Pyramid Technoplast IPO subscribed 69% in first three hours, retail portion sails through

The Rs 153-crore initial public offering (IPO) of Pyramid Technoplast saw a decent response from the investors during the initial three hours of the bidding process on the first day. The issue kicked off for subscription on Friday, August 18.

Pyramid Technoplast is selling its shares in the range of Rs 151-166 apiece during the three-day bidding process and investors can make a bid of a minimum of 90 equity shares and its multiples thereafter.  The company is looking to raise Rs 153.05 crore through its IPO including a fresh equity share sale of Rs 91.30 crore and an offer-for-sale (OFS) of up to 37.20 lakh equity shares.

According to the data, the investors made bids for 52,43,490 equity shares, or 69 times, compared to the 75,60,400 equity shares offered for the subscription by 1.00 pm on Friday, August 18, 2023. The issue closes for subscription on Tuesday, August 22.

The portion of retail investors sailed through with a subscription of 1.02 times, while the allocation for non-institutional bidders fetched 29 per cent bids. The quota for qualified institutional bidders (QIBs) was not even off the mark at the same time.

Incorporated in 1997, Pyramid Technoplast manufactures polymer-based molded products (Polymer Drums) mainly used by chemical, agrochemical, specialty chemical, and pharmaceutical companies for their packaging requirements. Pyramid Technoplast started its commercial production in 1998.

Brokerage firms have a mixed view on the issue as a few suggest to 'subscribe' for aggressive bidders to it, citing its fair pricing, healthy financials, strong customer base and long-term relationships with the customers. On the other hand, a few analysts have suggested to give a skip citing inconsistent debt, high competition and thin margin.

"The company has a diversified customer base along with a comprehensive product portfolio. At the upper price band, the company is valuing at P/E of 16.21 times FY23 earnings with a market cap of Rs 611 crore post issue and return on net worth of 29.61 per cent. We believe that the issue is fairly priced and recommend 'subscribe for long term' rating," said Anand Rathi Shares and Stock Brokers.

Ahead of its IPO, Pyramid Technoplast garnered Rs 27.55 crore through four anchor investors by allocating 16,59,600 equity shares at a price of Rs 166 per share. Carnelian Structural Shift Fund, the Alchemie Ventures Fund, the Pluris Fund, and the Resonance Opportunities Fund participated in the anchor book.

"We believe growth for the industrial packaging players in the IBC segment will be robust over the next 5-6 years, Pyramid Technoplast Limited with its strategic presence in industrial belts in India is perfectly placed to benefit from these developments as the company specialises in making IBCs," said SMIFS Research.

It has recommended a subscribe to the issue, keeping in mind the high growth rates, lower interest costs as debt is repaid, working capital requirement is lower, new capacity goes on-stream and improved utilisation levels of current capacity, which should translate into 15-20 per cent earnings growth over the next 12-18 months.

PNB Investment Services and First Overseas Capital are the book running lead managers to the issue, while Bigshare Services has been appointed as the registrar to the issue. The company will be listed at both BSE and NSE, with August 30, 2023, Wednesday, as the tentative date of listing.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)

 

 

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