Baheti Recycling Industries Limited IPO

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i) Incorporated in 1994, it is an aluminium recycling Company, primarily engaged in processing aluminium based metal scrap to manufacture (a) aluminium alloys in the form of ingots and (b) aluminium de-ox alloys in the form of cubes, ingots, shots and notch bar.

ii) Aluminium alloys are used in automobile components due to its stiffness, corrosion resistance and excellent strength to weight ratio. The Aluminium de-ox alloys are used as deoxidizer in steel manufacturing units.

iii) Currently, Company markets their products to around 11 states & Union Territories in India of which majority of the revenue comes from the state of Gujarat, Maharashtra, Orissa and Jharkhand. It also sells Its products to the foreign buyers located in Japan, Canada, USA, China, Hong Kong, UAE, Taiwan etc.

iv) It is a customer centric company, constantly striving to create value for its customers through products offered and committed deliveries. The Company primarily caters to the automotive parts and steel sector in India.

v) Some of the esteemed customers of the company include ArcelorMittal Nippon Steel India, Tata Steel, Minda Corporation, Sigma Electric, Sunflag Iron & Steel Co. Ltd. etc.

vi) Revenue from exports for F.Y. 2021-22 and F.Y. 2020-21 has been Rs. 2192.32 lacs and Rs. 1619.71 lakhs respectively which constituted 8.83% and 12.71% of the revenue from operations for the respective fiscal. 

Competitive Strength:

  •      In-house manufacturing facility supported by technology driven process.
  •      Stringent Quality control mechanism ensures standardized product quality.
  •      Strong and diversified supplier base for sourcing raw materials.
  •      Experienced Promoters supported by a dedicated management team.

Objects of the Baheti Recycling Industries Limited IPO:

Company intend to utilise the proceeds of the Issue to meet the following objects: - i) Modernization and expansion of existing manufacturing units. ii) To meet Working Capital Requirements. iii) General Corporate Purposes. iv) To meet issue expenses.  

Baheti Recycling Industries Limited IPO Details:

Open Date: Nov 28 2022
Close Date: Nov 30 2022
Total Shares: 2,760,000
Face Value: ₹ 10 Per Equity Share
Issue Size: 12.42 Cr.
Lot Size: 3000 Shares
Issue Price: ₹ 45 Per Equity Share
Listing At: NSE Emerge
Listing Date: Dec 08 2022

Promoters And Management:

i) Mr. Shankerlal Bansilal Shah is the Chairman and Whole Time Director of our Company. He has been on the Board since incorporation. He is a visionary entrepreneur and has played a pivotal role in expanding business operations of our Company. He has a work experience of more than 35 years in this metal industry and has completed his higher secondary from S.B. Kapadia School, Ahmedabad. He currently looks after the overall management and administration of the Company Under his guidance, our Company has witnessed continuous growth. ii) Mr. Balkishan Shankerlal Shah is the Managing Director of our Company. He completed his Bachelor of Commerce from Gujarat University in 2008 and post Graduate Program in Management(Family Managed Business) from S.P. Jain Institute of Management and Research, Mumbai in 2010. He has an experience of around 10 years in the metal industry. He currently oversees and controls the production and purchase operations of our Company.  iii) Mr. Yash Shankerbhai Shah is the Joint Managing Director of our Company. He completed his Bachelor of Commerce from Ahmedabad University in 2014 and post Graduate Program in Global Family Managed Business from SP Jain School of Global Management in 2016. He has an experience of around 6 years in the metal industry. He currently oversees and controls the marketing and finance operations of our Company. 

Financials of Baheti Recycling Industries Limited IPO:

Particulars (in Lakhs) 2022 2021 2022
Revenue from Operations 24,840 12,748 10,576
Cost of Materials Consumed 22,099 11,232 9,035
Change in Inventories 49 -264 51
Employees benefit expense 852 615 580
Other Expense 1,096 745 554
EBITDA 743 420 355
OPM 2.99% 3.30% 3.36%
Other Income 86 32 20
Depreciation 75 65 59
Finance Cost 349 312 288
PBT 406 75 28
Tax 114 28 9
PAT 292 48 19
No. of Shares 103 103 103
EPS 2.83 0.46 0.19

Comparison With Peers:

Name of the Company Revenue (Cr) Profit (Cr) EPS P/E CPM MCap (Cr)
Arfin India Limited 526 9 0.58 34.4 24 381
Nupur Recyclers Limited 159 19 8.25 50.3 314 718
Baheti Recycling Industries 248 292 2.83 15.90 45 46.65

Recommendation on Baheti Recycling Industries Limited IPO:

Review and Recommendation of Baheti Recycling SME IPO by IZ team is 5/10

1. Baheti Recycling is  an aluminium recycling Company, primarily engaged in processing aluminium based metal scrap to manufacture (i) aluminium alloys in the form of ingots and (ii) aluminium de-ox alloys in the form of cubes, ingots, shots and notch bar. 2. They supply these recycle products to domestic clients in Automative and Steel Sector like ArcelorMittal Nippon Steel India, Tata Steel, Minda Corporation, Sigma Electric, Sunflag Iron & Steel Co. Ltd and export to countries like Japan, Canada, USA, China, Hong Kong, UAE, Taiwan. 3. They also engaged in trading of scrap materials such as aluminium scrap, brass scrap, copper scrap, zinc scrap etc. 4. They carry out manufacturing operations through the production facility located at Dehgam (Gandhinagar, Gujarat) which has an installed capacity of 12,000 MT for processing aluminium scrap. 5. Revenue from operation increased from 105 Crores in Fy20 to 250 Crores in Fy22. 6. PAT has increased from 19 lacs in Fy20 to 291 Lacs in Fy22. 7. It is a very low margin business. EBITDA Margins in Fy22 is just 3%. 8. Short term debt is ~45 Crores. It is mainly taken to fund 38 Crores of Trade receivables and 30 Crores of Inventory. The working capital requirement is high in the company. 9. EPS of Fy22 is 2.83 and Price of IPO is 45. So, P/E is 16x.

Lead Manager of Baheti Recycling Industries Limited IPO:

  1. Hem Securities Limited

Registrar of Baheti Recycling Industries Limited IPO:

  1. Purva Sharegistry India Private Limited

Company Address:

Baheti Recycling Industries Limited A-2/3, L.R. Apartments, Opp. Police Commissioner Office, Shahibaug Ahmedabad – 380 004, Gujarat, Phone: : +91-79-25627681/82 Email: info@bahetiindustries.com Websitehttps://www.bahetiindustries.com/

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