Rajshree Polypack Limited IPO

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(i) About Rajshree Polypack Limited

a) Rajshree Polypack Limited has more than a decade of experience in operating in the plastic packing products industry.

b) They are one of the leaders in manufacturing of Rigid plastic sheets and Thermoformed packaging products to the industry segment.

c) They are continuously strengthening themselves in the field of rigid and semi-rigid plastic sheets and plastic packaging products.

(ii) Products of Rajshree Polypack Limited

a) The products range from yogurt & ice cream containers, food packing, QSRs, coffee cups, bakery products and confectioneries, beverage cups & containers, generic bowls, punnets & trays for fruits and vegetable packing, lids etc.

b) They have a wide range of sizes and designs to meet the customers’ need.

(iii) Capacity and Technology

(i) They have an annual capacity of over 10,000 MT and more than 100 products,

(ii)  Their manufacturing facility at Factory Unit – II at Daman has been equipped with the state of the art machinery. In the year 2004-05, they were one of the early ones to introduce 6-color printing in dry offset technology in the Indian market. In the year 2008-09, they introduced alternate decoration technology of shrink sleeving on cups and containers which has grown extensively since then.

Rajshree Polypack Limited IPO Stock Quote & Charts

112.30

+0.36%

  • Open: 112.75
  • High - Low: 112.75 - 110.75
  • Previous Close: 111.90
  • Total Traded Volume: 9000
  • Updated On: 17-Oct-2018

Objects of the Rajshree Polypack Limited IPO:

Objective of

Rajshree Polypack Limited IPO

are: 1. Setting up of Factory Unit IV at Daman 2. General corporate purposes

Rajshree Polypack Limited IPO Details:

Open Date: Sep 10 2018
Close Date: Sep 12 2018
Total Shares: 29,60,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue IPO
Issue Size: 35.82 Cr.
Lot Size: 1000 Shares
Issue Price: ₹ 119-121 Per Equity Share
Listing At: NSE Emerge
Listing Date: Sep 24 2018

Promoters And Management:

Promoters of Rajshree Polypack Limited Company are: 1. Ramswaroop Radheshyam Thard 2. Naresh Radheshyam Thard 3. Sajjan N. Rungta HUF

Capital Structure:

(i) Authorized Share Capital 1,25,00,000  Equity shares at FV@10) 12.5 Cr
(ii) Issued, Subscribed,& Paid-up Share Capital Before Issue (82,74,000 Equity Shares at FV@10) 8.274 Cr
(iii) Present Issue ( 29,60,000 Equity Shares at FV@10) 2.96 Cr
(iv) Reservation for Market Maker (1,48,000 Shares at FV@10) 14.8 lacs
(v) Reservation for QIB (14,05,000 Equity Shares at FV@10) 50%
(vi) Reservation for HNI(4,22,000 Equity Shares at FV@10) 15%
(vii) Reservation for Retail( 9,85,000 Equity Shares at FV@10) 35%
(viii) Paid Up Share Capital after the issue 11.234 Cr

Financials of Rajshree Polypack Limited IPO:

1. Assets and Liabilities Key Parameters
Year Asset(lacs) Debt(lacs) Net Worth(lacs) Book Value Receiveable days
FY14 5,707.24 2,391.73 2,326.53 93.86 53
FY15 6,447.78 2,766.34 2,398.59 96.77 52
FY16 7,610.30 2,625.67 3,120.49 117.37 54
FY17 8,157.94 2,092.27 3,935.34 49.34 48
FY18 8,565.66 1,485.90 4,698.44 58.91 66
Post Issue 8,637.57 76.89
2. Profit n Loss Key Parameters
Year Revenue(lacs) PAT(lacs) Outstanding Shares(lacs) EPS
FY14 3,901.01 -3.89 24.787 -0.16
FY15 6,505.96 72.06 24.787 2.91
FY16 9,565.77 783.24 26.587 29.46
FY17 9,642.79 886.85 79.761 11.12
FY18 11,250.39 931.09 79.761 11.67
Post Issue 112.34 8.29
3. Cash Flow Statement(all figures in lacs)
Particulars FY18 FY17 FY16 FY15 FY14
(i) Net Cash Generated from Operation 1,336.53 1,353.17 1,731.97 530.14 -85.77
(ii) Net Cash Generated from Investment -345.79 -1,332.56 -719.53 -371.93 -1,756.76
(iii) Net Cash Generated from Financing Activity -962.55 -783.77 -519.01 131.21 1,206.14
(iv) Total[ (i)+(ii)+(iii) ] 28.19 -763.16 493.43 289.42 -636.39
(v) Cash and Cash Equivalents at the Beginning of the Year 54.77 817.93 324.5 35.08 671.47
(vi) Cash and Cash Equivalents at the end of the Year 82.96 54.77 817.93 324.50 35.08
4. Ratio Analysis
Ratios Parameters 2014 2015 2016 2017 2018
Profitability EBITDA Margins 10% 14% 21% 22% 18%
PAT Margins 0% 1% 8% 9% 8%
Return ROE NA 3% 25% 23% 20%
ROCE 3% 11% 32% 28% 26%
Liquidity Current Ratio 1.52 1.46 1.44 1.64 1.81
Quick Ratio 0.94 0.98 1.11 0.90 1.27
Leverage D/E 1.03 1.15 0.84 0.53 0.32
Interest Coverage 0.82 1.29 4.08 5.73 6.47
Efficiency Asset Turnover 0.68 1.01 1.26 1.18 1.31
Inventory Days NA 40 29 38 39
Key Notes: a) The Revenue is growing at CAGR of 30% from FY14 to FY18 [Excellent Growth]. b) The PAT is growing at CAGR of 134% from FY15 to FY18 [Excellent Growth]. c) The Annualized EPS[ Post Issue] = 8.29 d) P/E(post issue)= 14.59 [Reasonable Valuation] e) P/B(post issue)= 1.57 [Reasonably Valuation] f) D/E(post issue) = 0.32 [Manageable] g) Mcap/Sales(ideally <2)= 1.214 on FY18 sales [Reasonable priced]. h) EV/EBITDA(ideally <10)= 7.12 [Reasonable priced]. i) The Company is generating healthy operational cash flows in last 4 years which is big positive for the business.[ Big Positive] j)The Company has manageable receivables days and excellent EBITDA margins in last 5 years[ Big Positive]

Comparison With Peers:

Company FV Sales(cr) PAT(cr) Mcap(cr) EPS Adj.P/E RONW ROCE Mcap/sales EV/EBITDA
Rajshree Polypack 10 112 9.31 135.93 8.29 15.86 19.82% 23.00% 1.214 7.12
Mold tek pack 5 347 27 889 10 35.3 15.61% 22.00% 2.56 16.93
Source: MoneyControl and RHP Note: 1. The Financials as of March 2018 is taken for comparison. 2. The Current Market Price of Shares is taken as on 31.08.2018.

Recommendation on Rajshree Polypack Limited IPO:

Review and Recommendation of Rajshree Polypack Limited IPO from our IZ team is: 6/10 [The Company has shown excellent growth in the last 5 years. The EBITDA Margins are excellent. The Company has a manageable D/E. The Issue is priced at reasonable valuation in terms of P/E, P/B, Mcap/Sales and EV/EBITDA. The only risk is certain states like Maharashtra has started banning plastic. However, company revenue is merely 2% from Maharashtra but if other state start banning it will have a severe impact on revenues. ] 1-5: Fair 5-7: Good 7-10: Excellent  

Lead Manager of Rajshree Polypack Limited IPO:

  1. PL Capital Markets Private Limited

Registrar of Rajshree Polypack Limited IPO:

  1. Link Intime India Private Limited

Company Address:

Rajshree Polypack Limited 212, 2nd Floor, Lodha Supremus,Road No. 22, Kishan Nagar, Wagle Estate, Thane (W) – 400604, Maharashtra, India. Phone.+91-22 25818200 Fax No. +91-22 25818250 E-mail:cosec@rajshreepolypack.com Website:www.rajshreepolypack.com

25th Sep 2018 - 27th Sep 2018 => Aavas Financiers IPO

Bid Details of Rajshree Polypack Limited IPO as on
12-Sep-2018 18:00:01 IST

Category No.of shares offered No. of shares bid
572,000 2,063,000
422,000 5,667,000
985,000 2,873,000
833,000 -
148,000 148,000
2,960,000 10,751,000
QIBs Subscription 3.61X
HNI Subscription 13.43X
Retail Subscription 2.92X
Total Subscription 5.36X

Discussion on Rajshree Polypack Limited IPO:

    Heard before 2 days, a 7 Rs Buyer,, but thereafter no voice.. Hope for a best.. All the best Allottee

    Rajshree IPO 3000 subject 2 started but ask what is the margin before listing because with margin no one to like to sell in sme

    Margin means advance payment of loss we got from buyer to become safe

    Please raise your hand if anybody is applying. We will take the decision accordingly.

    Rajshree Polypack IPO

    a) The Revenue is growing at CAGR of 30% from FY14 to FY18 [Excellent Growth].

    b) The PAT is growing at CAGR of 134% from FY15 to FY18 [Excellent Growth].

    c) The Annualized EPS[ Post Issue] = 8.29

    d) P/E(post issue)= 14.59 [Reasonable Valuation]

    e) P/B(post issue)= 1.57 [Reasonably Valuation]

    g) Mcap/Sales(ideally <2)= 1.214 on FY18 sales [Reasonable priced].

    h) EV/EBITDA(ideally <10)= 7.12 [Reasonable priced].

    i) The Company is generating healthy operational cash flows in the last 4 years which is big positive for the business.[ Big Positive]

    j)The Company has manageable receivables days and excellent EBITDA margins in last 5 years[ Big Positive]

    RAJ POLYPACK LTD.

    Anchor Investor
    ABAKKUS GROWTH FUND 1 ,

    Founder Sunil Singhania is ex CIO Reliance Mutual Fund.

    Rajshree Polypack IPO
    Swiss Partner Wifag Polytype Holding AG presently holds 26.91% and post issue holding will reduce to 19.82%. Wifag is very well-known and pioneers in Poly Printing. Inspite of getting a chance for exit through IPO they did not sell their stake. This shows the creditworthiness and trust towards the Company and their Promoters.

    Abakkus fund has bought 8,33,000 shares in anchor portion.

    Rajshree Polypack:

    (i) Rigid packaging player with expertise in extruded sheets and technoformed products.

    (ii) Top clients include Ferrero (kinder joy – all 3 manufacturers worldwide), Tata Norishco, epigamia, Amul. 50-55% of revenue comthe es from dairy sector for products like curd, lassi Product is half the cost of tetra pack.

    (iii) Management claims to not have many competitors (feedback from client and packaging player is that his quality is good and some high micron products are only manufactured by them). Griener and Mappet are local competitors.

    (iv) Competition are more from imports (China, US). There is an import duty of 10%.

    (v) The Post issue market cap will be 135cr and trades at 10x history pre-issue issue market cap

    Rajshree Polypack.

    Some takeaways:
    1.Young promoters and strong management team
    2.Good set of clients for the packaging products in the food processing industry
    3.Good set of investors in their co at the pre IPO stage
    4.Currently operating at full capacity
    5.IPO proceeds to set up unit which will increase capacity by 40%
    6.As per mgmt, this will become fully operational by Oct 2019
    7.Last 3 years, sales/profits were almost flat as they were operating at full capacity
    8.Raw materials are big part of their cost – 60% odd…they claim to pass on to their clients but ebitda magin has dropped by 4% in the last year… possible margins can get hurt if crude continues to rise
    9.Ban on plastic does not impact them now currently (Only 2%)

    – Earnings growth will happen only after a year or so once new unit is set up


    (i) The state of Maharashtra has on March 23, 2018 notified the Maharashtra Plastic and Thermocol Products (Manufacture, Usage, Sale, Transport, Handling and Storage) Notification, 2018, under which certain plastic products were banned from being manufactured and distributed in the state of Maharashtra.

    (ii) During the Fiscals 2018, 2017 and 2016 the contribution to the net revenue from operations of the Company from the sale of restricted products distributed in the state of Maharashtra was 2.31%, 2.88%, and 1.61% respectively.

    (iii) Although the effect of the said notification has not materially impacted the Company, there can be no assurance that other states will not adopt/implement a similar restriction on manufacturing and distribution of plastic products and/or in the future include other plastic products in the restricted list, which may materially affect the revenue and the results of our operations

    Considering pre ipo placement done at same price gives confidence to apply .
    Business looks good and client list include big names in industry

    The only single drawback is track record of its lead manager earlier issues

    It looks apply for long term. Anyone looking for listing gain only go for it if the subscriptiontion is good.

    The Company makes Thermoformed products used in packaging sodas, water, juices, salad dressings, cooking oil, peanut butter, shampoo, liquid hand soap, mouthwash, pharmaceuticals, even tennis balls from PP. PET and HIPS sheets. Let us see their features and advantages.

    (A) Polypropylene (PP)
    (i) It has established itself as the most important packaging material next to polystyrene.
    (ii) The outstanding characteristics of PP are its high resistance to fat and oil which is why it is the preferred packaging material for dairy. Its imperviousness to water vapor &its excellent frost resistance is a useful benefit especially welcomed for frozen food packaging.

    (B) Polyethylene Terephthalate (PET)
    It is currently the thermoplastic material most in demand in the thermoforming synthetic packaging market. Its outstanding attributes are its excellent transparency equal to that of glass and its brilliancy an additional advantage is its high mechanical strength allowing the production of dimensionally stable rigid packaging with relatively small wall thicknesses and it’s excellent oxygen barrier qualities which makes it suitable for fresh foodstuffs.

    (C) High Impact Polystyrene (HIPS)
    It is a versatile, economical and impact-resistant plastic that is easy to machine and fabricate. HIPS is often specified for low strength structural applications when impact resistance, machinability, and low cost are required

    The Company has an impressive list of clients:
    1. Amul
    2. Mother Diary
    3. Brittania
    4. Kellogs
    5. Tata Tea
    6. Reliance
    7. Vadilal
    8. Creambell
    9. Dairmilk
    10. Nestle and many more.
    The entire list of Clientele can be accessed at http://www.rajshreepolypack.com/clients/

    The company has done preferential allotment of 2,97,939 no. of shares in Pre-IPO placements at Rs.120 on 6th August 2018.

    (i) Sunita Nirmal Chamaria (41,000 Equity Shares).
    (ii) Niraj Nirmalkumar Chamaria (1,25,000 Equity Shares).
    (iii) Kennis Consultancy Private Limited (25,000 Equity Shares).
    (iv) 3i Wealth Advisors LLP (20,000 Equity Shares).
    (v) Abakkus Growth Fund – 1 (86,939 Equity Shares).

    About Abakkus Growth Fund
    (i) Abakkus Asset Management, founded by former Reliance Capital global head of equities Sunil Singhania, has launched its first offering Abakkus Growth Fund and is looking to raise Rs 1,000-1,200 crore from rich investors.

    (ii) Abakkus is an India-focused asset management company Singhania established this year. Abakkus Growth Fund is registered with the Securities and Exchange Board of India as a category-3 AIF and will be long-only in nature, referring to a policy of buying and holding assets and securities.

    Debt Story as on FY18( Pre-Issue)
    (i) Long-term Debt =13.84 Cr
    (ii) Short-Term Debt= 1.01 Cr
    (iii) Shareholder’s Equity= 46.98 Cr
    (iv) D/E= 0.31

    Debt Story as on FY18( Post-Issue)
    (i) Long-term Debt =13.84 Cr
    (ii) Short-Term Debt= 1.01 Cr
    (iii) Shareholder’s Equity= 86.365
    (iv) D/E= 0.17

    Conclusion- The company is Debt free.

    P/E based on FY18 financials( Pre-IPO)
    (i) PAT= 9.31 Cr
    (ii) No. of Shares= 82.74 Lacs
    (iii) EPS= 11.25
    (iv) P/E= 10.75

    P/E based on FY18 financials( Post-IPO)
    (i) PAT= 9.31 Cr
    (ii) No. of Shares= 1.1234 Cr
    (iii) EPS= 8.28
    (iv) P/E= 14.61

    Even track record of LM Prabhudas Liladhar in Mainline ipo is too bad
    1) in 2009,Raj oilmills IPO price 121,current 1 Rs
    2)in 2009,Rishbhdev technocable Price 33, current .30 paisa

    It’s dabut of PL in SME segment,so not exited by looking past history

    First compare it with Peers,and what is it’s P/E standing agaist P/E of industry

    Rajshree Polypack IPO Details
    Issue Open Sep 10, 2018 – Sep 12, 2018
    Issue Type Book Built Issue IPO
    Issue Size 2,960,000 Eq Shares of Rs 10
    (aggregating up to Rs 35.82 Cr)
    Face Value Rs 10 Per Equity Share
    Issue Price Rs 119 – Rs 121 Per Equity Share
    Market Lot 1000 Shares
    Min Order Quantity 1000 Shares
    Listing At NSE SME

    I believe pricing of the issue is little bit on higher size, despite Co is Good