Swashthik Plascon IPO (BSE SME) Overview

Swashthik Plascon entails to raise Rs 40.76 crores. The issue is entirely a fresh issue of 47.39 lakh shares. Swasthik Plascon is a company that specializes in the production of PET bottles and PET preforms.

IPO opensNov 24, 2023
IPO ClosesNov 29, 2023
IPO Size (Rs.)₹40.76 Cr
IPO Size (shares)4,739,200 shares
BreakupFresh issue only
Face Value:₹ 10
IPO Price in Rs :₹80 to ₹86 
Minimum Lot1600 Shares
Listing AtBSE SME
QIB (includes anchor, Market Maker)~50 %
NII Quota~15%
Retail Quota~35%
 Lead ManagerShreni Shares Limited
RegistrarBigshare Services
Market makerNikunj Stock Brokers

About Swashthik Plascon;

  • Swashthik plascon was established in the year 2007 at Pondicherry
  • Company is mainly engaged in the business of manufacturing of a wide range of PET Bottles and PET Preforms which includes PET Bottles for Pharmaceutical application, Liquor application, FMCG Packaging, House Hold applications, Dish wash liquid packaging, Repellent dispenser etc. and PET Preforms for Soft Drinks bottles, Packaged Drinking Water bottle and Juice bottles.
  • The unit was initially commissioned with two numbers of 200 ton injection machines of L&T Demag with LTM Moton and GWK Prasad for driers and chillers and has now installed capacity of six L&T Demag injection machinesof 200 tons. Preforms are manufactured in various neck types,neck sizes,weights to suit to the requirement of the market.
  • More than 200 product’s.
  • Company is promoted by Mr. Parasmal Mahendra Kumar, Mr. Parasmal Ravindra Kumar, Mr. Parasmal Dharmendra Kumar, Mr. Misrimal Parasmal, Mrs. P Umrao, Mrs. Mahendrakumar Nirmala, Mrs. R Asha Jain and Mrs. D Anita.

Financials: Swashthik Plascon

Particulars / Rs. Lacs30-Sep-232023
Total Revenue6973.654,589.10
Profit after Tax528.48302.19
Share Capital1282.481,282.48
Net worth2564.072,037.09
Earnings Per Share4.124.99
Net Asset Value Per Share (₹) (Pre Bonus)42.3433.95
Net Asset Value Per Share (₹) (Post Bonus)42.3433.95
Total borrowings6231.665,879.54
Post issue Share Capital1,756 
IPO price86.0 
EPS Fy231.7 
PE Fy2350.0 
EPS Fy24 (annualized)6.0 
PE Fy24  (annualized)14.3 
Market cap in Lacs15,101.6 
Market Cap/sales3.3 

Anchor: Swashthik Plascon

Swashthik Plascon IPO: Salient Points

  • Polyethylene terephthalate (PET) bottle market, valued at USD 95,400 million in 2022, will reach USD 132583.69 million by 2030, growing at a CAGR of 4.20% during the forecast period of 2023 to 2030
  • Net proceeds from the IPO are proposed to be used:
Sr NoParticularsAmount
1.Funding capital expenditure for developing new manufacturing facilities and installation of Plant and Machinery1448.45
2.Funding of capital expenditure requirements of our Company towards purchase of Solar Power Plant1040.17
3.Purchase of Plant and Machinery at our existing Manufacturing facility104.43
4.Funding Working Capital Requirements of our Company1044.01
  • For Expansion, Company intendS to establish a new manufacturing facility which will increase the present capacity and subsequently boost the sales and profitability. As part of such investment, IT will incur expenditure towards construction and purchase of various Plant and Machinery amounting to Rs. 1,540.01 Lakhs from Net Proceed of the Issue.
  • To cater to the growing demand from its existing customers and to meet requirements of new customers, they intend to expand and upgrade the manufacturing capacities for existing products that they are in the process of developing and commercializing.
  • Preforms are made with the best quality food grade resin to accomplish Quality and to ensure safety to the users.  As a result they have marque clients in different categories.
  • Introduced sewer neck bottle performs for water.
  • Now 10 machines in manufacture of preforms and caps for water bottles.
  • Revenue Segment wise: water bottles’ – 25-30%, preform segment – 70%.
  • Good demand. Management claims they have been sell whatever they produce.
  • Peers:
Name of CompanyCMP (₹)FV (₹)Revenue (cr)Net Profit (₹ cr)NPMPERoNW (%)Mcap (cr)Macp/sales
Swashtik Plascon86.01045.893.026.6%50 (14.3)14.951513.3
Technopack Polymers94.71011.522.3720.6%23.713.86%51.24.4
  • Good horizontal diversification:. Have been diversifying from :
    • water bottles (Jaldhara, RSK aqua, indirectly for kingfisher)
    • Beverages & Liquor (Radio Khaitan, JDL, Balaji, amrut)
    • Pharma Bottles- general bottles
    • FMCG ( Pril bottle for Jyothy Labs) -dish washer
    • Repellant’s: (Godrej for exports),
    • Sacmi Water Bottle Caps for water bottles, juices caps, and for Campa bottle (Reliance),
    • Juice (juicy, daily fresh, asian beverages)
    • Soda
    • Jar ( aavin, Yamini pickles indirectly to ITC, Britanna, RKG)\
    • Edible caps Oil jars- kaleshwari, deepam oil.
    • 20 liters cans
  • Revenue segment wise: Mineral water – 40%, Juice & soda – 20-25%, FMCG -10%, Pharma and others.
  • Their manufacturing process requires uninterrupted supply of Electric & Power which are met through local authorities and to meet exigencies in case of power failure, they have also installed D.G. sets at the manufacturing unit. Now company intends to set up a 3 MW SolarPower Plant which will reduce its operating costs substantially which is very high at 90 Lacs.
  • Due to logistics cost products cater to south part of the country. (Tamilnadu, Kerala, Andhra, Puducherry)
  • All companies brought into Swashthik Plascon in 2023 whish is a holding as well as a manufacturing company. Others are 100% subsidiaries of this companies.
  • Unit II new plant for pharma and beverage bottles will be complete in 3-4 months.
  • Good brand name.
  • Best vendor award from Jyothy Labs for Pril dishwasher bottles. Now it meets full requirement of Jyothy Labs.
  • working capital will help it to produce more through better capacity utilization.
  • Capacity utilization: Preforms 60-70, Pharma and bottles 80-85. Good improvement 2023. Can be much higher with working capital from IPO.
  • Swashthik Plascon IPO is coming at a PE ratio of 50x(fy23 earnings) and 14.3x (fy24 annualized earnings). Sharp jump in revenues is due to consolidation of two other companies into swashthik Plascon.
  • I intend to apply in Swashthik Plascon IPO. Company seems to enjoy good demand for its products and has a good record of diversification in horizontal product lines.
  • GMP as reported on social media has been around Rs. 7.
  • Shreni Shares Private Limited is the lead manager with quite a decent record of good listing and performance subsequently. Past issues handled by them include KK Shah Hospitals Limited, Marco Cables & Conductors Limited,Meson Valves India Limited, C P S Shapers Limited, AccelerateBS India Limited, Global Pet Industries Limited, Veefin Solutions Limited, Sancode Technologies Limited, Bright Outdoor Media Limited, Srivasavi Adhesive Tapes Limited, Arihant Academy Limited, PNGS Gargi Fashion Jewellery Limited, DAPS Advertising Limited, Olatech Solutions Limited etc.
  • SME IPO are more risky than mainboard IPOs.
  • Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational/ exploratory purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared 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.

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