Shree Tirupati Balajee Agro IPO
Dive into the captivating narrative of Shree Tirupati Balajee Agro Trading Co. Ltd.'s IPO debut, a tale of success in the realm of flexible intermediate bulk containers (FIBCs) and industrial packaging solutions.
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by RA ALOK DAIYA SEBI Reg. INH000011468, BSE Enlistment No. 5737
Company Overview
Shree Tirupati Balajee Agro Trading Co. Ltd. (STBATCL) is a manufacturer and seller of Flexible Intermediate Bulk Containers (FIBCs) and other industrial packaging products such as woven sacks, woven fabric and narrow fabric, tapes. The company serves both domestic and international markets, offering customized bulk packaging solutions to clients across diverse industries including chemicals, agrochemicals, food, mining, waste disposal, agriculture, lubricants and edible oil.
1
Core Competencies
Wide product range, multi-location facilities, recurring orders, global presence, scale of production, technical expertise, environmental contribution, and recycling efforts
2
Manufacturing Facilities
Operates out of five manufacturing units
3
Subsidiaries
Honorable Packaging Private Limited (HPPL), Shree Tirupati Balajee FIBC Limited (STBFL) and Jagannath Plastics Private Limited (JPPL)
4
Customer Base
Served 346-353 B2B customers over the last three fiscal years
IPO Details
1
Offer Structure
Combo IPO of 14,750,000 fresh equity shares and Offer for Sale (OFS) of 5,690,000 equity shares
2
Price Band
Rs. 78 - Rs. 83 per equity share of Rs. 10 each
3
Issue Size
Approximately 20,440,000 shares worth Rs. 169.65 crore
4
Subscription Period
Opens on September 05, 2024 and closes on September 09, 2024
5
Listing
Shares to be listed on BSE and NSE
IPO Timeline
1
IPO Open Date
Thursday, September 5, 2024
2
IPO Close Date
Monday, September 9, 2024
3
Basis of Allotment
Tuesday, September 10, 2024
4
Initiation of Refunds
Wednesday, September 11, 2024
5
Credit of Shares to Demat
Wednesday, September 11, 2024
6
Listing Date
Thursday, September 12, 2024
7
Cut-off time for UPI mandate confirmation
5 PM on September 9, 2024
Use of Proceeds
The company plans to utilize the net proceeds from the fresh equity issue as follows:
Debt Repayment
Rs. 31.45 crore for repayment/prepayment of certain borrowings
Subsidiary Investments
Rs. 20.82 crore for investment in subsidiaries for repayment of loans
Working Capital
Rs. 13.50 crore for working capital and Rs. 10.74 crore for funding working capital of subsidiaries
General Corporate Purposes
Remaining amount for general corporate purposes
Financial Performance
The company has shown steady growth in its financial performance over the last three fiscal years:
Key financial metrics:
- Average EPS of Rs. 4.43 for the last three fiscals
- Average RoNW of 19.16% for the last three fiscals
- P/BV of 3.01 based on NAV of Rs. 27.54 as of March 31, 2024
- P/E of 19.67 based on FY24 annualized earnings
Peer Comparison
The company has listed Commercial Syn Bags, Emmbi Ind., and Rishi Techtex as their listed peers. As of September 02, 2024, these peers are trading at P/E ratios of:
Commercial Syn Bags
P/E: 38.1
Emmbi Ind.
P/E: 22.6
Rishi Techtex
P/E: 34.4
However, it's noted that these companies may not be truly comparable on an apple-to-apple basis.
Investment Recommendations
Steady Growth
The company has shown steady growth in top and bottom lines for the last three fiscals
Pricing
Based on FY24 earnings, the issue appears relatively fully priced
Investment Horizon
Well-informed investors may consider parking funds for the medium to long term
Our recommendation for Shree Tirupati Balajee IPO is to subscribe for medium to long-term.