Pentagon Rubber IPO to open on June 26; check price band & other details

The initial public offering (IPO) of Pentagon Rubber will kick for subscription on Monday, June 26, as the company is eyeing to mop-up Rs 16.17 crore via its primary stake sale. The issue is open for subscription till Friday, June 30. The issue consists entirely of 23.10 lakh fresh equity shares with a face value of Rs 10 each, aggregating to Rs 16.17 crore.

Pentagon Rubber has fixed the price band in the range of Rs 65-70 apiece with a lot size of 2,000 equity shares. Each lot will cost Rs 1.4 lakh to the investors. Retail bidders can bid for only one lot, while HNI investors need to bid for a minimum of two lots or 4,000 equity shares.

The net proceeds from the public offering will be utilized to meet the working capital requirements, general corporate purpose and issue expenses. According to RHP, utilization of IPO proceeds will help the company to increase its turnover by 55-60 per cent.

Incorporated in 2004, Pentagon Rubber manufactures rubber conveyor belts, transmission belts, rubber sheets and elevator belts. The manufacturing unit of the company is located in Dera Bassi, Punjab.  The production capacity of the manufacturing unit is over 300 sq km of conveyor rubber belts per year.

The company has reserved 1.15 lakh equity shares for the market maker of the issue, which is Sunflower Broking. Not more than 10.94 lakh equity shares, or 50 per cent of the net offer is reserved for qualified institutional buyers (QIBs). 3.3 lakh shares, or 15 per cent, have been reserved for HNIs, while retail investors will get the remaining 7.65 lakh share, or 35 per cent, of the issue.

For the year ended March 31, 2023, Pentagon Rubber’s total revenues stood at Rs. 35.12 crore, with an EBITDA standing at Rs 4.29 crore and net profit at Rs. 3.09 crore. The company reported total revenues of Rs 29.96 crore for the nine months ended December 31, 2022, with a net profit at Rs 2.16 crore.

Beeline Capital Advisors is the book-running lead manager to the issue, and Link Intime India has been appointed as the registrar. The issue is an SME IPO and will be listed at the emerge platform of the National Stock Exchange (NSE) on July 10, 2023.

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