Rajasthan-based Sah Polymers Limited has filed its draft red herring prospectus (DRHP) with the markets regulator, SEBI, to raise funds through an initial public offering (IPO) with a fresh issue of 102,00,000 equity shares, with no offer for sale component.
The company is primarily engaged in manufacturing and selling of Polypropylene (PP)/ High Density Polyethylene (HDPE) Flexible Intermediate Bulk Containers (FIBC) Bags, Woven Sacks, HDPE/PP woven fabrics, woven polymer based products
The issue has a face value of Rs 10 per equity share for the proposed share sale. The Offer is being made through the Book Building Process, wherein not less than 75 percent of the Offer shall be available for allocation to Qualified Institutional Buyers, not more than 15 percent of the Offer shall be available for allocation to Non-Institutional Bidders and not more than 10 percent of the Offer shall be available for allocation to Retail Individual Bidders.
The proceeds from its fresh issuance shall be utilised for manufacturing of new FIBC plant and expansion of production capacity and funding working capital requirements for new project, besides repayment/prepayment of certain borrowings.
Sah Polymers is led by Asad Daud, and Hakim Sadiq Ali Tidiwala, with a combined expertise of approximately 20 years in the FIBC packaging sector. The Company provides tailored bulk packaging solutions to business-to-business ("B2B") producers in a variety of industries, including agro pesticides, basic drugs, cement, chemicals, fertilisers, food products, textiles, ceramics, and steel. It is also a Del Credere Associate cum Consignment Stockist (DCA/ CS) of Indian Oil Corporation Limited, as well as a Dealer Operated Polymer Warehouse (DOPW) of Indian Oil Corporation’s polymer division.
The Udaipur-based company has two business division namely Domestic sales and exports. Based on sales, it has presence in six states and one union territory for its local market. Internationally, it supplies its products in six regions: Africa, the Middle East, Europe, The United States, Australia, and Caribbean. For the nine months ended December 31, 2021 and fiscal 2021, exports contributed 37.40 percent and 46.80 percent, respectively.
Sah Polymers currently has one manufacturing site in Udaipur, Rajasthan, with an installed production capacity of 3960 mt p.a. The Company has made investments in its manufacturing infrastructure from time to time in order to strengthen its product portfolio and reach, and as part of its strategic expansion plans, it intends to establish a new facility with an additional installed capacity of 3960 m.t p.a. to manufacture different variants of FIBC products. The Company has recently acquired majority stake in Fibcorp Polyweave Private Limited.
Kanpur Plastipack Ltd., Rishi Techtex Ltd., Gopala Polyplast Ltd., Jumbo Bag Ltd., SMVD Polypack Ltd., EMMBI Industries Ltd., and Commercial Syn. Bags Ltd. are competitors; however, the peers are not directly comparable due to the type, range of products/services, turnover, and size of the firm.
Revenue from operations climbed 12.16 percent from Rs 49.10 crore in Fiscal 2020 to Rs 55.07 crore in Fiscal 2021, attributable to an increase in sales of manufactured goods which included HDPEC and LDPE bags. Revenue for the nine months ended December 2021 stood at Rs 54.01 crore. The Consolidated Revenue of the Company for the nine months period ended December 2021 stood at Rs. 64.78 Crores. The Company clocked post-tax profits margin of over 6% as pert the nine months period financials.
The India Packaging Market was worth $50.5 billion (Rs 3.85 trillion) in 2019, and is predicted to grow to $204.81 billion (Rs 15.63 trillion) by 2025, with a CAGR of 26.7 percent between 2020 and 2025. Packaging is one of India's fastest-growing businesses, growing at a rate of 22-25 percent each year and establishing itself as a favoured centre for the packaging industry.
Pantomath Capital Advisors Private Limited is the sole book running lead manager to the issue and Link Intime India Private Limited is the registrar to the offer. The equity shares are proposed to be listed on the Main Board of BSE and NSE.