Particulars	Jun 30  FY 23	Mar 31  FY 23	Mar 31  FY 22
HDPE Pipe & Coils	98.20%	97.19%	90.82%
HDPE Sprinkles System	0.60%	0.60%	3.24%
MDPE Pipes	1.55%	2.21%	4.07%
PPR Pipes	0.00%	0.00%	1.87%
Total Revenue	100.00%	100.00%	100.00%

 

Revenue By operations

Company relies heavily on its core operations for revenue. Other operating income supplements this, contributing to the total revenue from operations.

( in % age)

Particulars	Jun 30 FY 23	Mar 31  FY 23	Mar 31  FY 22
Revenue from operations	98.34%	99.04%	97.68%
Other Operating Income	1.66%	0.96%	2.32%
Total Revenue from operations	100.00%	100.00%	100.00%

 

 

 

The Objective of the Issue

The company intends to use the net proceeds for the following objectives.

• To Meet Working Capital Requirement

• To Meet the Capital Expenditure

• General Corporate Purpose

 

Promoters and Management of AIK Pipes And Polymers IPO

1. Mr. Imran Khan.

2. Ms. Tahira Sheikh.

Pre-issue Promoter Shareholding	100%
Post-issue Promoter Shareholding	73.47%

AIK Pipes And Polymers IPO Lead Managers

•  Shreni Shares Limited

 

Peers of AIK Pipes And Polymers IPO

Company shows a balanced performance compared to peers, reflecting favorable valuation and earnings.

Name of the company	Face value (Rs. per share)	P/ E	EPS (Basic) (Rs.)
AIK Pipes And Polymers Limited	10.00	21.54	2.18
Rex Pipes & Cables Industries Limited	10.00	16.67	4.21
Prince Pipes and Fittings Ltd	10.00	64.75	10.98

 

Evaluation

The IPO is priced in the range of Rs 89 per share.

Evaluation of P/E Ratio

- Considering the FY23 EPS of Rs 4.13 from the last year, the resulting P/E ratio is 21.54x.

• Taking into account the weighted EPS of Rs 3.56 for the last three years, the P/E ratio amounts to 25x.
•   

Comparative Analysis with Listed Peers

- Prince Pipes and Fittings Ltd has a P/E ratio of 29.33x (the highest).

- Rex Pipes & Cables Industries Limited has a P/E ratio of 14.22x (the lowest).

- The industry's average P/E is 21.78x.

Consequently, the IPO Price range at a P/E of 21.54x to 25x is considered overvalued.

 

Dividend Policy

The company hasn't paid dividends in past fiscal years. Whether we can pay them in the future depends on factors like profits, past dividend trends, capital needs, legal restrictions, and other relevant considerations evaluated by our Board.

 

IPO's Strengths

1.Customer Satisfaction & Long-Term Revenue: Long-standing customer relationships, driven by product criticality and technical expertise. They engage in multi-layered interactions, cross-selling, and conduct regular senior management reviews to enhance customer satisfaction and drive repeat business.

2.Scalable Business Model: Their order-driven model, resource optimization, and successful scalability in recent years. They have the capacity for upward scaling, aggressive marketing, and a commitment to superior quality that aligns with market demands.

3.Cost-Efficient Production & Timely Fulfilment: Timely order fulfilment is ensured through efficient procurement policies for cost-effective production. Their continuous efforts in procurement efficiency enable effective inventory management and timely product delivery.

4.Strong Supplier Relationships: Enduring relationships with suppliers ensure quality and timely raw material supplies. Strong ties contribute to efficient inventory management, fostering repeat business and long-term growth.

5.Quality Assurance & Standards: ISO 9001:2015 certification underscores their commitment to quality. Adherence to stringent standards throughout the manufacturing process ensures defect-free product delivery, providing a competitive advantage.

 

 

IPO's Weaknesses

1.Customer & Supplier Dependency: Heavy reliance on top customers (contributing 100% of revenues) and key suppliers (contributing up to 99.63% of purchases) poses a threat to business continuity if relationships are compromised.

2.Raw Material Cost and Supply: Vulnerability to fluctuating raw material costs and potential disruptions in supply could impact product pricing, supply, and overall business operations.

3.Cash Flow Concerns: Historical negative cash flows may adversely affect business operations and future prospects.

4.Machinery & Operational Risk: Despite machinery breakdown insurance, operational risks persist, potentially impacting business, financial condition, and operational results.

5.Quality Standards & Customer Expectations: Failure to meet evolving customer expectations or maintain quality standards may negatively affect business, results, and financial condition.

6.Regulatory Compliance & Approvals: Dependencies on regulatory approvals and the risk of non-renewal may result in cost overruns, disruptions, and potential restrictions on business operations.

 

IPO GMP Today 

The Last GMP of AIK Pipes And Polymers IPO was Rs.5.

 

Conclusion

AIK Pipes And Polymers Limited is set to launch its IPO from December 26 to 28, 2023, offering shares at Rs. 89 with a total issue size of Rs. 15.02 CR. The company demonstrates impressive financial growth, emphasising HDPE Pipe & Coils in its product portfolio.

Noteworthy strengths include a focus on customer satisfaction, scalability, cost-effective production, and robust supplier relationships. However, potential challenges such as customer and supplier dependency, raw material cost vulnerabilities, and machinery risks should be carefully evaluated by prospective investors.

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

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