SPP Polymers IPO: Review, Valuation, Date & GMP

SPP Polymers IPO-Complete Overview

SPP Polymers IPO an SME IPO is a fixed price issue of Rs.24.49 crore by SPP Polymer Ltd. formerly SPP Food Products Private Limited which was founded in 2004 and produces a variety of woven and non-woven HDPE/PP bags and fabrics as well as multifilament yarn. The company is situated in Uttarakhand's Rudrapur City.

The product portfolio consists of the following: 

• Weaved HDPE/PP fabric

• HDPE/PP Woven Bags

• Non-Weave Fabric

• Non-woven Bags

• Yarn with Multifilament PP

The company provides specialized solutions based on the requirements of its customers. It has an installed capacity of 12,000 MT for HDPE/PP Woven Fabric and Bags, 4,000 MT for Non-woven Fabric, and 300 MT for Multifilament Yarn annually.

The company's environmental management system, occupational health and safety system, and quality management system have all been accredited with SA 8000:2014, 45001:2018, ISO 9001:2015, and 14001:2015.

Customers in the agro-pesticide, cement, chemical, fertilizer, food goods, textile, ceramic, and steel industries are the company's main target markets.

This new SME IPO is to be launched on 10 September 2024, and its ‘initial public offering’ will end on 12 September 2024.

SPP Polymers IPO Overview

The Rs.24.49 crore SPP Polymers Ltd. IPO consists of an entirely fresh issue of 41.5 lac Shares.

This SME IPO date is from September 10-September 12, 2024. The expected IPO listing date is Tuesday, September 17, 2024, on NSE and SME. SPP Polymers IPO price band is Rs.59 for each Share.

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

 

 

Company Financial

The company’s revenue grew by 40% and PAT increased by 83% for FYs between 31 March 2024 and 31 March 2023.Below is the synopsis of the company's financial data for the period that concluded on 30 June 2024.

• The total assets of the company are Rs.7,619.39 lac.

• The total revenue of the company is Rs.2,895.85 lac.

• The company’s PAT is Rs.91.33 lac.

• The net worth of the company is Rs.2,591.64 lac.

• The company’s EBITDA is Rs.202.32 lac.

 

(Amount in lac)

 

Revenue Bifurcation

The revenue bifurcation for various activities is shown below:

(Amount in lac)

 

Product-wise Revenue Breakdown During The Last Three Fiscals

(Amount in lac)

 

State-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:

• Meeting working capital needs

• Loan Repayment

• General corporate purposes.

 

Peers of SPP Polymers Ltd.

 

Note: The above comparison of listed peers is as per data as of March 31, 2024.           The P/E Ratio of peers is computed based on the closing market price of the Share as of 27 August 2024.

 

Evaluation

SPP Polymers IPO Price is Rs.59 for each Share.

Evaluation of P/E Ratio

Considering the FY ended 31 Mar 2024 with an EPS of Rs.0.88 from the last year, the resulting P/E ratio is 22.32x.

Considering the weighted EPS of Rs.1.30 over the previous three years, the P/E ratio is 45.33x.

Comparative Analysis With Listed Peers

The average P/E Ratio of the industry is 38.08x.

 

In simple words, the P/E ratio of SPP Polymers IPO (22.32x), compared with the industry’s average P/E of 38.08x, has an undervaluation (on a P/E ratio basis only). Hence the price of the Share seems fairly priced for the investors when considered based on the average P/E ratio of the industry.

Note: The EPS and weighted EPS of the company are as of 31 March 2024.

 

IPO's Strengths 

• Assurance of quality

• A management team and promoter with experience

• The range of products we offer

• A varied clientele and enduring connections with our clients.

 

IPO’s Weaknesses

• Possess low net profit margins about industry norms

• Due to the fragmented nature of the industry categories in which it competes, competition from both big and small competitors could impact the company.

• Ineffective labor management or a lack of sufficient labor supply could have an impact on the company's business operations.

• The market for the current goods may be negatively impacted by the introduction of alternative packaging materials brought about by changes in technology or consumer tastes, which might harm the financial performance and commercial prospects.

• Operations are restricted to the northern states of India. As of right now, the company is serving clients throughout the northern region of India.

• The company had a negative cash flow from its investing, and financing activities in the past FYs, and sustained negative cash flow could impact its growth and business.

SPP Polymers IPO GMP Today

SPP Polymers IPO GMP today is Rs.25 as of 07 September 2024.

 

IPO Timetable (Tentative)

The SPP Polymers IPO date is from September 10 to September 12, 2024, with allotment on September 13, refund initiation on September 16, and listing on September 17, 2024.

 

SPP Polymers IPO Details 

The IPO with a Face Value of Rs.10 per Share is set to start on September 10, 2024, close on September 12, 2024, and offer a total issue size of 41,50,000 Shares (aggregating up to Rs.24.49 Cr.).

SPP Polymers IPO Lot Details 

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (2000 Shares) amounting to Rs.1,18,000 and in multiples thereof, while for HNI investors, the minimum Lot is 2 (4000 Shares) amounting to Rs.2,36,000.

 

SPP Polymers IPO Reservation

Promoters And Management of SPP Polymers Ltd.

• Dipak Goyal

• Mahavir Bahety

• Liladhar Mundhara

• Asha Ram Bahety.

IPO Lead Managers

• Interactive Financial Services Ltd.

 

Dividend Policy

The company has not paid dividends since its inception.

 

Conclusion

The company has experienced negative cash flow in financing and investing activities in the last fiscal years. To achieve its goals, the company is currently launching an IPO for the general public. We believe the information offered in this blog helps you learn about the company's financial performance. So this blog will be very useful to you if you are looking for information about the approaching IPO since it will give you reliable data about the company's insights, financials, and past performance. If this informative blog piques your interest, you may be interested in reading our other related and useful posts on our website.

 

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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