All the peer companies are available at 5-10 P/E and Kshitij Asking a PE of 28
Kshitij Polyline Limited IPO
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:
Objects of the Kshitij Polyline Limited IPO:
Kshitij Polyline Limited IPO Details:
|Open Date:||Sep 21 2018|
|Close Date:||Sep 27 2018|
|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:
Financials of Kshitij Polyline Limited IPO:
|Particulars||For the year/period ended (in Rs Lacs)|
|Profit After Tax||105.62||27.78||19.94||16.27||11.45|
Comparison With Peers:
|Kshitij Polyline Limited IPO||10||30||27||1.05||1.21||28.9||6.07%||3.80%|
Recommendation on Kshitij Polyline Limited IPO:
Lead Manager of Kshitij Polyline Limited IPO:
Registrar of Kshitij Polyline Limited IPO:
Discussion on Kshitij Polyline Limited IPO:
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)
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)
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