Prince Pipes and Fittings Limited IPO

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About Prince Pipe

(i) The Company is recognized as one of the leading polymer pipes and fittings manufacturers in India in terms of number of distributors (Source: CRISIL Research Report) having 30 years of experience in the industry.

(ii) They market products under two brand names: Prince Piping Systems; and Trubore. They currently manufacture polymer pipes using four different polymers: UPVC; CPVC; PPR; and HDPE, and fittings using three different polymers: UPVC; CPVC; and PPR.

Use of Products in Industry

(i) The products are used for varied applications in plumbing, irrigation, and soil, waste, and rainwater (“SWR”) management.

(ii) The product range meets the requirements of both the rural and urban markets.

Manufacturing Units

(i) Prince Pipe has 5 strategically located manufacturing plants, which has enabled the company to develop a strong presence in North, West and South India.

The plants are located at the following locations: Athal (Union Territory of Dadra and Nagar Haveli); Dadra (Union Territory of Dadra and Nagar Haveli); Haridwar (Uttarakhand); Chennai (Tamil Nadu); and Kolhapur (Maharashtra).

(ii) The total installed capacity of all the five existing plants is 242,916 tonnes per annum as of July 31, 2018.

Distributorship Selling Model

They distribute products from five plants and 10 warehouses. Prince Piping Systems directly sells products to distributors, who then resell the products to wholesalers, retailers, and plumbers. As of June 30, 2018, the company has 843 distributors in India.

Financials:

(i) The revenue from operations for Fiscal 2016, Fiscal 2017 and Fiscal 2018 was  Rs.1081 Crores, 1330 Crores and 1320 Crores respectively, representing a CAGR of 10.52%.

(ii) The EBITDA for Fiscal 2016, Fiscal 2017 and Fiscal 2018 was 98 Crores,  160 Crores, and 161 Crores respectively, representing a CAGR of 28.39%.

(iii) The profit for the year for Fiscal 2016, Fiscal 2017 and Fiscal 2018 was 29 Crores, 74 Crores, and 73 Crores, respectively, representing a CAGR of 57.49%.

Objects of the Prince Pipes and Fittings Limited IPO:

The IPO is a mix of OFS and Fresh Shares: a) OFS- Rs.250 Crores The Promoter Selling Shareholders intend to use the proceeds of the Offer for Sale towards repayment of the outstanding bonds issued by Express Infra Projects LLP. b) Fresh Shares- Rs.250 Crores For financing the project cost towards the establishment of a new manufacturing facility and up-gradation of equipment at our manufacturing facilities.
RHP of Prince Pipes and Fittings Limited IPO

Prince Pipes and Fittings Limited IPO Details:

Open Date: Dec 18 2019
Close Date: Dec 20 2019
Total Shares: 28089887
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Building
Issue Size: 500 Cr.
Lot Size: 84 Shares
Issue Price: ₹ 177-178 Per Equity Share
Listing At: NSE,BSE
Listing Date: Dec 30 2019

Promoters And Management:

1. Jayant Shamji Chheda. 2. Tarla Jayant Chheda. 3. Parag Jayant Chheda. 4. Vipul Jayant Chheda. 5. Heena Parag Chheda.

Financials of Prince Pipes and Fittings Limited IPO:

(Fig. in Crores)
Year Revenue EBITDA OPM PAT NPM EPS
2016 1081 100 9.3% 29.3 2.7% 2.66
2017 1332 165 12.4% 73.1 5.5% 6.65
2018 1326 203 15.3% 73.3 5.5% 6.66
2019 1578 193 12.2% 83.2 5.3% 7.56

Comparison With Peers:

Peers Revenue Revenue growth in 3 years PAT Growth  EBITDA OPM PAT RONW PAT( 3 years) CFO(3 years) Mcap P/E Return ( 1year)
Prince Pipe 1578 8.84% 6.68% 193 12% 83.2 12.20% 229 478 1938 23.54
Finolex Industries 3132 9.21% 1.82% 645 21% 353 13.90% 987 996 6840 19.81 11.11%
Astral Poly Technik 2522 15.12% 15.18% 401 16% 200 15.66% 525 605 17619 73 40%
Supreme Industry 5619 12.16% 9.16% 785 13.9% 434 20.10% 1309 1628 14343 34 14.50%

Recommendation on Prince Pipes and Fittings Limited IPO:

Review and Recommendation of InvestorZone is: 3/10 The peers are trading at a comfortable valuation, shown good growth and have better performance ratios than Prince Pipe. The OFS will give promoters the money to repay the debt of Express Infra Projects LLP, as they have pledged shares while raising money. So this will remain a hangover till the money is paid. We have already seen what has happened in Sterling and Wilson, wherein, the promoters are still finding a way to repay debt as promised with IPO money.

Company Address:

Registered Office: Plot No.1, Honda Industrial Estate, Phase II, Honda Sattari, Honda, Goa 403 530, India Corporate Office: 8th Floor, Mumbai 400 028 Telephone: +91 22 66022222; Facsimile: +91 22 66022220 E-mail: investor@princepipes.com; Website: www.princepipes.com.

Bid Details of Prince Pipes and Fittings Limited IPO as on
20-Dec-2019 17:00:01 IST

No.of shares offered No. of shares bid No. of total times
5,649,718 19,972,680 3.54
4,237,288 5,107,956 1.21
9,887,006 18,638,760 1.89
- - -
- - -
19,774,012 43,719,396 2.21
No.of shares offered No. of shares bid No. of total times
5,649,718 10,127,460 1.79
4,237,288 1,981,056 0.47
9,887,006 13,022,940 1.32
- - -
- - -
19,774,012 25,131,456 1.27
No.of shares offered No. of shares bid No. of total times
5,649,718 9,845,220 1.74
4,237,288 3,126,900 0.74
9,887,006 5,615,820 0.57
- - -
- - -
19,774,012 18,587,940 0.94

Discussion on Prince Pipes and Fittings Limited IPO:

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