Sah Polymers IPO: GMP, peer comparison, price band, lot size & more

Sah Polymers IPO is all set to hit the market today. The Rs 66 crore IPO will be a fresh issue of 10,200,000 shares to be sold in the Rs 61–Rs 65 price band.  Investors can bid for a minimum of  one lot comprising 230 shares and in multiples of 230 shares thereafter.

Rishi Techtex, Kanpur Plastipack, Gopala Polyplast, Jumbo Bag, SMVD Polypack, and Commercial Syn Bags are some its listed and unlisted competitors. But they are not directly comparable due to type, range of products and services, turnover and size of the firm.

Considering the FY22 adjusted EPS of Rs 1.70 on a post-issue basis, Sah Polymers asking for a PE of 38.32 times with a market cap of Rs 167.70 crore. Peers namely Rishi Techtex (14.91 times), Jumbo Bag (6.25 times), SMVD Poly Pack (14.86 times), EMMBI (10.15 times) and Commercial Syn Bags (25.89 times) are trading at a lower valuations.

Ahead of its IPO, the company allocated 45.90 lakh equity shares to three anchor investors -- Mavin India Fund, Saint Capital Fund and Leading Light Fund VCC-- at Rs 65 per share. The issue will conclude on January 4.

Sah Polymers offers tailored bulk packaging solutions to business-to-business (B2B) producers in industries, such as agro pesticides, basic drugs, cement, chemicals, fertilisers, food products, textiles, ceramics, and steel. The company exports its products to 14 countries including USA, UK, Australia, UAE, Africa, France and Poland. A majority of the sales of the company comes from exports.

For the quarter ended June 30, exports accounted for 57.61 per cent of total revenues. In FY22, exports percentage stood at 55.14 per cent. Return on net-worth stood at 16.42 per cent and PAT margin for the year ended stood at 5.39 per cent. The company’s sales grew from Rs 49.90 crore in FY20 to Rs 81.23 crore in FY22. The sales for the quarter ended June 30 stood at Rs.27.59 crore. Sales CAGR for last three completed years stood at 27.6 per cent while PAT grew at CAGR of 284 per cent over the same period.

"We assign a “Subscribe” rating to this IPO as the company has a diversified product portfolio with a customer base across geographies and industries. Also, the IPO is available at reasonable valuations considering the future growth potential of the company," said Marwadi Financial Services.

The company intends to manufacture new variant of FIBC products with filling capacities of upto 2,500 KGs out of the new unit. The installed capacity of the new unit would be 3,960 mt per annum, which is equivalent to current capacity.

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