Shelter Pharma Ltd IPO - Review, Valuation & GMP Todays

Shelter Pharma Limited - Complete Overview

Originally named Shelter Pharmacy, the company converted in 2007 and became Shelter Pharma Limited. The company's core focus lies in the production of herbal products and holds a strong presence in both the Human Pharma and Veterinary sectors.

With an extensive portfolio, it enjoys favourable product acceptance and a notable market share within Gujarat.

Headquartered in Himmatnagar, Gujarat, Shelter boasts a commendable track record of product effectiveness. Its product pricing remains competitive, catering to its intended market.

Shelter Pharma sources essential raw materials directly from nearby villages, working in collaboration with local farmers.

The company's customers come from the rural and semi-urban markets.

 

What does the company do?

Shelter Pharma Limited manufactures herbal products with a well-built presence in Human Pharma as well as Veterinary space.

 

Company Products

The company's product lineup includes Human Healthcare products like Lemonade Barley Water, Sherolax, Baldeepak, and Stonyl Tablets and Veterinary Healthcare products such as Agrical Powder, Lactocal gel, and Shelodex Ultra Ointment.

 

 

IPO Overview

The Shelter Pharma IPO is set to be open for bidding from August 10th to August 14th, 2023. The IPO is priced at Rs.42 per share with a face value of Rs.10 per share.

The company aims to generate Rs.16.03 Crores from the offering, against a total of 3,816,000 shares.

The company offers 3000 shares in each lot, and the upcoming IPO is anticipated to be listed on the BSE SME on August 23rd, 2023.

 

Shelter Pharma Limited IPO timetable

EVENTS	DATE
IPO Opening Date	10 August 2023
IPO Closing Date	14 August 2023
IPO Allotment Date	18 August 2023
Refund initiation	21 August 2023
IPO Listing Date	23 August 2023

 

Shelter Pharma Limited IPO Details

IPO Opening & Closing Date	10 August to 14 August 2023
Face Value	Rs. 10 per share
Issue Price	Rs. 42 per share
Lot Size	3000 Shares
Price of 1 Lot	Rs. 126,000
Issue Size	3,816,000 Shares (aggregating up to Rs.16.03 Cr)
Offer for Sale	NA
Fresh Issue	3,816,000 Shares (aggregating up to Rs.16.03 Cr)
Listing at	BSE SME
Issue Type	Fixed Price Issue IPO
Registrar	Bigshare Services Pvt. Ltd.

 

Shelter Pharma Limited IPO Lot Details

Minimum Lot Investment (Retail)	1 Lot
Maximum Lot Investment (Retail)	1 Lot
Minimum Lot Investment (HNI)	2 Lot

 

Shelter Pharma Limited IPO Reservation

Other Investors Portion	50%
Retail Investors Portion	50%

 

Company Financial

Amount in Crores

Period	FY 21	FY 22	FY 23
Total Assets	1020.24	1283.93	2144.90
Total Revenue	2248.86	3005.84	3615.51
PAT	-23.88	183.70	578.33
Net Worth	711.17	880.42	1451.06
Reserve & Surplus	667.40	844.45	676.68
Total Borrowings	0.46	13.12	178.41

 

Objective of the Issue

The company intends to utilize the raised funds for the following objectives:

• Fulfil working capital requirements.
• General corporate purposes.

 

Promoters and Management of Shelter Pharma Limited

The Company's promoters comprise Mr Mustaqim Nisarahmed Sabugar and Mr Shakil Nisarahmed Sabugar.

Pre-issue Promoters Holding	84.92%
Post-issue Promoters Holding	56.89%

 

Peer Comparison

The following are the listed peers of the company as per its DRHP.

Company Name	CMP	EPS (Rs.)	P/E Ratio	Revenue from Operations (Rs. in Lakh)
Shelter Pharma Limited	42.00	7.47	5.62	3,615.27
Dabur India Limited	568.80	7.75	70.31	8,68,400.00
Emami Limited	450.50	13.00	27.58	2,90,600.00

 

IPO's Valuations

The IPO valuation appears reasonable when considering the information provided by the company. The company's EPS stand at Rs.7.47 per share, and the P/E ratio is 5.62. When these figures are used to calculate the share price, it amounts to Rs.42.

 

Dividend Policy

The company has not paid any dividends in the past. However, the possibility of declaring dividends in the future will depend on its future financial performance and other relevant factors.

 

IPO's Strengths

• Experienced Promoters and Management Team
• Scalable Business Model
• A wide and diverse range of product offerings
• Marketing & Branding Efforts

 

IPO Weaknesses

• The Company is currently involved in ongoing legal proceedings that include its Group Entity, Promoters, and Directors.
• The Company faced classification as a 'Defaulter' by CIBIL and as a 'Wilful Defaulter' by Watchout Investors due to a default made in the year 2016.
• Operating within a closely regulated industry environment, the Company must secure and renew various registrations, licenses, and permits from the government and regulatory bodies.
• The Company follows a cash-based sales model as per its business strategy.
• The success of the business is significantly reliant on the performance of its distributors. Any underperformance by these distributors could negatively impact business operations, profitability, and cash flow.
• There exists a discrepancy in the dates mentioned on the Company's PAN card.
• The potential presence of counterfeit drugs, falsely presented as the Company's products by others, holds the potential to harm the Company's reputation and financial performance.
• Certain discrepancies or errors have been identified in a portion of the corporate records pertaining to forms filed with the Registrar of Companies and other regulatory provisions.
• The Company had not allocated provisions for gratuity in previous periods.
• The Company is susceptible to fluctuations in foreign exchange rates.
• During the year 2021, the Company experienced negative cash flow in its Operating Activities, and similarly, in the year 2022, in its Investing Activities.

 

 

IPO GMP Today

As on 14th Aug,2023 the GMP of Shelter Pharma IPO is Rs.6.

 

Conclusion

The company recorded a loss in the previous fiscal year and operates within a competitive market environment. The profit shown for the fiscal year 2023 could be considered as an attempt to enhance its financial appearance in preparation for the IPO. However, there might be challenges in maintaining this level of profit in the future. It is recommended to proceed with caution and undertake a comprehensive analysis before considering any investment risk.

 

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

 

 

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