Sah Polymers IPO intends to raise Rs. 66 crore through a fresh issue of 1,02,00,000 equity shares. Sat Industries, which is the promoter, holds 91.79% stake in the company.. The Udaipur based company is primarily engaged in manufacturing and selling of polypropylene (PP)/ high density polyethylene (HDPE) FIBC bags, woven sacks, HDPE/PP woven fabrics and woven polymer based products.

Bidding dates 30-Dec-22  to  4-Jan-23 
Issue  Size (Fresh Issue)10,200,000 Shares
Issue Size  (amount )₹ 66 Cr
Face Value in Rs. 10
Bid Lot shares230 shares
Price Band₹ 61 – 65 
Issue Structure :

Anchor Book

Sah Polymers IPO allotted 45,90,000 shares to a total of 3 anchor investors raising ~ Rs. 30 crore. This amounts to 45% of the total issue size. The anchor investors are Maven India Fund, Saint Capital Fund, Leading Light VCC – Triumph Fund.

About Sah Polymers

  • The company was incorporated as ‘Peacock Continental Ltd’ at Udaipur on April 20, 1992.
  • The company was promoted by Sat Industries Ltd.
  • Sah Polymers Ltd. is engaged in manufacturing and selling Polypropylene (PP)/High-Density Polyethylene (HDPE) FIBC Bags, Woven Sacks, HDPE/PP woven fabrics.
  • They offer customized bulk packaging solutions to business-to-business (“B2B”) manufacturers catering to different industries such as AgroPesticides Industry, Basic Drug Industry, Cement Industry, Chemical Industry, Fertilizer Industry, Food Products Industry, Textile Industry Ceramic Industry and Steel Industry.
  • The company is a Del Credere Associate cum Consignment Stockist (DCA/ CS) of Indian Oil Corporation Ltd and also operates as Dealer Operated Polymer Warehouse (DOPW) of IOCL for their polymer division.
  • It has presence in 5 states and 1 union territory in the country and exports products to 14 countries like Algeria, Togo, Ghana, Poland, Portugal, France, Italy, Dominican Republic, USA, Australia, UAE, Palestine, UK and Ireland.
  • one manufacturing facility located at Udaipur, Rajasthan with an installed production capacity of 3960 m.t. p.a.
Manufacturer and Exporter of PP Woven Bags

Sah Polymers IPO: Financials

Particulars / (₹ Cr)3m FY23FY22FY21Fy20
Revenue from Operations 27.2280.5155.0749.1
Revenue Growth (%) – 46.20%12.16% 
EBITDA as stated 2.367.733.32.61
EBITDA Margin (%)  8.56%9.52%5.96%5.24%
Profit/Loss Before Tax 1.725.491.620.51
Net Profit for the period 1.254.381.270.3
Net Profit (%) as stated 4.60%5.43%2.31%0.60%
Equity Share Capital 15.615.615.615.6
Other Equity# 12.1411.054.493.21
Net worth as stated 27.7426.6520.0918.81
EPS 0.80^ 2.810.820.19
RONW (%) 4.51%^ 16.42%6.33%1.58%
NAV-Basic (₹)~ 17.79^ 17.0912.8812.06
Post Issue share Cap25.8
FV in Rs. 10
IPO price65
EPS post IPO FY23  ann1.94
PE 33.5
Market Cap Rs. Cr. 168
Market Cap/Sales2.08

Assessment: Sah Polymers IPO

  • The company proposes to utilize the net proceeds towards funding of the following objects setting up of a new manufacturing facility to manufacture new variant of Flexible Intermediate Bulk Containers (FIBC), repayment/ Prepayment of certain secured and unsecured borrowings in full or part availed by the company and the subsidiary company, funding the working capital requirements of the company, and general corporate purposes.
  • one of the promoters of the company, Aeroflex Industries, is in the list of willful defaulters, as per CIBIL.
  • There is significant fluctuation in raw material cost due to Russian Ukraine conflict.
  • Order book is rolling and is about 2-3 months.
  • Two promoters group companies are in same field though promoters claims they have different target industries.
  • On the post-issue equity, PE works out to 36x.
  • Listed peers such as Rishi Techtex trades at PE of 15.7x , Jumbo Bag at 6.3x, SMVD Poly Pack at 15.2x, EMMBI Industries at 11.2x.
  • Company’s operations are B2B and net margins are in range of 5%.
  • Company’s FY22 revenue of Rs. 81 cr, has equal contribution from domestic and export sales.
  • Company has stated that jump in receivables is also on account of company having started exports to USA.
  • Promoter company Sat Industries Ltd (SIL) which owns Sah polymers is listed and trades at a PE of 19.2x. It has recently seen upward price movement ahead of this issue.
  • At this point of time, Iam not inclined to subscribe to Sah Polymers IPO . Further recent mainboard listing have been quite subdued.
  • Please do your own diligence.

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. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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