Kahan Packaging IPO entails to raise ₹ 5.76 Cr. Kahan Packaging IPO comprises entirely of a fresh issue of up to 7,20,000 equity shares . Kahan Packaging Limited provides bulk packaging solutions to B2B manufacturers catering to industries like Agro-Pesticides, Cement, Chemical, Fertilizer and Food Products.
IPO opens
Sept 6, 2023
IPO Closes
Sep 8, 2023
IPO Size (Rs.)
₹5.76 Cr
IPO Size (shares)
720,000 shares
Breakup
Fresh issue only
Face Value:
₹ 10
IPO Price in Rs :
₹ 80
Minimum Lot
1600 Shares
Listing At
BSE SME
NII Quota
50.00%
Retail Quota
50.00%
Lead Manager
Hem Securities Limited
Registrar
Purva Sharegistry
Market maker
Hem Finlease Ltd
About Kahan Packaging Limited:
The company’s two manufacturing facilities are located in Thane, Maharashtra.
Prashant Jitendra Dholakia and Rohit Jitendra Dholakia are the Promoters of our Company.
Company started its operations in the year 2016, since then has been in the business of manufacturing and supply of Polypropylene (PP)/ High Density Polyethylene (HDPE) Woven Fabric- Laminated, HDPE/PP woven sacks, Woven Fabric- Un- Laminated, PP Woven Bag, PP Woven Bag with Liner, Printed Laminates for Flexible Packaging, woven polymer based products of different weight, sizes and colors as per customer’s specifications.
It offers customized bulk packaging solutions to business-to- business (“B2B”) manufacturers catering to different industries such as Agro Pesticides Industry, Cement Industry, Chemical Industry, Fertilizer Industry, Food Products Industry.
HDPE/PP are two commonly used materials in the bulk packaging industry due to benefits which includes durability, lightweight, versatility, recyclability, chemical resistance, moisture resistance, cost-effective, high tear resistance which has lower carbon footprint during transportation due to its lightweight nature.
The installed production capacity of Factory-I for woven fabrics is 2,600 m.t. p.a. which is located Asangaon, Maharashtra.
Company has expanded its business and set up new manufacturing unit and installed Multi color (up-to 8 Color) Roto Gravure Printing Machine for flexible packaging and printing process including polyester, Nylon, BOPP, Foil, low and high density polyethylene polypro plane and paper with two sided printing facilities with high speed hot air dryers with installed production capacity of 500 m.t. p.a.
Financials: Kahan Packaging IPO
Particulars / Rs Lacs
FYE23
FYE22
FYE21
Total Income
1,751.79
1,587.95
1,211.78
PBT
130.69
24.55
7.36
Profit/(loss) after tax
103.38
19.77
1.57
Share Capital
100
50
50
Net Worth
172.91
69.53
49.75
Basis/diluted EPS
10.34
1.98
0.16
Net asset value
17.29
13.91
9.95
Total Borrowings
773.9
616.58
442.29
Post issue Share Capital
272
FV
10.0
IPO price
80.0
EPS Fy23
3.8
PE Fy23
21.0
Market cap in Lacs
2,176.0
Market Cap/sales
1.2
Kahan Packaging IPO: Salient Points
Promoters Post Issue Share Holding shall stand at 73.49%.
With the continuous growth in industries such as the agro Pesticides, Cement, Chemical, Fertilizer, Food Products and others, opportunities for growth in Packaging industries have increased and thus Kahan Packaging aim to tap these markets for further marketing & supply.
For the financial year ended March 31, 2023 & March 31, 2022 it derived major portion of r revenue from the state of Maharashtra i.e. 98.82% and 98.33%, respectively.
Company intends to utilize the Proceeds of the Issue to meet the following objects: –
Sr. No
Particulars
Amt (Rs. in lakhs)
1.
To meet working capital requirements
400.00
2.
General Corporate Purposes
94.07
Total
494.07
Overall capacity utilization is detailed below:
Product Name
Particulars
Uni ts
FY 2020-21
FY 2021-22
FY 2022-23
Existing Installed Capacity (p.a.)
PP Woven Fabrics
Installed Capacity
KG
26,00,000
26,00,000
26,00,000
26,00,000
Actual Production
KG
12,98,650
11,44,909
12,95,017
Capacity Utilization (in %)
49.95%
44.03%
49.81%
\
Kahan Packaging manufacturing unit is strategically located at Thane providing it with strategic advantage.
Kahan Packaging has plans to diversify its product portfolio. Company is expanding its business and set up new manufacturing unit and installed Multi color (up-to 8 Color) Roto Gravure Printing Machine for flexible packaging and printing process including polyester, Nylon, BOPP, Foil, low and high density polyethylene polypro plane and paper with two sided printing facilities with high speed hot air dryers.
key performance indicators
Particulars
For the year ended
March 31, 2023
March 31, 2022
March 31, 2021
Revenue from Operations
1,751.79
1,587.95
1,211.78
EBITDA
200.92
81.06
77.29
EBITDA Margin
11.47%
5.10%
6.38%
Profit After Tax (PAT)
103.38
19.77
1.57
PAT Margin
5.90%
1.25%
0.13%
Net Worth
172.91
69.53
49.75
ROE
85.28%
33.16%
3.20%
ROCE
19.77%
10.69%
11.64%
Its PE ratio is 21x (fy23 earnings).
Peers
Company
Revenue
CMP
FV
PE
RoNW%
BV (Rs.)
Kahan Packaging Limited
1755.93
80
10
21
59.79%
17.29
Sah Polymers Limited
9721.62
116
10
87.1
4.29%
33.95
Rishi Techtex Limited
10725.11
25.2
10
14.4
3.65%
38.45
Uflex Ltd
681700.88
455
10
24.9
8.40%
402.03
I intend to apply in Kahan Packaging IPO subject to availability of funds. It may see record subscription.
This is a very small issue and could be heavily subscribed.
GMP as reported on social media has been around Rs. 70.
Hem secuities is the Lead Manager to the issue. The IPOs lead managed by them have given a good return to the investors. These include names like Asarfi Hospital Limited, Kaka Industries, Green Chef, Vasa Denticity, Chaman Mettalics, Hemant Surgicals, Labelkraft, Concord Control Systems Limited, Earthstahl & Alloys Limited, Silicon Rental Solutions Limited, Krishna Defence and Allied Industries, Prevest Denpro Limited etc.
SME IPO are quite illiquid and volatile and exit options sometimes is delayed.
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.
