Surprised first hr subscription of qib+hni quota. This may be a trick to lure the innocent retailers. Please be careful and just wait whether we get any substantial increment in subscription figure at the end of the day.
Deep Polymers Limited IPO
(i) Deep Polymers Limited.
The Company is engaged in manufacturing of Colour and Additive Masterbatches for engineering plastics and compounds that includes a wide range of quality products like Antifab fillers, Transparent fillers, Colour fillers, which is used as cost-effective replacements for polymers and acts as anti-fibrillating, anti-blocks, anti-slip agents.
(ii) The journey of Deep Polymers Private Limited !!
a) 1992-The Company has started manufacturing world-class Masterbatches 600 MT productions per year.
b) 2003-04- The production gets 10x and company started manufacturing 6000 MT productions per year.
c) 2008-09- The production gets 100x and company started manufacturing 60000 MT productions per year.
d) 2017-18- The company has achieved production of 12000 MT Colour Masterbatches and 25000 MT filler Masterbatches
(iii) What are Masterbatches and their uses?
a) Masterbatches are an integral part of everyone’s life in today world where the use of plastic has become a necessity. The plastic which is used for packaging trays, boxes, cups and vending packaging, baby products, and protection packaging etc. gets its color from masterbatches.
b) The Deep Polymers manufactures different types of Masterbatches such as White, Black, Colour, UV, and Additives.
c) Uses- The Masterbatches can be used to color any thermoplastic material by any process and they are used in packaging, Building and Construction, Consumer goods, Transportation, Electrical and Electronics, and Textiles industries
1. Masterbatches 2. Antifab Fillers
Objects of the Deep Polymers Limited IPO:
Deep Polymers Limited IPOare: 1. OFS of 24,50,000 Equity Shares by selling shareholders at a price of 40.00 per share. 2. Fresh Issue by the Company of 13,60,000 Equity Shares at a price of 40.00 per share. a. To Meet working capital requirement. b. To Meet the Issue Expenses. c. To Meet General corporate purpose.
Deep Polymers Limited IPO Details:
|Open Date:||Aug 08 2018|
|Close Date:||Aug 13 2018|
|Face Value:||₹ 10 Per Equity Share|
|Issue Type:||Fixed Price IPO|
|Issue Size:||15.24 Cr.|
|Lot Size:||3000 Shares|
|Issue Price:||₹ 40 Per Equity Share|
|Listing At:||BSE SME|
|Listing Date:||Aug 23 2018|
Promoters And Management:
|(i) Authorized Share Capital (1,20,50,000 Equity shares at FV@10)||12.050 Cr|
|(ii) Issued, Subscribed,& Paid-up Share Capital Before Issue (1,05,11,600 Equity Shares at FV@10)||10.051 Cr|
|(iii) Present Issue ( 38,10,000 Equity Shares at FV@10)||3.81 Cr|
|(iv) Reservation for Market Maker(1,92,000 Shares at FV@10)||19.2 Lacs|
|(v) Reservation for QIB & HNI (18,09,000 Equity Shares at FV@10)||50%|
|(vii) Reservation for Retail (18,09,000 Equity Shares at FV@10)||50%|
|(viii) Paid Up Share Capital after the issue||11.87 Cr|
Financials of Deep Polymers Limited IPO:
|1. Assets and Liabilities Key Parameters|
|Year||Asset(lacs)||Liabilities(lacs)||Net Worth(lacs)||Book Value||D/E||RONW||Receiveable days|
|2. Profit n Loss Key Parameters|
|Year||Revenue(lacs)||PAT(lacs)||EBITDA Margins||Profit Margins||Outstanding Shares(lacs||EPS|
|3. Cash Flow Statement(all figures in lacs)|
|(i) Net Cash Generated from Operation||55.41||-306.78||-103.33||245.6||106.36|
|(ii) Net Cash Generated from Investment||-6.35||-21.7||-45.45||-36.82||3.48|
|(iii) Net Cash Generated from Financing Activity||-22.69||310.2||174.54||-208.36||-110.4|
|(iv) Total[ (i)+(ii)+(iii) ]||26.37||-18.28||25.76||0.42||-0.56|
|(v) Cash and Cash Equivalents at the Beginning of the Year||8.5||26.78||1.02||0.6||1.16|
|(vi) Cash and Cash Equivalents at the end of the Year||34.87||8.50||26.78||1.02||0.60|
Comparison With Peers:
Recommendation on Deep Polymers Limited IPO:
Deep Polymers Limited IPORating by InvestorZone team: 3/10 1-5: Fair 5-7: Good 7-10: Excellent
Lead Manager of Deep Polymers Limited IPO:
Registrar of Deep Polymers Limited IPO:
Bid Details of Deep Polymers Limited IPO as on
13 Aug 2018 | 11:59:03 PM
|Category||No.of shares offered||No. of shares bid|
Discussion on Deep Polymers Limited IPO:
Lead manager track record is also not good. Avoid.
The Issue is fully priced. So clear avoid.
The Company is continually defaulting in payment of TDS.
(i) DRHP Page#156
1. Prior Years= Rs.1,53,196
2. 2014-15= Rs.1983
3. 2015-16= Rs.109
5. 2017-2018= Rs.4,38,494
(ii) DRHP Page #160
There Partnership Firm Deep Plast Industries is also making TDS default which is as on date totaling Rs.8,25,070.8.
(iii) Key Fact: The non-filing of TDS in time is a serious corporate governance issue and IT department has taken late payment of TDS very seriously and in addition to imposing Interest and Penalty for Late Payment, they also start initiating Criminal Prosecution against those responsible for Deduction and Payment of TDS. Recently, the MD of a Hyderabad based company been jailed for TDS payment defaults
I think, if company has dues to pay off or any issues with operations, SEBI should not approve such companies to raise money through IPO
Unfortunately, exchanges approve SME IPOs and not SEBI .
And especially we see such companies with poor track record comes in BSE platform as they have less stringent requirements are compared to NSE platform.
Promoters are selling 24,50,000 Equity Shares in the following manner.
1. Rameshbhai Bhimjibhai Patel = 8,50,000
2. Ashaben Patel = 5,50,000
3. Rameshbhai Bhimjibhai Patel HUF= 4,00,000
4. Deep Additives Private Limited=2,00,000
5.Jignesha Patel= 4,00,000
6. Himani Patel = 50,000
OFS in SME is like a Crime to me. OFS shows that management has very less confidence in the company that it will outperform in future else nobody has sold their shares so cheaply to the public.
Performance of LM can be checked here https://investorzone.in/lead-manager/gretex-corporate-services-private-limited/
The global masterbatch market is expected to reach an estimated $10.9 billion by 2022 and it is forecast to grow at a CAGR of 4.2% from 2017 to 2022. The major driver for the growth of this market is increasing demand for plastic as substitutes for various materials like metal, concrete, and steel in various end-use industries.
Deep Polymers is engaged in the manufacturing of different colored masterbatches. These masterbatches are used to color plastics. Let us see why industry prefers masterbatches over any other method for coloring plastics.
1. It is extremely cost-effective. They color the polymers and also helps the plastic manufacturing companies to save a good amount.
2. Easy to use, masterbatches ensure a dirt-free and healthy production eliminating the health risk that is involved in using powder pigments.
3. The amount of waste produced is minimized when using masterbatches for production.
4. Unlike using powder pigments, masterbatches have no trial and error method and can easily achieve the desired color with complete safety.
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