Shah Polymers IPO opens today, should you subscribe? GMP, key details to know

 

• Shah Polymers IPO is a fresh issue of 1,02,00,000 equity shares with no offer for sale (OFS) component

Polymer maker Shah Polymers' initial public offering (IPO) will open for subscription on Friday, December 30, 2022 and close on January 4, 2023. The company has fixed a price band of ₹61 to ₹65 per share for its issue.

According to market observers, shares of Shah Polymers are commanding a premium of ₹6 today in the gray market. The shares of the company are expected to get listed on the major stock exchanges BSE and NSE on Thursday, January 12, 2023.

Shah Polymers IPO is a fresh issue of 1,02,00,000 equity shares with no Offer for Sale (OFS) component. Sat Industries, which is the promoter, holds 91.79% stake in the company.

75% of the issue is reserved for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs) and the remaining 10% for retail investors.

The Udaipur based company is primarily engaged in manufacturing and sales of Polypropylene (PP)/High Density Polyethene (HDPE) FIBC bags, woven sacks, HDPE/PP woven fabric and woven polymer based products.

The company has presence in 6 states and 1 union territory for the domestic market and internationally in 6 regions namely Africa, Middle East, Europe, USA, Australia and Caribbean.

The company proposes to utilize the net proceeds for financing the following items for setting up a new manufacturing facility to manufacture new types of Flexible Intermediate Bulk Containers (FIBC), repayment/prepayment of certain secured and unsecured borrowings received in whole or in part. Company and subsidiary, financing the working capital requirements of the company and for general corporate purposes.

“Taking into account the FY22 adjusted EPS of ₹1.70 on a post-issue basis, the company is going to list at a P/E of 38.32x with a market cap of ₹1,677 million. We assign "Subscribe" rating to this IPO as the company has a diversified product portfolio with a customer base across geographies and industries. Also, it is available at reasonable valuation considering the future growth potential of the company," said Marwari Shares and Financial Services.