Polysil Irrigation Systems Ltd IPO: Review, Valuation, Date & GMP

Polysil Irrigation Systems IPO - Complete Overview

Polysil Irrigation Systems, founded in 1985, is a leading player in the micro irrigation industry, focusing on drip and sprinkler irrigation solutions. They manufacture and sell a wide range of products, including HDPE pipes, pipe fittings, filters, valves, controllers, and more, all under the brand 'Polysil'. These products are known for their quality and adherence to standards set by the Bureau of Indian Standards (BIS).

The company distributes its products through a network of distributors and dealers across India, serving both institutional markets and open market sales, particularly targeting farmers. As of July 31, 2023, they operated through 8 distributors and approximately 425 dealers in various states including Gujarat, Tamil Nadu, Maharashtra, Andhra Pradesh, Karnataka, Madhya Pradesh, Uttar Pradesh, Rajasthan, and Haryana.

Polysil Irrigation Systems also facilitates government subsidies for its end customers, managed by their distributors, dealers, or the customers themselves. The company employs a total of 82 individuals, comprising skilled and unskilled labour, administrative staff, and a management team, as of March 31, 2023.

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Polysil Irrigation Systems IPO Overview

Polysil Irrigation Systems IPO date is slated to be open for subscription from February 8, 2024, to February 13, 2024. This NSE SME IPO follows a Fixed Price Issue IPO.

Polysil Irrigation Systems IPO price is fixed at Rs. 54 per share. 

The total issue size of this IPO amounts to Rs.17.44  CR. The company has reserved 50% for institutional investors, 15% for non-institutional investors, and 35% for retail investors. 

 

Polysil Irrigation Systems IPO timetable (Tentative)

Events	Date
IPO Opening Date	8 February 2024
IPO Closing Date	13 February 2024
IPO Allotment Date	14 February 2024
Refund initiation	15 February 2024
IPO Listing Date	16 February 2024

 

Polysil Irrigation Systems IPO Details:

IPO Opening & Closing Date	8 February to 13 February 2024
Face value	Rs.10 per share
Issue Price	Rs.54 per share
Lot Size	2000  Shares
Price of 1 lot	Rs.1,08,000
Total Issue Size	3,229,000 shares (aggregating up to Rs.17.44 CR)
Offer for sale	1,785,000 shares of Rs.10 (aggregating up to Rs.9.64 CR)
Fresh issue	1,444,000 shares (aggregating up to Rs.7.80 CR)
Listing at	NSE SME
Issue Type	Fixed Price Issue IPO
Registrar	Bigshare Services Pvt Ltd

 

Polysil Irrigation Systems IPO Lot Details:

Application	Lot	Shares	Amount
Minimum Lot Investment (Retail)	1 lot	2,000	Rs.1,08,000
Maximum Lot Investment (Retail)	1 lot	2,000	Rs.1,08,000
Minimum Lot Investment (HNI)	2 lot	4,000	Rs.2,16,000

 

Polysil Irrigation Systems IPO Reservation

Retail Shares Offered	50%
Other Shares Offered	50%

 

Company Financial

Polysil Irrigation Systems Limited experienced financial growth from FY 21 to FY 23.

(Amount in Lakhs)

Period	Mar 31, FY 23	Mar 31, FY 22	Mar 31, FY 21
Total Assets	5,531.46	4,616.80	4,178.47
Total Revenue	4,392.49	3,767.21	5,471.58
PAT	113.53	33.75	64.81
Net worth	1,372.06	1,372.06	1,338.31
Reserve & Surplus	546.00	1,326.56	1,292.82
Total Borrowings	1,547.25	1,494.96	1,104.83

 

Revenue Distribution Product-Wise

Revenue distribution for Polysil Irrigation Systems Limited in FY 23 showed variations compared to previous years.

(in % age)

Particulars	Mar 31, FY 23	Mar 31, FY 22	Mar 31, FY 21
HDPE/LLDPE/PVC pipe	25.05%	2.01%	12.70%
HDPE sprinkler systems	1.99%	3.66%	20.14%
Drip irrigation system	72.96%	94.33%	67.17%
Total	100%	100%	100%

 

Revenue Distribution State-Wise

Gujarat has the highest contribution to revenue for Polysil Irrigation Systems Limited.

(in % age)

Particulars	Mar 31, FY 23	Mar 31, FY 22	Mar 31, FY 21
Gujarat	1464.93	1046.38	1602.74
Maharashtra	1724.12	2059.18	1867.05
Tamil Nadu	115.69	617.85	2000.56
Madhya Pradesh	307.20	181.85	60.99
Rajasthan	53.96	2.49	22.51
Haryana	481.93	29.52	-
Uttarakhand	250.36	-	-
Others	14.92	-	-
Total	4413.11	3937.09	5553.85

 

Revenue by Operations

Total revenue from operations for Polysil Irrigation Systems Limited decreased from FY 22 to FY 23 and further to Sep 30 FY 23.

(Amount in Lakhs)

Particulars	Sep 30, FY 23	Mar 31, FY 23	Mar 31, FY 22
Revenue from operations	4,387.66	3,762.27	5,458.80
Other Operating Income	4.83	4.94	12.78
Total Revenue from operations	4,392.49	3,767.21	5,471.58

 

The Objective of the Issue

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

• Funding our Working Capital Requirements.

• General Corporate Purpose.

 

Promoters and Management of Polysil Irrigation Systems IPO

1. Bharatkumar Patel.

2. Prafulbhai Radadia .

Pre-issue Promoter Shareholding	33.79%
Post-issue Promoter Shareholding	29.49%

 

Polysil Irrigation Systems IPO Lead Managers

•  Fedex Securities Pvt Ltd

 

Peers of Polysil Irrigation Systems IPO

Polysil Irrigation Systems Limited's P/E ratio is significantly lower compared to its peers.

Name of the Company	Face value (Rs. per Share)	P/ E	EPS (Basic) (Rs.)
Polysil Irrigation Systems Limited	10	46.95	1.15
Captain Polyplast Limited	2	21.50	1.18
RM Drip and Sprinklers Systems Limited	10	1175	0.04
Texmo Pipes and Products Limited	10	190.90	0.39
Jain Irrigation Systems Limited	2	2.76	13.33

 

Evaluation

The IPO is priced within the range of Rs.54 per share.

Evaluation of P/E Ratio:

- Considering the FY23 EPS of Rs 1.15 from the last year, the resulting P/E ratio is 46.95x.

- Taking into account the weighted EPS of Rs 0.80 for the last three years, the P/E ratio amounts to 67.5x.

Comparative Analysis with Listed Peers:

- Highest P/E ratio is 1175.00x.

- Lowest P/E ratio is 4.93x.

- The industry's average P/E is 348.08x.

As a result, the IPO price range, with a P/E ratio ranging from 46.95x to 67.5x, seems highly undervalued in comparison to the industry average of 348.08x.

 

 

 

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

- Strong Marketing and Distribution Network

- Robust and Scalable Business Model

- Diversified Product Portfolio

- Diversified Customer Base with Long-Standing Relationships

 

IPO's Weaknesses

- Volatility in supply and pricing of products

- Technological changes impacting our business activities and investments

- Market risks affecting our revenues and profitability due to competition from existing and new companies

- Default or payment delays from customers

 

IPO GMP Today

The GMP of Polysil Irrigation Systems IPO has not started yet.

 

 

 

Conclusion

In conclusion, Polysil Irrigation Systems Limited's IPO presents an intriguing investment opportunity in the micro irrigation sector. The company's established track record, diverse product portfolio, and strong distribution network contribute to its appeal. While the IPO is attractively priced, potential investors should carefully consider associated risks, including market volatility and technological changes. Polysil Irrigation Systems IPO provides investors with a chance to participate in the agriculture sector's growth. 

 

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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