Sah Polymers IPO subscribed 2.37 times on Day 2

NEW DELHI: The Rs 66.3 crore initial public offering (IPO) of Udaipur-based PP woven fabrics manufacturer Sah Polymers got fully subscribed on the second day of the bidding process on Monday. The issue was booked 86% on day one.

The company is selling its shares in the range of Rs 61-65 apiece between December 30 to January 4, with a lot size of 230 equity shares. The issue is an entirely fresh issue of 56,10,000 shares.

According to the data from BSE, investors made bids for 1,33,06,420 equity shares or 2.37 times as against 56,10,000 equity shares offered for subscription on Monday-end.

The quota for retailers was subscribed 7.46 times whereas the portion for non-institutional investors fetched 2.94 times bids, and the allocation for qualified institutional bidders was booked 39%.

Incorporated in the year 1992, Sah Polymers is a leading PP woven bags manufacturer and exporter of PP woven bags and HDPE box bags, flexible intermediate bulk containers (FIBCs), and BOPP laminated bags.

Sah Polymers has its presence in 5 states and 1 union territory for their domestic market, based on sales made in 1QFY23 and FY22. Globally they export their products to 14 countries including the US, Algeria, Ghana, UK and Australia.

In FY22, the company reported a net profit of Rs 4.38 crore on a revenue of Rs 80.51 crore. During FY20-22, its revenue and PAT clocked a CAGR of 28% and 284% respectively, while the EBITDA margin increased from 3.7% in FY20 to 8.7% in FY22.

Should you subscribe to Sah Polymers IPO?
Reliance Securities said while the company has a quality product mix, strong customer base across geographies and industries, good financials and a wide product portfolio, the issue seems pricey based on the current financials.

Considering the FY22 adjusted EPS of Rs 1.70 on a post-issue basis, the company is going to list at a PE of 38.32x. While its peers namely Rishi Techtex, Jumbo Bag, SMVD Poly Pack, EMMBI Industries and Commercial Syn Bags are trading at a PE of 14.91x, 6.24x, 14.86x, 10.15x and 25.89x, respectively.

Domestic brokerage firm Marwadi Financial Services has given a subscribe rating to the IPO as the company has a diversified product portfolio with a customer base across geographies and industries. "Also, it is available at reasonable valuations considering the future growth potential of the company," it said.

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