IPOs | Latest IPOs News | Upcoming IPOs | Sah Polymers Limited | IPO advise | IPO call | IPO recommendation | IPO allotment Status| Financials | Shareholding

Industry : PACKAGING

Sah Polymers Limited View all IPOs

Price Band

Rs. 61 to Rs. 65

SAH POLYMERS is going public with a Fresh issue. The issue opens on 30th December 2022.

MOJO CALL

Why

Avoid

MOJO CALL

Avoid

Neutral

Low-margin Business

Sah Polymers is a low-margin packaging business where competition is fierce. Because there are no entry barriers, the company will always have to contend with low RONW.

Poor Financials

The company's revenue for FY 2022 is Rs 81 crore, with a net profit of Rs 4 crore. However, it only made Rs 1 crore in profit in 2021. It is a small company that has yet to demonstrate financial consistency.
Its RONW was poor, at 2% and 6% for FY2020 and FY2021, respectively. It moved up to 16% in FY2022, but it is unclear how long it will be sustainable.

Extremely Rich Valuations

The sector does not enjoy great fancy from investors and yet Sah Polymers wants an extremely rich valuation. Its post-issue market cap (based on the upper price band) would be Rs 167 crore, while its total revenue for FY2022 was a mere Rs 81 crore. This gives a market cap to sales ratio of more than 2x. Other competitors, such as Jumbo Bag, quote a market cap to sales ratio of 0.14x.
Based on the net profit of FY2022, it is asking a P/E of 41.7x, while the peer group is struggling to command even 20 P/E. We will not be surprised if the company performs poorly post the listing.

Issue Details

Issue Opens	30th December 2022
Issue Closes	4th January 2023
Price Band	Rs. 61 to Rs. 65
Issue size (Upper Band)	Rs. 66.30 Cr
Issue Type	FRESH ISSUE
Market cap (based on upper band)	167 Cr
Sales- March 2022 (Rs./Crs)	81
Net Profit - March 2022 (Rs./Crs)	4
Industry	PACKAGING
Promoters	SAT Industries Limited
Lead Manager	Pantomath Capital Advisors

Objective of the Issue

Details

The Objectives of the Offer are to:

1. Setting up a new manufacturing facility to manufacture a new variant of Flexible Intermediate Bulk Containers (FIBC).

2. Repayment of certain secured and unsecured borrowings.

3. Funding the company's working capital requirements.

4. General corporate purposes.

Shareholding Pattern of Sat Investment Private Limited (Promoter)

NAME	Number of Equity Shares	% of Equity Share Capital
M/s. DA Tradetech Private Limited	3,57,000	20%
Shehnaz D Ali	1,34,179	8%
Asad Daud	3,77,635	21%
Lion Houseware Pvt. Ltd.	72,888	4%
Space Age Polymers LLP	7,16,347	40%
Park Continental Private Limited	64,000	4%
S.A. Global Trader LLC	65,869	4%

Business Operations

About Company

Sah Polymers is an ISO-certified company that provides business-to-business manufacturers with customized bulk packaging solutions.

It serves a wide range of industries, including agro pesticides, basic drugs, cement, chemicals, fertilisers, and many more.

The company also manufactures and sells Polypropylene (PP) / High Density Polyethylene (HDPE) FIBC bags, woven sacks, and HDPE/PP woven fabrics.

The company is divided into two business divisions: (1) domestic sales and (2) exports.

In India, the company has a presence in 5 states and 1 union territory, while internationally, the company exports its products to Algeria, Togo, Ghana, Poland, Portugal, France, Italy, USA, Australia, UAE, UK, and Ireland.

The company has one manufacturing facility with an installed production capacity of 3960 m.t. p.a located at Udaipur, Rajasthan.

Segment-wise Revenue
Particulars	Q1 FY 23	FY 22	FY 21	FY 20
Manufacturing Goods	86%	79%	82%	91%
Traded Goods	12%	17%	12%	4%
Sale of Services	1%	3%	4%	2%
Interest Income (Business)	1%	1%	1%	2%
Other Operating Income	-	-	1%	1%

Financials

Financial Overview

In Q1 FY23, the company reported a revenue of Rs. 28 crore and a net profit of Rs. 1 crore.

In FY22, the company reported a revenue of Rs. 81 crore from Rs. 55 crore in FY21, and net profit increased to Rs 4 crore, up from Rs 1 crore in the same period.

In FY22, the company reported a RONW of 16.42%, up from 6.33% in FY21.

Financial Performance (Rs/crore)

(Rs/cr)	Q1 FY23	FY 22	FY 21	FY 20
Sales	28	81	55	50
Net profit	1	4	1	0.3