Sati Poly Plast Limited IPO

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The company, an ISO Certified enterprise, specializes in the manufacturing of flexible packaging materials. These materials serve multifaceted purposes, meeting the packaging needs of various industries. Initially, until 2015, the business was focused on trading flexible packaging materials. However, since 2017, they have transitioned into manufacturing, establishing two key production facilities in Noida, with each having an installed capacity of 540 tonnes per month.

Product Range and Industry Applications

They cater to a wide array of industries, providing packaging solutions for various products within the food and beverage sector. Their offerings include packaging for salty snacks, snack bars, dry fruits, confectionery, and dry foods. They employ a diverse range of industry-approved materials, such as:
i. Polyethylene Terephthalate (PET)                               ii. Biaxially-Oriented Polypropylene (BOPP)
iii. Polythene                                                                        iv. Cast Polypropylene (CPP)
v. Foil                                                                                     vi. Paper
vii. Biodegradable Films

Notable Clients and Product Applications

They are proud to serve prestigious clients including Pidilite, Adani Wilmar, and JVL, tailoring their packaging solutions to their specific needs. Additionally, they have expanded their product offerings to include vacuum bags for cashews, nuts, and pulses.

Vacuum Bags: An Essential Packaging Solution

Vacuum bags are specialized pouches made from materials that can withstand vacuum sealing. These bags are essential for packaging various edible products like nuts and pulses. By removing air from the package, vacuum sealing extends the shelf life and preserves the freshness of the products. This process prevents oxidation and moisture absorption, ensuring the products remain in optimal condition for longer periods, which is particularly beneficial for retail and storage purposes.

Flexible Packaging: Versatility and Sustainability

Flexible packaging materials are non-rigid and include plastics, paper, and aluminum foil, used to create pouches, bags, and other pliable containers. This type of packaging is highly advantageous for industries requiring versatile and adaptive packaging solutions, such as:
i. Food and Beverage: Ensures product freshness and extends shelf life.
ii. Personal Care: Provides protective and appealing packaging for various products.
iii. Pharmaceuticals: Offers secure and barrier-protected packaging for medications.

Flexible packaging is favored for its lightweight nature, ability to conform to product shapes, and barrier properties that protect contents from external factors like moisture and oxygen. Additionally, it is often considered more sustainable than rigid packaging due to its lower resource requirements for production and transportation.

In summary, their company’s commitment to quality, sustainability, and customer satisfaction has positioned them as a leader in the flexible packaging industry, continually evolving to meet the dynamic needs of their clients and the market.

Objects of the Sati Poly Plast Limited IPO:

The Issue Proceeds from the Fresh Issue will be utilized towards the following objects: i. Working Capital Requirements, ii. General Corporate Purposes

Sati Poly Plast Limited IPO Details:

Open Date: Jul 12 2024
Close Date: Jul 16 2024
Total Shares: 1,335,000
Face Value: ₹ 10 Per Equity Share
Issue Size: 17.36 Cr.
Lot Size: 1000 Shares
Issue Price: ₹ 123 - 130 Per Equity Share
Listing At: NSE Emerge
Listing Date: Jul 19 2024

Promoters And Management:

Mr. Balmukund Jhunjhunwala aged 62 years is Promoter-Chairman and Managing Director of the Company. He has played a pivotal role in the establishment of the corporate entity and possesses approximately 6 (Six) years of comprehensive expertise within the packaging industry. He supervised the inception of the Management, Administration, Accounts, strategic planning, and Marketing infrastructures, resulting in substantial growth for the company since its inception. Mr. Aditya Jhunjhunwala aged 36 years is Promoter - Executive Director of the Company. He was acting as Executive Director since his appointment in the company, i.e. February 16, 2010. He has done Master of Business Administration- International Business from Amity University, Noida. He possesses an experience of 6 (Six) years in the area of business expansion, marketing initiatives, identification of viable markets, and strategic planning in packaging industry. Mr. Keshav Jhunjhunwala aged 23 years is Promoter – Non Executive Director of the Company. He is holing degree of Bachelor of Business Administration in Marketing Management form Bharati Vidyapeeth (Deemed to be University), Pune. He is a Bachelor in the field of marketing and has recently commenced engagement with the company.

Financials of Sati Poly Plast Limited IPO:

Particulars ( In Lakhs )
2022
2023
2024
Revenue from Operations 17,516 19,092 17,935
Other Income 6 5 6
Total Revenue 17,522 19,097 17,941
Cost of materials consumed 14,817 16,123 14,493
Changes in inventories 50 -471 12
Employees Benefit Expenses 451 449 395
Other Expenses 1,709 2,132 2,124
EBITDA 494 863 916
OPM (%) 2.82% 4.52% 5.11%
Depreciation & Amortisation 281 269 275
EBIT 214 594 642
Finance Cost 199 200 223
PBT 38 412 434
Tax 10 103 105
PAT 28 309 329
NPM (%) 0.16% 1.62% 1.83%
No.of Shares 49.47 49.47 49.47
EPS 0.57 6.24 6.64

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Sati Poly Plast Limited 179 3 6.64 19.6 130 64
Sabar Flex India Limited 126 4 2.88 8.0 23 35
Uma Converter Limited 181 4 2.07 17.7 36.6 74
* All the data is as per FY24.

Recommendation on Sati Poly Plast Limited IPO:

1. Sati Poly Plast Limited is an ISO Certified Company that specializes in the manufacturing of flexible packaging materials. Initially engaged in trading flexible packaging materials until 2015, the company shifted to manufacturing in 2017. 2. Product Range and Quality Sati Poly Plast Limited offers a diverse range of packaging solutions for various industries, particularly focusing on the food and beverage sector. The product line includes packaging for salty snacks, snack bars, dry fruits, confectionery, and dry foods. The company's products are crafted using industry-approved materials such as polyethylene terephthalate, biaxially-oriented polypropylene, polythene, cast polypropylene, foil, paper, and biodegradable films. 3. Flexible Packaging Flexible packaging, made from materials like plastic, paper, and aluminum foil, offers several advantages including versatility, lightweight nature, and barrier properties that protect contents from external factors. This type of packaging is widely used in the food and beverage, personal care, and pharmaceutical industries. 4. Key Clients and Projects The company supplies packaging materials to prominent clients such as Pidilite, Adani Wilmar, and JVL, among others. Recently, Sati Poly Plast Limited has ventured into vacuum bags for packaging nuts and pulses, further diversifying its product offerings. 5. SWOT Analysis Strengths: i. Flexibility in shape, size, and design. ii. Lightweight, reducing transportation costs and carbon emissions. iii. Suitable for a wide range of products. iv. Durable and resistant to punctures and moisture. v. Excellent barrier properties, extending shelf life. vi. Cost-effective compared to rigid packaging options. Weaknesses: i. May not be suitable for highly fragile products.                 ii. Some pouches lack resealable features. iii. Perceived lower quality in certain luxury markets. Opportunities: i. Potential for sustainability and eco-friendly packaging solutions. ii. Advancements in compostable and biodegradable films. iii. Increasing demand from the e-commerce sector. Threats: i. Regulatory restrictions on packaging materials. ii. High competition leading to price pressure and reduced profit margins. 6. Competition Sati Poly Plast Limited operates in a competitive market with both organized and unorganized players. 7. The Revenue has Increased from Rs.175 Crores in FY22 to Rs.179 Crores in FY24. 8. The EBITDA has Increased from 5 Crores in FY22 to 9 Crores in FY24. 9. The PAT has Increased from 28 Lakhs in FY22 to 3 Crores in FY24. 10. As per FY24, CFO/EBITDA is 1.01, and EPS is 6.64, 11. Market Capitalization is 64 Crores and P/E is 19.6x based on FY24.

Lead Manager of Sati Poly Plast Limited IPO:

  1. Beeline Broking Limited

Registrar of Sati Poly Plast Limited IPO:

  1. Link Intime India Private Limited

Company Address:

Sati Poly Plast Limited D.N. Singh Road Bhagalpur 812 002 Phone: +91 98181 04164 Email: satipolyplast1@gmail.com Website: https://www.satipolyplast.in/

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