Kshitij Polyline Limited IPO

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A) Company’s Background and Business Detail

(i) Kshitij Polyline Limited was incorporated on March 26, 2008, in Mumbai. The company was incorporated by – Mr. Bharat Gala & his family members with an aim of running Manufacturing, Marketing, Sourcing of Plastic Sheet, lamination sheet, Folders, I card and Files having wide application in printing and stationery.

(ii) The company has successfully launched wide products range, established goodwill for quality products and have the regular clients for the Laminated & PP sheet, Wiro, File, and folders. The company has developed and launched more than 125 products range in File, Folder & Diary under their Brand in Indian Market.

(iii) The company has B2B website www.kshitijpolyline.co.in and shortly launching B2C website as well.

(B) The Clients which company caters to:

(i) School (ii) Supermarket (iii) Shops (iv) Hotels (v) Shopping Mall

(C) Domestic and International Presence

They sell their products not only in India but exports to many countries such as Bhutan, Uganda, Kenya, South Africa, Spain, Dubai, Srilanka, Europe etc.

(D) Let us see the corporate video to understand more about the company:

 

Kshitij Polyline Limited IPO Stock Quote & Charts

34.00

+0.29%

  • Open: 34.00
  • High - Low: 34.00 - 34.00
  • Previous Close: 33.90
  • Total Traded Volume: 4000
  • Updated On: 10-Dec-2018

Objects of the Kshitij Polyline Limited IPO:

Objective of Kshitij Polyline Limited IPO are: 1. To purchase of Machinery and Equipment to manufacture the Laminated sheet, Wiro and PP Sheet suitable for stationery and office products 2. Working Capital Requirement 3. General Corporate Purpose 4. Issue Expenses

Kshitij Polyline Limited IPO Details:

Open Date: Sep 21 2018
Close Date: Sep 27 2018
Total Shares: 2,500,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Price Issue IPO
Issue Size: 8.75 Cr.
Lot Size: 4000 Shares
Issue Price: ₹ 35 Per Equity Share
Listing At: NSE Emerge
Listing Date: Oct 08 2018

Promoters And Management:

Promoters of Kshitij Polyline Limited Company are: Bharat Hemraj Gala, Chairman and Managing Director of the company, is Diploma in Plastic Engineering from Shree Bhagubhai Polytechnic College, Mumbai, and has more than 15 years of experience in Plastic & Stationery Industry. He started the business of manufacturing Plastic Stationery and Laminated & PP Sheets. During his career, he has developed a wide range of products with versatile application in lamination sheet, PP sheet, Office stationery accessories, Wiro Products and Files & Folders. He has continually kept himself updated about new technologies by visiting and participating in International and Domestic Exhibitions and trade fairs. Mr Hemraj Bhimshi Gala is Promoter of Kshitij Polyline Pvt. Ltd. He has an experience of more than 35 years of product development, trading of stationery, channel management and brand creation. He shares this valuable experience in moulding the marketing strategies of the company and R&D for new product development. He manages the channel for KPL & actively participates in enhancing the brand of KPL products. Ms Rita Bharat Gala, a Non-Executive Director with KPPL, is B.A in Economics, from Mumbai University and has more than 10 years of experience in customer relationship management & Human resources she has single-handedly managed ample exhibitions and fairs. She is familiar with a lot of software and her skills help her play a supportive role in many management activities.

Financials of Kshitij Polyline Limited IPO:

Particulars For the year/period ended (in Rs Lacs)
31-Mar-2018 31-Mar-17 31-Mar-16 31-Mar-15 31-Mar-14
Total Assets 2,477.39 1,719.42 1,483.16 1,422.31 1,309.95
Total Revenue 2,743.25 1,701.04 1,557.20 1,239.14 1,267.65
Profit After Tax 105.62 27.78 19.94 16.27 11.45

Comparison With Peers:

Company FV Mcap(cr) Revenue(cr) PAT(cr) EPS P/E ROE PAT Margin
Ecoplast 10 37 97 2.97 9.91 11.8 11.40% 3%
Duropack 10 6.5 14 0.65 1.4 10.71 8% 4.60%
Xpro 10 54 309 10 9 5 12.65% 3.23%
Cosmo Films 10 508 1836 84 44 5.79 13.10% 4.58%
Kshitij Polyline Limited IPO 10 30 27 1.05 1.21 28.9 6.07% 3.80%

Recommendation on Kshitij Polyline Limited IPO:

Review and Recommendation of Kshitij Polyline Limited IPO from IZ team is:3/10 [The Issue is aggressively priced at P/E of 28 as compared to its peers. The competition is very high in the business impacting the profit margins.]

Lead Manager of Kshitij Polyline Limited IPO:

  1. Monarch Networth Capital Limited

Registrar of Kshitij Polyline Limited IPO:

  1. Karvy Computershare Private Limited

Company Address:

Kshitij Polyline Limited Add. 8, Sona Udyog, Parsi Panchayat Road, Andheri East Mumbai - 400069, Maharashtra - India. Phone No: 022 - 42234107 E-mail: kshitij123@hotmail.com Website: www.kshitijpolyline.co.in

Discussion on Kshitij Polyline Limited IPO:

    All the peer companies are available at 5-10 P/E and Kshitij Asking a PE of 28

    The company has done the right issue at Rs.15 in March 2018 and now issuing shares to the public at Rs.35.

    Margins and Return ratio story in last 5 years

    (i) Year ————————–2014————2015—————-2016————-2017———–2018
    (ii) EBITDA Margins———-14%————-22%—————–15.6%————14.8%———-14.09%
    (iii) Profit Margins—————0.9%———–1.31%—————-1.28%————-1.6%————3.8%
    (iv) ROE————————–6.6%————8.65%————-9.58%————-6.5%———-6.07%(post issue)

    Conclusion:

    In spite of having good EBITDA margins, the Profit Margins are very thin due to high Finance cost. The ROE in the last 5 years is hovering in the range of 6.6% shows nothing has improved over the year. The company works in the industry which is highly competitive having huge competition from the unorganized sector and competition from China as well

    Debt Story based on FY18 Financials(Before Issue)
    (i) Debt= 9.14 Cr
    (ii) Equity= 8.6175Cr
    (iii) D/E= 1.06

    Debt Story based on FY18 Financials(After Issue)
    (i) Debt= 9.14 Cr
    (ii) Equity= 17.3675 Cr
    (iii) D/E= 0.52

    Conclusion: The Company has manageable debt.

    EPS story (Pre-Issue) based on FY18 Financials
    (i) PAT= 105.62 Lakhs
    (ii) Outstanding Shares= 53 Lakh
    (iii) EPS= 1.99
    (iv) P/E= 17.58

    EPS story (Post-Issue) based on FY18 Financials
    (i) PAT= 105.62 Lakh
    (ii) Outstanding Shares= 86.83
    (iii) EPS= 1.21
    (iv) P/E= 28.9

    Conclusion: The asking P/E is quite aggressive.

    Let us understand why the company is raising funds from the market??

    (i) The company has a manufacturing facility in Silvasa and in order to enhance the existing capacity company has decided to purchase Machinery used for manufacturing of wiro, laminated sheet, PP sheet Silvassa.

    (ii) The company has available space of 3200 sq. meters at Silvassa The space required for additional machines and equipment is approximately 375 sq. meters.

    (iii) Out of total 8.75 Cr raised from the issue, ~4.28 Cr will go for this activity.

    (ii) 3.25 Cr will be used for working capital requirements.

    (ii) Rest will be used towards General Corporate Events and Issue Expense( LM fees n ol)