| Price | Lot Size | Issue Date | Issue Size |
|---|---|---|---|
| ₹ 78 to ₹ 83 | 180 | 05th Sep, 2024 – 09th Sep, 2024 | ₹169.65 Cr |
About Shree Tirupati Balajee Agro Trading Co. Ltd IPO
Shree Tirupati Balajee Agro Trading Company Limited, established in October 2001, stands out as a key player in the flexible bulk packaging sector, specializing in Flexible Intermediate Bulk Containers (FIBCs) and related products such as woven sacks and industrial packaging solutions. Serving diverse industries, including chemicals, food, and mining, it provides efficient bulk packaging that simplifies transportation and storage, reducing labor costs. With over 20 years of experience, the company operates five manufacturing units. Units I and II are certified with ISO 9001:2015 and ISO 14001:2018. Unit III is certified with ISO 9001:2015, ISO 45001:2018, ISO 14001:2015, ISO 14064-1:2018, and SEDEX SMETA four-pillar. The company’s certifications cover the production of Flexible Intermediate Bulk Containers (FIBCs), woven sacks, and fabrics of PP (Polypropylene) and HDPE (High-Density Polyethylene). It also manages several subsidiaries, including Honourable Packaging Private Limited (HPPL), Shree Tirupati Balajee FIBC Limited (STBFL), and Jagannath Plastics Private Limited (JPPL), underscoring its extensive reach and production capacity. Offering a wide range of products, including UN-certified bulk bags, thermal insulation bags, and fire retardant bags, the company highlights its ability to cater to varied industry needs. The company’s commitment to quality is evident in its rigorous testing processes and various certifications, while its sustainability efforts are demonstrated by investments in solar power. Financially robust, the company shows significant revenue growth and profitability, supported by a diverse global customer base. Its innovative solutions and adherence to high standards position it as a leading force in the global flexible bulk packaging market.
Objective of the Shree Tirupati Balajee Agro Trading Co. Ltd IPO
The company proposes to utilize the net proceeds towards the funding of the following objects:
- Repayment and/or prepayment, in part or full, of certain of the outstanding borrowings availed by the company;
- Investment in the subsidiaries HPPL, STBFL and JPPL for repayment and/or prepayment, in part or whole, of certain outstanding borrowings availed;
- Funding the incremental working capital requirements of the company;
- Investment in the subsidiaries HPPL, STBFL and JPPL for funding working capital requirements;
- General corporate purposes.
Rationale To Invest In Shree Tirupati Balajee Agro Trading Co. Ltd IPO
Leading player in FIBC packaging and provides cost-effective and environmentally friendly solutions to diversified customer base
Shree Tirupati Balajee Agro Trading Company Limited, a key player in the FIBCs market, offers a diverse range of packaging solutions to a broad customer base and maintains a notable international presence with exports to 38 countries, thereby mitigating the risk of dependence on any single market. The FIBCs, made from lightweight polypropylene, can hold between 500 kg and 2,000 kg, making them suitable for various products such as grains, chemicals, mining materials, and construction materials. The design of these FIBCs not only reduces transportation costs but also simplifies handling with forklifts, providing a more economical and efficient alternative to traditional paper and metal packaging. Due to these advantages, FIBCs are gaining popularity and experiencing growing demand, particularly in the Asia-Pacific region and across industries like food and beverage, chemicals, and pharmaceuticals. As the global market increasingly favors sustainable packaging solutions, the cost-efficiency and environmental benefits of FIBCs continue to drive their adoption and market growth. The company is well-positioned to leverage these market dynamics effectively.
Integrated manufacturing facility and quality control measures offer advantage in the marketplace
The company operates five strategically located manufacturing facilities in Indore, Madhya Pradesh, near major industrial hubs with good connectivity to transport networks. These facilities span 21,613 square meters with an extrusion capacity of approximately 2,300 metric tons per month, and utilize about 2,200 metric tons per month. The company consistently upgrades its infrastructure and technology to enhance productivity and reduce costs. It adheres to stringent quality standards, with certifications including ISO 9001:2015, ISO 22000:2018, ISO 14001:2015, ISO 45001:2018, SEDEX SMETA, and BRCGS. An in-house laboratory supports ongoing testing and quality control, addressing any issues in real time. The company is also focused on innovation, led by a chemical engineer, with ongoing product development and patent pursuits for advanced weaving processes to improve FIBC strength. These integrated manufacturing capabilities and quality measures enable the company to meet market demands with high-quality products at competitive prices.
Valuation of Shree Tirupati Balajee Agro Trading Co. LtdIPO
The FIBC market is set for significant growth, driven by increasing demand across various industries and the expanding e-commerce sector. Since their introduction in India in the early 1990s, FIBCs have become a key export product, with Indian production reaching nearly 65 countries. This growth is supported by strong domestic demand in sectors such as chemicals, food products, construction materials, and agriculture, coupled with favorable government policies like Make-in-India that enhance manufacturing and international trade. Shree Tirupati Balajee Agro Trading Co. Ltd. has established itself as a prominent player in the FIBC and industrial packaging sector, benefiting from substantial market demand and a global footprint. Despite facing risks from regulatory changes affecting plastic use, raw material supply fluctuations, and regional concentration of manufacturing facilities, the company has demonstrated steady financial growth. It reported a revenue CAGR of 10.2%, increasing from Rs. 4,442 million in FY22 to Rs. 5,397 million in FY24. EBITDA margins improved from 7% in FY22 to 11% in FY24, while PAT rose from Rs. 137 million in FY22 to Rs. 361 million in FY24, with an EPS of Rs. 5.7 in FY24. The current issue is priced at a P/E ratio of 14.5x on upper price band based on FY24 earnings, aligning well with its peers. Given the industry’s promising growth trajectory and the company’s strategic focus on capacity optimization, new product development, and expansion in domestic and global presence, we recommend a “SUBSCRIBE” rating for the issue with a medium to long-term investment perspective.
What is the Shree Tirupati Balajee Agro Trading Co. Ltd IPO?
Shree Tirupati Balajee IPO is a book built issue of Rs 169.65 crores. The issue is a combination of fresh issue of 1.48 crore shares aggregating to Rs 122.43 crores and offer for sale of 0.57 crore shares aggregating to Rs 47.23 crores.
How to apply for the Shree Tirupati Balajee Agro Trading Co. Ltd IPO through Stoxbox?
To apply for the Shree Tirupati Balajee Agro Trading Co. Ltd IPO through StoxBox one can apply from the website and also from the app. Click here
When will the Shree Tirupati Balajee Agro Trading Co. Ltd IPO open?
Shree Tirupati Balajee Agro Trading Co. Ltd IPO is opening on 05th September 2024
What is the lot size of the Shree Tirupati Balajee Agro Trading Co. Ltd IPO?
The Lot Size of Shree Tirupati Balajee Agro Trading Co. Ltd IPO is 180 equity shares
When is the Shree Tirupati Balajee Agro Trading Co. Ltd IPO allotment date?
The allotment Date for Shree Tirupati Balajee Agro Trading Co. Ltd IPO is 10th September 2024
When is the Shree Tirupati Balajee Agro Trading Co. Ltd IPO listing date?
The listing Date for Shree Tirupati Balajee Agro Trading Co. Ltd IPO is 12th September 2024
What is the minimum investment required for the Shree Tirupati Balajee Agro Trading Co. Ltd IPO?
In the Retail segment the minimum investment required is Rs. 14,940
What is the maximum investment allowed for the Shree Tirupati Balajee Agro Trading Co. Ltd IPO?
In the Retail segment the maximum investment requirement is Rs. 194,220
What are the risks associated with investing in the Shree Tirupati Balajee Agro Trading Co. Ltd IPO?
- Potential impact of plastic regulations on operations: The company faces potential risks from increasing global efforts to ban plastic products. The company’s primary offerings, such as FIBCs and woven fabrics, rely on polypropylene, a plastic material. The upcoming legislative restrictions, particularly in India and export markets, could adversely affect its revenue and operations. Despite efforts in recycling and emission reduction, these regulations present a significant risk.
- Risks from raw material supply and pricing: The company faces significant risks due to reliance on short-term raw material contracts and exposure to price fluctuations. With no long-term supply agreements, the company is vulnerable to changes in raw material availability and costs, which can impact margins, sales, and operations. Key suppliers contribute a substantial portion of total purchases, adding to the variability in supply and pricing.
- Regional concentration risks: The company’s five manufacturing facilities are all located in Pithampur, Madhya Pradesh, creating a concentration risk. Any significant disruption, such as natural disasters, political instability, or production delays in this region, could severely impact the company’s business, financial condition, and operations.
When will the Shree Tirupati Balajee Agro Trading Co. Ltd IPO shares be credited to my Demat account?
The Shree Tirupati Balajee Agro Trading Co. Ltd IPO be credited to the account on allotment date which is 11th September 2024
Where can I find the Shree Tirupati Balajee Agro Trading Co. Ltd IPO prospectus?
The prospectus of Shree Tirupati Balajee Agro Trading Co. Ltd IPO prospectus can be find on the website of SEBI, NSE and BSE
What are the important dates related to Shree Tirupati Balajee Agro Trading Co. Ltd IPO?
| IPO Open Date | Thursday, September 5, 2024 |
|---|---|
| IPO Close Date | Monday, September 9, 2024 |
| Basis of Allotment | Tuesday, September 10, 2024 |
| Initiation of Refunds | Wednesday, September 11, 2024 |
| Credit of Shares to Demat | Wednesday, September 11, 2024 |
| Listing Date | Thursday, September 12, 2024 |
| Cut-off time for UPI mandate confirmation | 5 PM on September 9, 2024 |
