Sah Polymers shares list at 31% premium over IPO price

Shares of Sah Polymers got listed at a solid premium of 30.77% over its issue price on the bourses on Thursday. Shares of the company debuted at Rs 85 on both BSE and NSE compared to the issue price of Rs 65.

Despite a stellar response to the initial public offering (IPO), the stock couldn’t command a significant premium in the unofficial or grey market, due to the prevailing weak market sentiment.

A day ahead of the listing, the stock was trading at a premium of Rs 10 to its issue price in the grey market.

The company’s public offer received an overwhelming response from all categories of investors even as it commanded premium valuations when compared to the listed peers.

The Rs 66.3 crore initial public offering of the polymer products maker was subscribed 17.46 times. The IPO was an entirely a fresh issue of 56,10,000 shares.

The retail portion was subscribed 39.78 times, the portion for non-institutional investors was subscribed 32.69 times, and that of qualified institutional bidders was subscribed 2.4 times.

The company is valued at 38.3 times its FY22 adjusted earnings. Whereas, listed peers like Rishi Techtex, Jumbo Bag, SMVD Poly Pack, EMMBI and Commercial Syn Bags are trading at 6-25 times their FY22 earnings.

Incorporated in 1992, Sah Polymers is a leading manufacturer and exporter of polypropylene woven bags and high-density polyethylene box bags. It also makes flexible intermediate bulk containers (FIBCs), and biaxially oriented polypropylene (BOPP) laminated bags.

Polypropylene woven bags are used in agriculture product packaging, food packaging, geotechnical packaging, tourism and transport, daily necessities, and flood control products. BOPP bags are predominantly used by the apparel and clothing industries.

The company exports its products to 14 countries, including the US, UK, Australia, UAE, Africa, France and Poland. A majority of the sales of the company come from exports.

In FY22, exports constituted 55.14% of the total sales of the company.

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