Polycab IPO

Apply 4
Avoid 0

(i) Founded in 1996, Polycab wires is in the business of manufacturing and selling wires and cables and fast moving electrical goods (“FMEG”) under the “POLYCAB” brand.

(ii) They manufacture and sell a diverse range of wires and cables and the key products in the wires and cables segment are power cables, control cables, instrumentation cables, solar cables, building wires, flexible cables, flexible/single multi-core cables, communication cables and others including welding cables, submersible flat and round cables, rubber cables, overhead conductors, railway signaling cables, specialty cables and green wires.

In 2009, they diversified into the engineering, procurement, and construction (“EPC”) business, which includes the design, engineering, supply, execution, and commissioning of power distribution and rural electrification projects.

In 2014, they diversified into the FMEG segment and the key FMEG are electric fans, LED lighting and luminaires, switches and switchgear, solar products and conduits and accessories.

(iii) According to CRISIL Research, they are the largest manufacturer in the wires and cables industry in India, in terms of Revenue from the wires and cables segment and provide one of the most extensive ranges of wires and cables
in India. For Fiscal 2018, they have a market share of approximately 18% of the organized wires and cables industry. CRISIL Research expects the wires and cables industry in India to expand at a CAGR of approximately 15% in value terms to reach approximately ₹1,033 billion by Fiscal 2023.

(iv) They have 24 manufacturing facilities, including two joint ventures with Techno Electromech Pvt Ltd. (“Techno”) and Trafigura Pte Ltd (“Trafigura”), located across the states of Gujarat, Maharashtra and Uttarakhand and the union territory of Daman and Diu. Three of these 24 manufacturing facilities are for the production of FMEG, including a 50:50 joint venture with Techno, a Gujarat-based manufacturer of LED products.

In 2016, they entered into a 50:50 joint venture with Trafigura, a commodity trading company, to set up a manufacturing facility in Waghodia, India to produce copper wire rods (the “Ryker Plant”). They expect the Ryker Plant to commence commercial operations by the end of Fiscal 2019, with an estimated annual capacity of 258,620 MT of copper wire rods once it is fully operational.

(v) They have an established supply chain comprising a network of authorized dealers, distributors, and retailers. The distribution network in India comprises over 3,300 authorized dealers and distributors and 29 warehouses as of March 31, 2018.

They supply the products directly to the authorized dealers and distributors who in turn supply the products to over 100,000 retail outlets in India. The company manages sales and marketing activities through their corporate office, three regional offices and 20 local offices in various parts of India as on June 30, 2018.

In addition, in Fiscal 2018, they exported their products to over 40 countries.

Objects of the Polycab IPO:

Polycab IPO Issue is a mix of OFS (942 Cr) vide which Promoters and IFC(the Investment arm of World Bank ) are selling 17,582,000 Shares and Fresh Shares worth 400 Cr. The money raised from issuing Fresh Shares will be utilized for the following purpose: 1. Scheduled repayment of all or a portion of certain borrowings availed by the company= 80 Cr 2. To fund the incremental working capital requirements of the Company = 240 Cr 3. General Corporate Expenses.= 80 Cr

Polycab IPO Details:

Current GMP: 88-90
Open Date: Apr 05 2019
Close Date: Apr 09 2019
Total Shares: 25044686
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Build IPO
Issue Size: 1342 Cr.
Lot Size: 27 Shares
Issue Price: ₹ 533-538 Per Equity Share
Listing At: NSE,BSE
Listing Date: Apr 16 2019

Financials of Polycab IPO:

Particulars(Cr) 2016 2017 2018 9MFY19
Balance Sheet Item
Share Capital 141.206 141.206 141.206 141.206
Net Worth 1785.55 1996.5 2353.2 2722.8
Book Value 126.45 141.39 166.65 194
Long-Term Debt 100.00 161.00 158.00 93.00
Short-Term Debt 694.00 659.00 568.00 466.00
D/E 0.44 0.41 0.31 0.20
Current Ratio 1.36 1.33 1.61 1.48
Receivable Days 84.00 70.00 66.00 53
P/L Items
Revenue 5747.34 6122.22 6985.95 5561
EBITDA 524 555 803 748
EBITDA Margins 9.1% 9.1% 11.5% 13.4%
PAT 182 232 373 357
PAT Margins 3.2% 3.8% 5.3% 6.41%
EPS 12.89 16.43 26.42 25.32
Key Ratios and Valuation
RONW 10.2% 11.6% 15.9% 13.1%
P/E 17
P/B 2.56
Mcap 7994 Cr
Mcap/Sales 1.07
EV 8526 Cr
EV/EBITDA 11.39

Comparison With Peers:

Particulars(Cr) Polycab Wires Havells India Bajaj Electricals KEI Industries
Balance Sheet Item
Share Capital 141.206 62.51 20.41 15.67
FV 10 1 2 2
Net Worth 2353.2 3739 944 604
Book Value 166.65 60.00 92.00 77.00
Long-Term Debt 158.00 81.00 11.00 145.00
Short-Term Debt 568.00 35.00 706.00 604.00
D/E 0.31 0.03 0.75 1.24
Current Ratio 1.61 1.47 1.09 1.25
Receivable Days 66.00 14.00 134.00 107.00
P/L Items
Revenue 6985.95 8255.00 4760.00 3468.00
Revenue Growth in 3 years 10.25% 22.46% 1.35% 14.7%
EBITDA 803 1168 348 350
EBITDA Growth in 3 years 23.79% 19.57% 10.70% 18.32%
EBITDA Margins 11.5% 14.1% 7.3% 10.1%
PAT 373 712 95.6 144
PAT Growth in 3 years 43.16% -0.21% -6.48% 52.40%
PAT Margins 5.3% 8.6% 2.0% 4.2%
EPS 26.42 11.40 8.30 18.37
Key Ratios and Valuation
RONW 15.9% 19.0% 10.1% 23.8%
P/E 17 66.40 62.89 21.88
P/B 2.56 12.62 5.67 5.25
Mcap 7994 47320 5327 3165.00
Mcap/Sales 1.07 5.73 1.12 0.91
EV 8526 45892 6019 3838.00
EV/EBITDA 11.39 39.29 17.30 10.97

Recommendation on Polycab IPO:

Review and Recommendation of Polycab IPO from IZ Team is : 6/10. (i) The IPO is priced very reasonably at P/E of 17 as compared to its peers. (ii) The EPS for 9MFY19 has almost doubled as compared to 9MFY18. (iii) The Debt of the company is continuously decreasing in the last 3 years. (iv) Market leader in wires and cables in India. (v) Strong distribution network. (vi) Strong brand in the electrical industry.

Registrar of Polycab IPO:

  1. Karvy Computershare Private Limited

Bid Details of Polycab IPO as on
09-Apr-2019 22:30:01 IST

No.of shares offered No. of shares bid No. of total times
5,004,328 462,619,890 92.44
3,737,535 412,717,005 110.42
8,720,914 40,529,106 4.65
175,000 560,142 3.20
- - -
17,637,777 916,426,143 51.96
No.of shares offered No. of shares bid No. of total times
5,004,328 265,347,792 53.02
3,737,535 221,209,569 59.19
8,720,914 29,878,929 3.43
175,000 483,975 2.77
- - -
17,637,777 516,920,265 29.31
No.of shares offered No. of shares bid No. of total times
5,004,328 197,272,098 39.42
3,737,535 191,507,436 51.24
8,720,914 10,650,177 1.22
175,000 76,167 0.44
- - -
17,637,777 399,505,878 22.65

Total Number of Applications in Retail Category: 1,224,608

Application-wise Subscription in Retail Category: 3.80X

Discussion on Polycab IPO:

    @marketwizard : brought 77 shares at 655 shall i hold oo sell ? if i hold what cud be the target and in how many days ?

      Hold Polycab for the target of 700 within 2 months.

    Forwarded as Received

    *Polycab India LtD*

    Now We can Compare with KEI Industries, but I would give Little Premium over *KeI Industries* to *Polycab* due to Shift from Only Wires and Cables to FMEG(Fast moving Electrical good), although contributes less than 15% but growing at *35-40%* CAGR
    And *Polycab* is building its Brand

    Now *KEI Industries* trades at *10* times EV/EBIDTA and *20 Times Earnings* for FY19, with Little high ROE but little more debt than *Polycab*

    Now *Polycab*

    At *10* times EV/EBIDTA for FY19 price come at *640*
    And *10 times EV/EBIDTA* *FY20* price comes at *680-690*

    PE of *20 FY19 price comes at *620* and PE of *20 for FY20* price comes at *670-680*

    Sales Growing at More than *15-18% CAGR*

    We have To watch out it’s *Electrical Good business* which have high Margin, and command High EV/EBIDTA,

    So if we give *11 times FY20 EV/EBIDTA*
    Giving a premium of *10% over normal due to Electrical good business*

    *Price comes at *750*

    So Anything less than *630-635-620-610*

    *Would command a buy*

    *670-680* anything less than sell would be selling cheap

    So *620-640-680* listing expectation.

    Got 3/9.
    What should be the strategy.
    Should I hold or sell on listing?
    Thanks in advance.

      Sell 50% on listing and then hold 50% with stop loss at 600. Very high chances of breaking 700 if follow up buying comes after listing.

      Best of luck to all allottes.

    I have applied for 10 lots through SBI net banking. BUT Not allotted to me OR EVEN get refund my money in my bank account. please help.

      Hi Neha,
      Please check this with SBI customer care. They should adjust the amount.
      Good luck!

    @Market wizard applied for 2 lots but i didnt get 1 lot.even HDFC amc when it is more than poly cab ipo i got allotted 1 unit.What shud i do ?

    kindly note polycab to list tommorow

    Name of the company
    Polycab India Limited

    542652

    POLYCAB

    INE455K01017

    I have applied 3 lots and got 1 successfully.Should I hold it ??@Marketwizard Please help I m new in Market

    THANK YOU MARKET WIZARD FOR YOUR SINCER AND HELPFUL COMMENTS,,THESE COMMENTS MADE ME MORE RICHER,,GOD BLESS YOU,POLYCAB GREY MARKET RATE IN KOLKATA 100-105

    *87000* apps rejected in *polycab ipo different reason*

    *Polycab India Limited IPO – Basis of allotment update*

    *Retail* Investors will get *27 Shares in 401:1416 ratio (3.53x)*

    *HNI Final Subscription: 108.64198*

    Polycab issue price pe is 16. so 538÷16=33 approx . it will definitely trade above 20 pe . as Kei wires have pe of 19.50 but polycab wire is way better than kei wires. so at least 33×4=122-130 gain jarur aana chahiye…

    How many ipo we apply with a bank in different demats account according to new sebi rule from which date new rule applicable

    Polycab India Subscription
    9-4-2019 @ 03:53:32 PM
    QIB => 88.9526
    NII => 105.6834
    RII => 3.9380
    EMP => 2.7162
    TOTAL => 49.6072

    Polycab India Subscription
    9-4-2019 @ 03:33:57 PM
    QIB => 75.3626
    NII => 64.2031
    RII => 3.8496
    EMP => 2.6949
    TOTAL => 36.9176

    🔥🔥Polcab IPO Demand🔥🔥

    JM, Kotak, Birla HNI worth 12K Crore Bidded Now..
    Also Axis, Bajaj will file HNI application worth 6K Crore Now.

    Just 4 Fun
    around last 1 hour due to polycab demand in QIB & NII temperature is jumped to 45+ in market

    Polycab India Subscription
    9-4-2019 @ 03:28:19 PM
    QIB => 69.3549
    NII => 44.6807
    RII => 3.8020
    EMP => 2.6830
    TOTAL => 31.0525

    Polycab India IPO

    Day 3 at 2:30PM

    The following data is assuming the shares will be issued at @538/- (upper price band)

    QIB*: 36.64X (*Excluding Anchor)
    NII: 7.07X
    RII: 3.37X
    Empl.: 2.51X
    Total: 9.82X

    Applications: 8,63,000 Approx
    No. of Applic-wise: 2.68X

    Polycab India IPO

    GMP 87 +/- 1
    Kostak 750 – 800

    why the allotted shares are same even if applied for more with same allotment ratio ?
    in that case why anybody will apply for more ?

      Are you taking about RVNL?

      If yes, then I would like to clarify that when the issue got oversubscribed, the allotment will be done for one application only irrespective of the application applied and that too via the lottery system.

    Polycab India IPO

    Day 2 at 5:00PM

    The following data is assuming the shares will be issued at @538/- (upper price band)

    QIB*: 3.63X (*Excluding Anchor)
    NII: 0.70X
    RII: 1.52X
    Empl.: 1.77X
    Total: 1.66X

    Applications: 3,68,242 Approx
    No. of Applic-wise: 1.14 X

    Polycab India IPO

    GMP 76 +/- 1
    Kostak 800 – 825

    ☄Polycab 800 buyer
    900 seller
    Sub to 1700 buyer

    ☄Metro 375 buyer
    Sub to 550 buyer
    surat

    Polycab India Subscription
    8-4-2019 @ 11:22:53 AM
    QIB => 1.9648
    NII => 0.1188
    RII => 0.6311
    EMP => 0.8566
    TOTAL => 0.9032

    Consolidated Brokerages Views on Polycab IPO

    Angel: ” In terms of valuations, the pre-issue P/E works out to 16.7x its FY2019 annualized earnings (at the upper end of the issue price band), which is slightly lower compared to its peers like Finolex Cables (20.7x) & Kei Industries (20.x). Further, Polycab’s market leadership position in wires & cables segment, diversified product portfolio, strong distribution network & brand recall and proven financial track record are the key positives. Given the above favorable factors, we recommend Subscribe to issue. “

    Capital Market: ” Score 48/100, As the FMEG business further matures and more and more products are added in the category, the leverage on the existing distribution network and economies of scale provides a good scope for margin improvement in the FMEG business. The issue is offered at reasonable valuations and offers margin of safety for investors.”

    Dalal Street Journal: ” At the higher price band of Rs. 538, the offer is demanding a market cap to sales (FY18) of 1.14 times, which is lower than that of Havells that has current market cap to sales of 5.8 times. However, the other key player KEI Industry is trading at market cap to sales of less than one. In terms of PE, the offer is made at around 21.6 times its FY2018 consolidated EPS of Rs. 24.95 on a post-issue equity share capital of Rs. 148.64 crore of face value of Rs. 10 each. Havells is currently trading at a PE of almost 70x, while KEI industries is trading at a PE of 22.12x.
    Looking at valuation matrices, we believe that the offer is attractively valued and you can subscribe to the issue.”

    ICICIDirect: “At the IPO price band of | 533-538, the stock is available at a price to earnings multiple of 22x FY18 EPS. We believe the issue is available at attractive valuation, considering its leadership position in the wire & cable industry, low debt/equity (~0.3x) ,attractive return ratios (RoCE ~21%, RoE ~16%). We recommend SUBSCRIBE to the issue at the offer price. “

    Religare: “Polycab’s fundamental track record has been sound over FY14-18 with revenue and PAT CAGR of 14.2% and 42.8% respectively led by margin improvement (+150bps), higher other income and lower interest rate. We believe the strong performance of the company would continue on the back of positive industry growth prospects largely due to government
    initiatives in power and infrastructure, an increase in industrial investment, a rise in consumer spending and an increase in exports of
    wires and cables”

    SMC : “ Polycab India manufactures and sells a diverse range of wires and cables and their key products in the wires and cables segment. The company is engaged in the FMEG segment, which has bright prospects ahead. Moreover, the LED lightning arena is in advance mode. On the issue pricing front, it is reasonably priced and its fundamentals are also good. Investor may opt the issue. “

    SP Tulsiyan website: “Market leadership, strong brand, promoter-cum-professional management, improving financials and attractive pricing make this issue of Polycab India a subscribe. ”

    (i) Polycab India Limited raises Rs 401 crore from 25 anchor investors @ Rs 538 per share Initial public offering to open on April 05, 2019 and to close on April 09, 2019 Price Band: Rs. 533 to Rs. 538 per Equity Share

    (ii) The anchor investors include:

    THE NOMURA TRUST AND BANKING CO. LTD. AS THE TRUSTEE OF NOMURA INDIA STOCK MOTHER FUND 8.48%;

    THE LEME MASTER FUND LIMITED 8.48%;

    AUBURN LIMITED 5.98%;

    KUWAIT INVESTMENT AUTHORITY FUND 223 3.74%;

    ASHOKA INDIA OPPORTUNITIES FUND 1.58%;

    ASHOKA INDIA EQUITY INVESTMENT TRUST PLC 1.58%;

    RELIANCE CAPITAL TRUSTEE CO. LTD. A/C RELIANCE LARGE CAP FUND 8.48%;

    L&T MUTUAL FUND TRUSTEE LTD. – L&T FOCUSED EQUITY FUND 2.85%;

    L&T MUTUAL FUND TRUSTEE LTD. – L&T INFRASTRUCTURE FUND 2.07%;

    L&T MUTUAL FUND TRUSTEE LTD. – L&T LARGE AND MID CAP FUND 3.56%;

    ADITYA BIRLA SUNLIFE TRUSTEE PVT. LTD. A/C ADITYA BIRLA SUNLIFE INFRASTRUCTURE FUND 0.99%;

    ADITYA BIRLA SUNLIFE TRUSTEE PVT. LTD. A/C ADITYA BIRLA SUNLIFE MID CAP FUND 5.25%;

    ADITYA BIRLA SUNLIFE TRUSTEE PVT. LTD. A/C ADITYA BIRLA SUNLIFE INDIA GEN NEXT FUND 0.99%;

    FRANKLIN INDIA SMALLER COMPANIES FUND 8.48%;

    SUNDARAM MUTUAL FUND A/C SUNDARAM MID CAP FUND 8.48%;

    IDFC STERLING VALUE FUND 3.99%;

    IDFC EQUITY OPPORTUNITIES SERIES (6) 0.75%;

    TATA MUTUAL FUND – TATA SMALL CAP FUND 2.49%;

    SBI LIFE INSURANCE CO. LTD. 5.98%;

    ADITYA BIRLA SUN LIFE INSURANCE COMPANY LTD. 4.74%;

    BAJAJ ALLIANZ LIFE INSURANCE CO. LTD. 2.49%;

    ABAKKUS GROWTH FUND – (1) 2.49%;

    EDELWEISS ALTERNATIVE INVESTMENT OPPORTUNITIES TRUST – EDELWEISS CROSSOVER OPPORTUNITIES FUND – SERIES II 2.49%;

    WHITE OAK INDIA EQUITY FUND 1.58%;

    ICICI LOMBARD GENERAL INSURANCE CO. LTD. 2.00%.

    RVNL
    0.50 Seller

    Metropolis
    40-45

    Polycab
    70-75

    A must apply IPO. Waiting for Anchor Investors list .

    (a) 9MFY19

    Revenue= 5561 Cr
    PAT= 358 Cr
    EPS= 25.31

    If we annualize 9MFY19 Financials, the EPS for FY18-19 would be 32.

    The IPO Price of 538 is coming at P/E of 16.75.

    (b) Debt

    (i) as on 31.03.2017

    Long-Term Debt = 166 Cr
    Short-Term Debt = 1018 Cr

    (ii) as on 31.03.2018

    Long-Term Debt = 158 Cr
    Short-Term Debt = 568 Cr

    (iii) as on 31.12.2018

    Long-Term Debt = 93 Cr
    Short-Term Debt = 446 Cr

    Conclusion: The IPO is priced at mouth-watering valuation. Ready for some blockbuster gain in Poly Cab IPO. The company is consistently reducing debt which is a big positive.

    I have two accounts with HDFC bank in the name of me and my spouse. I could register only one upi id for one account and a number associated with that. My spouse’s account too is linked with dmat but a upi can’t be registered as we have one common cellphone. We have installed Bhim (independent) upi app and created a upi id linking my spouse’s HDFC account but the id is like abc@upi and not abc@hdfcbank. Can an ipo application be made using this abc@ipi id linked to HDFC account?

    Polycab India LTD
    Issue Opens : 8th April
    Issue Closes : 10th April

    Price Band
    787/- to 789/-

    Lot size : 19 Shares

    Recommendation :
    Must Apply

    KEI Industries and Polycan both have shown good growth both in Top line and bottom line.

    For Havells, it is more of Top line and rather degrowth in the bottom line.

    The Havel valuation are very expensive at current level.

    KEI among three listed is available at reasonable Valuation.

    If we give same valuation to Poly cab it’s Mcap could be in range of 9000 Cr.

    As per market estimates vide OFS the promoters and IFC ( the arm of World Bank) are selling close to 2.488 cr there by getting 2000 Cr. So as per this price could be in range of 800

    1. Market leader in wires and cables in India

    2. Diverse suite of electrical products with varied applications across a diverse customer base

    3. Strong distribution network

    4. Manufacturing facilities with high degree of backward integration.

    5.Strong brand in the electrical industry.

    6. The experienced and committed management team