IPO listed on 30 Aug'23
Pyramid Technoplast Ltd
Minimum Investment
₹ 14,940 / 90 shares
Grey market premium
₹ 28 (17% premium)
Issue price
₹ 166
Listing price
₹ 187
Listing day %
6%
Listing on
August 29, 2023
Our Verdict:
Neutral
- Although Pyramid Technoplast has shown strong upward trends in both revenue and profit, however, the declining trend in return ratios, modest profit margin, negative cash flow from operating activities and consistent levels of debt can’t be ignored.
- From a valuation standpoint, the IPO seems reasonably priced. If we attribute FY23 earnings to the post-IPO fully diluted paid-up equity capital of the company, then the P/E multiple works out to 19x, which is lower compared to its peers. In addition, the grey market premium (GMP) for the issue, often used as a gauge for investor sentiment, indicates a premium listing.
- However, the company’s fundamentals are not convincing enough for long-term investment yet. Hence, we recommend assessing the company's performance over the next couple of quarters before making any investment commitments.
About the company
Founded in
30 Dec'97
Managing director
Bijaykumar Agarwal
- Pyramid Technoplast specializes in the production of polymer-based molded products, notably Polymer Drums and Intermediate Bulk Containers (IBC). These are predominantly utilized by industries such as chemicals, agrochemicals, specialty chemicals, and pharmaceuticals for their packaging needs.
- The company has 6 manufacturing units, of which 4 are in Bharuch, Gujarat, and 2 in Silvassa, within the Union Territory of Dadra and Nagar Haveli. The Polymer Drum production capacity stands at 20,612 MTPA, while the IBC and MS Drums capacities are 12,820 MTPA and 6,200 MTPA respectively.
STRENGTHS
- Robust Financial Performance: Pyramid Technoplast has experienced a significant revenue increase of 24% CAGR, escalating from Rs 313.50 crore in FY21 to Rs 480.02 crore in FY23. Concurrently, the net profit surged from Rs 16.99 crore to Rs 31.76 crore, marking a CAGR of 37% over the same timeframe.
- Strong return ratios: In FY23, the company posted an impressive Return on Equity at 29.61% and a Return on Capital Employed of 21.37%.
RISK FACTORS
- Elevated debt, subpar margins: Consistent levels of debt coupled with modest profit margins (6.7% in FY23) and instability stemming from the business's reliance on fluctuating crude and steel prices remain a cause of concern.
- Declining trend in RoE: Over the past three years, the Return on Equity has been witnessing a downward trajectory, moving from 34.79% in FY21 to 34.77% in FY22, and then dropping to 29.61% in FY23.
- Negative cash flow: The company had previously experienced negative net cash flow from its operations. Prolonged negative cash flows could significantly hinder its operational capabilities and the execution of growth strategies.
Issue details
Issue type
Mainstream
Issue size
₹ 153.05 crore
Fresh Issue
₹ 91.30 crore
OFS
₹ 61.75 crore
Price range
₹ 151 - 166
Lot size
90 shares
Issue Objective
Net proceeds from the fresh issue will be utilised towards:
- Repayment and/or pre-payment of certain outstanding borrowings availed by the company,
- Funding working capital requirements of the company, and
- General corporate purposes.
Dates
Bidding open
18 Aug'23
Bidding close
22 Aug'23
Allotment date
25 Aug'23
Refund date
28 Aug'23
Listing
30 Aug'23
IPO Reservations
Qualified institutional buyers
<30%
Non-institutional investors
>20%
Retail individual investors
>50%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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