP holds 7,16,347 equity shares which are 40.07% of the total equity shares held by Sat Invest.
Sah Polymers Financial analysis:
Sah Polymer’s total revenue increased by 11% from INR 4991 lakhs in FY 2020 to INR 5534 lakhs in FY 2021 on a standalone basis. However, total expenses have also increased by 9% from INR 4939.5 lakhs in FY 2020 to INR 5372.2 lakhs in FY 2021. Above all, the company has been incurring profits during the mentioned period.
Read financial details of the company here – “Sah Polymers Company Profile – Key products, finance, management team, strategic insights”
Sah Polymers India IPO pricing and issue size:
The company is coming up with an initial public offering with a fresh issue of up to 102,00,000 equity shares with a face value of INR 10. Sah Polymers India Limited is planning to list its shares on both the Stock Exchanges- BSE and NSE. Pantomath Capital Advisors Private limited is the book Running Lead Managers of this IPO and LINK INTIME INDIA PRIVATE LIMITED is the registrar for this IPO.
The company’s equity shares outstanding before the initial public offer stand at 1,55,96,000 equity shares with a face value of Rs. 10 each. Qualified Institutional Buyers (“QIBs”, and such portion, the “QIB Portion”) portion will be up to 75% of the offer on a proportionate basis. Up to 60% of the QIB Portion is to allocate to Anchor Investors on a discretionary basis. Out of this 60% at least one-third shall be reserved for allocation to domestic Mutual Funds only. The remainder of the Net QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders (other than Anchor Investors), including Mutual Funds. Up to 10% of the Offer shall be available for allocation to Retail Individual Bidders. Up to 15% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders
Utilization of Net Proceeds:
The company is planning to utilize the Net Proceeds for the funding of the following objects:
- Sah Polymers will set up a new manufacturing facility to manufacture a new variant of Flexible Intermediate Bulk Containers (FIBC). The total investment in this project will be INR 845.25 lakhs.
- The company is planning to repay/ prepay certain secured and unsecured borrowings in full or part availed by the Company and its Subsidiaries. The amount proposed to utilize for this purpose will be INR 1,666.23 lakhs.
- Sah Polymers will also fund the working capital requirements of the Company. The total amount spent for this purpose will be INR 1,495.81 lakhs
- The rest of the funds will be available for general corporate purposes.
Competition for the company:
Sah Polymers is planning to raise funds for its expansion through initial public offerings (IPO). Other packaging companies like Polyplex and Uflex are doing well in terms of financial performance. The packaging industry in India is in a nascent stage. The government of India is pushing to ban one-time plastic use in packaging. These factors will benefit Sah Polymers India Limited.
Other major companies that cater to the packaging industry are available at a reasonable valuation. Polyplex shares are available at 12.9 PE. The company is available at 29.1% return on capital employed and 18% return on equity. Uflex share is available at 3.95 PE. The company is available at 16.5% return on capital employed and 18.4% return on equity. The current price of the Uflex share is 618 while Polyplex shares are available at a current price of INR 2332 on stock exchanges. It is yet to see at which valuation Sah Polymers is coming up in its Initial public offering.
|IPO Review||Subscription date and other details|
|Subscription Dates||Coming Soon|
|Anchor Investor Bidding Date||Coming Soon|
|BID/OFFER opens on||Coming Soon|
|BID/OFFER closes on||Coming Soon|
|Price Band||Coming Soon|
|Fresh Issue of Shares||102,00,000 equity shares|
|Equity Shares outstanding before the Issue||1,55,96,000 Equity Shares|
|Minimum bid (lot size)||Coming Soon|
|Face Value||INR 10|
|Listed on||BSE and NSE|