Divyadhan Recycling Industries IPO: Valuation, Date & GMP

Divyadhan Recycling Industries IPO-Complete Overview

Divyadhan Recycling Industries IPO an SME IPO is a book-built issue of Rs.24.17 crore by Divyadhan Recycling Industries Limited, established in May 2010. It produces recycled pellets and recycled polyester staple fiber (R-PSF). To produce recycled polyester staple fiber, the company holds certifications for both the Quality Management System (ISO 14001:2015) and the Environmental Management System (ISO 14001:2015).

The business is active in the following two verticals:

Recycled Fiber: Using PET bottles-the kind used for Coke, soda, water, and other post-consumer PET bottles-the company creates synthetic fiber known as Recycled Polyester Staple Fiber (R-PSF).

Recycled Pellets/chips: The same raw materials used to make recycled polyester staple fiber are also used in the production of recycled pellets.

Situated in Village Kalyanpur, Tehsil Baddi, District Solan Himachal, the company's manufacturing operation has an annual capacity of 8030 metric tons for fiber and 4320 metric tons per annum for pellets.

This new SME IPO is to be launched on 26 September 2024, and its ‘initial public offering’ will end on 30 September 2024. 

 

Divyadhan Recycling Industries IPO Overview

The Rs.24.17 crore Divyadhan Recycling Industries IPO is an entirely fresh issue of 37.76 lac Shares. 

This SME IPO date is from September 26-September 30, 2024. Divyadhan Recycling Industries IPO price is Rs.60 to Rs.64 for each Share. The expected IPO listing date is on Friday, 04 October 2024, and listing at NSE and SME.

To open a demat account and apply for the IPO, Click Here.

Company Financial

The company’s revenue rose by 2% and PAT grew by 10% during FYs ending 31 March 2024 and 31 March 2023.

(Amount in Lac)

 

Revenue Bifurcation

The revenue bifurcation for various activities is shown below:

(Amount in lac)

 

Geographical-wise Revenue Breakdown 

(Amount in lac)

 

Segment-wise Revenue Breakdown During The Last Three Fiscals

(Amount in lac)

 

 

The Objective of The Issue

The company desires to use the Net Proceeds from the Issue to fulfill its following goals:

• Funding the company's needs for working cash

• To cover the issue's costs

• General corporate purposes.

 

Peers of Divyadhan Recycling Industries Ltd.

 

Note:-

The basic EPS of the peers is for the financial year ending 31 March 2024.

The peers' P/E Ratio is computed based on the closing market price of the Share as of 16 September 2024.

 

The IPO price is Rs.60 to Rs.64 for each Share.

Evaluation of P/E Ratio

Considering the FY ended 31 Mar 2024 with an EPS of Rs.2.41 from the last year, the resulting P/E ratio is 26.56x.

Considering the weighted EPS of Rs.2.03 for the last three years, the P/E ratio is 31.52x.

Comparative Analysis With Listed Peers

The average P/E Ratio of the industry is 68.36x.

In simple words, the P/E ratio of Divyadhan Recycling IPO (26.56x), compared with the industry’s average P/E of 68.36x, has an undervaluation (on a P/E Ratio basis only). Hence the price of the Share seems fairly (fully) priced for the investors when considered based on the average P/E ratio of the industry.

 

IPO's Strengths 

• Long-Term Business Plan

• A method that considers the environment

• Friendly interactions with our clients

• High-quality outputs

 

IPO’s Weaknesses

• Restricted regional reach with just one production facility

• PET bottles serve as the main source of raw materials

• Price swings for raw materials (PET bottles)

• Rivalry with other recycling businesses

• Changes in regulations impacting the recycling sector.

 

Divyadhan Recycling Industries IPO GMP Today

Divyadhan Recycling Industries IPO GMP is Rs.0 as of 24 September 2024. With a price of Rs.64, the estimated IPO listing price is Rs.64 at the time of writing this information.

IPO Timetable (Tentative)

The IPO date is from September 26 to September 30, 2024, with allotment on October 01, refund initiation on October 03, and listing on October 04, 2024.

 

Divyadhan Recycling Industries IPO Details 

The IPO with a Face Value of Rs.10 per share offers a total issue size of 3,776,000 Shares (Rs.24.17 Cr).

Divyadhan Recycling Industries IPO Lot Details 

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (2000 Shares) amounting to Rs.1,28,000 and in multiples thereof, while for HNI investors, the minimum Lot is 2 (4000 Shares) amounting to Rs.2,56,000.

 

Divyadhan Recycling Industries IPO Reservation (% of Net Issue)

 

Promoters And Management of Divyadhan Recycling Industries Ltd.

• Mr. Pratik Gupta

• Mr. Varun Gupta.
  
  

IPO Lead Managers

• Narnolia Financial Services Ltd.
  
  

Dividend Policy

The company hasn’t paid any dividends in the last three FYs.

 

Conclusion

The business is in the production of pellets and staple fiber made from recycled polyester. With cost reduction and increased value-added features for its goods, it posted nearly stagnant top lines for the previous three fiscal years, but a notable surge in bottom lines for FY23 and FY24. It works in a crowded and fiercely competitive market. 

FY24 earnings suggest that the issue is priced fully. Even though it looks to be fully priced, the issue is well-positioned for future growth and better times. Divyadhan IPO is showing a 0% gain or loss in its listing price in the grey market as of the date of writing this content. Hope this blog helped you with the information you were seeking.

 

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.

Disclaimer: 

The content is purely for educational and information purposes only. We do NOT encourage/advise/suggest our active readers to be involved in any kind of buying or selling securities activities. Always consult your eligible financial advisor for investment-related decisions. The author does NOT through this blog intend to involve readers in trading.  

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