i. Mr. Ashish Jain, aged 49 years is Chairman cum Managing Director and also the Promoter of the Company. He holds a Master’s Degree in Business Administration (MBA) from Fairleigh Dickinson University, New Jersey, USA and Bachelor of Chemical Engineering from Bangalore University. He was appointed on the Board on April 26, 2004 and further designated as the Chairman cum Managing Director of the Company on January 11, 2023 for a period of 5 years not liable to retire by rotation. He is having 23 years of experience in the Rubber Industry. He has been instrumental in taking major policy decisions of the Company. He is playing a vital role in formulating business strategies and effective implementation of the same. He is responsible for the expansion and overall management of the business of the Company. With his vast and extensive experience in the Rubber industry spanning around two decades, he leads the global operations of the organization including strategic planning, team mentoring and business administration. ii. Mr. Anil Jain, aged 68 years, is the Whole Time Director of the Company. He holds Bachelor degree in Commerce. He was originally appointed on the Board on April 26, 2004 as Director and further designated as the Whole-Time Director of the Company on January 11, 2023 for a period of 5 years liable to retire by rotation. He is having experience of 37 years in Marketing and Sales. iii. Mr. Saurabh Jain, aged 40 years is the Whole-Time Director of the Company. He holds Bachelor degree in Business Administration (BBA). He was appointed on the Board as Executive Director w.e.f., April 26, 2004 and further designated as the Whole-Time Director of the Company on January 11, 2023 for a period of 5 years liable to retire by rotation He is having experience of 19 years of production and procurement.

A. Balance Sheet

Particular (In Lakhs)	Mar-20	Mar-21	Mar-22	9MFY23
Equity Share Capital	400.00	400.00	400.00	540.00
Reserves	-265	-154	154	230
Borrowings	1,245	1,649	1,759	1,670
Trade Payables	582	457	253	349
Other Liabilities	171	237	237	168
Total Liabilities	1,997	2,343	2,248	2,186
Net Block	284	256	218	204
Other Assets	50	65	92	82
Total NC Assets	334	321	310	286
Receivables	784	1,061	941	875
Inventory	751	953	1,153	1,430
Cash & Bank	49	46	74	97
Other Assets	215	208	324	269
Face value	10	10	10	10

B. Profit & Loss Statement

Particular (In Lakhs)	Mar-20	Mar-21	Mar-22	Mar-23
Sales	1,933	2,316	3,503	3,995
Raw Material Cost	1,501	1,707	2,666	3,105
Change in Inventory	-19	37	24	-3
Employee Cost	124	166	177	201
Other Expenses	120	171	215	175
Other Income	6	3	9	2
EBITDA	213	238	429	518
EBITDA Margin	11.02%	10.28%	12.24%	12.98%
Depreciation	47	55	39	27
Interest	67	75	74	74
Profit before tax	99	108	316	417
Tax	5	-2	7	129
Net profit	94	110	309	288
NPM (%)	4.83%	4.75%	8.78%	7.20%

C. Cash Flow Statement

Particular (In Lakhs)	Mar-20	Mar-21	Mar-22	9MFY23
Cash From Operating Activity
Profit From Operation	208	237	429	389
Receivable	23	-277	119	66
Inventory	-454	-202	-200	-277
Payable	374	-125	-204	96
Other WC Items	6	73	-117	-16
Working Capital Changes	-51	-531	-402	-130
Direct Taxes	0	1	9	87
Net Cash Inflow from Operating Activity	158	-296	19	172
Cash from Investing Activity
Fixed assets purchased	-74	-28	-1	-6
Fixed assets sold	0	0.5	0	0
Other investing items	2	-9	-26	-0.4
Net cash inflow from investing activities	-72	-37	-27	-6
Cash from Financing Activity
Proceeds from borrowings	0	405	109	0
Repayment of borrowings	-19	0	0	-89
Intrest paid fin	-67	-75	-74	-55
Other financing items	3	1	0.9	1
Net Cash Flow	2	-3	28	23

   

Name of the Company	Revenue (In Crore)	PAT (In Crore)	EPS ( in Rs)	P/E	CMP	Mcap (In Crore)
Pentagon Rubber Limited	40	2.8	3.73	18.8	70	54
Somi Conveyor Beltings Limited	94	3	2.95	18.7	55	65
International Conveyors Limited	215	29	4.36	16.3	71	469

* All the Data is as per FY23.

Review and Recommendation of Pentagon Rubber SME IPO by IZ team is 4/10 1. Product Range: Pentagon Rubber specializes in manufacturing various rubber products, including Rubber Conveyor Belt, Transmission Belts, Rubber Sheets, and Elevator Belts. They mention that their products are continuously improved using the latest developments in raw materials, indicating a commitment to innovation and quality. 2. Business-to-Business (B2B) Expertise: The company claims to offer competence and expertise to their B2B partners in multiple areas. This suggests that they provide support and solutions related to material handling, ore transportation systems, and system integration, catering to the specific needs of industries. 3. Manufacturing Plant and Infrastructure: Pentagon Rubber has set up a manufacturing plant that is managed by a team of experienced professionals. The organization emphasizes having high-quality infrastructure and facilities, indicating a focus on maintaining production standards and efficiency. 4. Global Business Relations: The company has established a wide-spread network of stockists and importers, enabling them to expand their business relations across boundaries. They mention having a good clientele in many countries, which suggests a successful international presence and the ability to meet the needs of diverse markets. 5. Location: The manufacturing unit of Pentagon Rubber is located in Dera Bassi, Punjab, which is 25 kilometers away from Chandigarh city in India. This information provides a geographical context for their operations, indicating a specific location for potential customers or partners to engage with the company. 6. Advanced Technology and Production Capacity: Pentagon Rubber highlights their installation of one of the longest conveyor belting presses in India, with a significant production capacity of 21 meters in a single stroke. They mention the capability to produce conveyor rubber belting up to 3150KN/m, positioning themselves as one of the top manufacturers in India. This showcases their adoption of advanced technology and their ability to meet high-demand requirements. 7. Revenue And PAT Growth : Revenue has grown from 19 Cr inFy20 to 40 Cr in Fy23 and PAT has grown from 94 Lakh to 2.88 Cr in the same period. Shows excellent growth in revenue and PAT. 8. Cash-Flow from Operations:A total of 53 lakhs of cash has been generated from operations in the last 4 years, indicating a relatively low amount. This suggests that the business has a high working capital requirement. 9. EBITDA Margins: Company has decent EBITDA margins ranging from 11% to 13% in the last 4 years. 10. Debt Position: Post IPO debt/equity will go down below 1. 11. ROE: The net worth as of 31.12.2022 is approximately 7.7 Cr. After raising 16 Cr from the IPO, the estimated net worth would be around 24 Cr. With an expected profit after tax (PAT) of 2.88 Cr in FY23, the return on equity (ROE) would be 12%. 12. Valuation: The asking P/E in the IPO is 18x, which is fully priced as compared to peer. So, nothing much left on table.

Pentagon Rubber Limited Gulabgarh Road, Village Behra Dist. S.A.S. Nagar, Derabassi, Mohali - 140507 Phone: +91-9816610646 Email: corporate@pentagonrubber.com Website: https://pentagonrubber.com/