scorecardSah Polymers IPO to open on Dec 30, price band set at ₹61-65 a share
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Sah Polymers IPO to open on Dec 30, price band set at ₹61-65 a share

Sah Polymers IPO to open on Dec 30, price band set at ₹61-65 a share
Stock Market5 min read
  • Polymer manufacturer and packaging solutions provider Sah Polymers will open its initial public offering (IPO) on December 30 and close on January 4, 2023.
  • The Udaipur-based company plans to raise ₹66.3 crore through a fresh issue of 10.2 million shares, with no offer for sale (OFS) component.
  • Sah Polymers’s net profit has grown over three times over the last financial year to ₹4.37 crore in FY22.
Sah Polymers, a polymer manufacturer and packaging solutions provider based in Udaipur, will open its initial public offering (IPO) this week on December 30 and close on January 4, 2023. The price band of the IPO is set at ₹61-65 per share.

The company’s ₹66.3-crore IPO is a complete fresh issue of 10.2 million shares, with no offer for sale (OFS) component.

The shares of the company are currently commanding a grey market premium (GMP) of ₹5 per share. GMP is the premium at which IPO shares are traded in an unofficial market before they are listed on the stock exchanges.

The company is primarily engaged in manufacturing and selling of polypropylene (PP) and high density polyethylene (HDPE) bulk bags (or FIBC bags), woven sacks, and HDPE/PP woven fabrics.

Sah Polymers offers customised bulk packaging solutions to business-to-business manufacturers catering to different industries such as agro pesticides, basic drugs, cement, chemicals, fertilisers, food products, textiles, ceramics and steel.

It exports products to 14 countries such as Algeria, Togo, Ghana, Poland, Portugal, France, Italy, Dominican Republic, USA, Australia, UAE, Palestine, the UK and Ireland.

Here’s what Sah Polymers intends to do with proceeds of the IPO

Sah Polymers intends to use part of its net proceeds from the IPO to establish a new facility with an additional installed capacity of 3.96 billion tonnes per annum to manufacture different variants of FIBC products. Once set up, it will double the company’s total production capacity to 7.92 billion tonnes per annum.

Sah Polymers currently has one manufacturing facility located at Udaipur, Rajasthan, with an installed production capacity of 3.96 million tonnes per annum.

The company also intends to use a part of the proceeds to repay debt, fund working capital requirements and for other general corporate purposes.

In terms of risks, one of the promoters of the company, Aeroflex Industries, is in the list of wilful defaulters, according to credit bureau CIBIL.

Sah Polymers’ key financial metrics

Sah Polymers’ net profit has more than tripled to ₹4.37 crore in FY22, compared to the previous financial year.
Particulars Revenue from operations Net profit EBITDA margin
FY22₹80.51 crore ₹4.37 crore 9.61%
FY21₹55.06 crore ₹1.27 crore 5.99%
FY20₹49.10 crore ₹0.29 crore5.32%
Source: Red herring prospectus

Here’s how the listed peers of Sah Polymers have performed in FY22:

Peer companies Revenue from operations Net profit % change in stock price in 2022
Rishi Techtex ₹101 crore ₹1.31 crore -3.44%
Jumbo Bag₹131 crore ₹1.06 crore 45.48%
SMVD Poly Pack ₹86 crore ₹1.04 crore 41%
EMMBI Industries₹436 crore ₹19.03 crore -15%
Commercial Syn Bags₹322 crore ₹18.18 crore -5.49%
Sah Polymers₹81 crore ₹4.37 crore NA
Source: Red herring prospectus / Change in stock price year-to-date as on 1:00 P.M, December 26, 2022

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