IPO listed on 12 Sep'24
Shree Tirupati Balajee Agro Trading Company Ltd
Minimum Investment
₹ 14,940 / 180 shares
Grey market premium
₹ 35 (42% premium)
Issue price
₹ 83
Listing price
₹ 90
Listing day %
14%
Listing on
Sept 12, 2024
Our Verdict:
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- Shree Tirupati Balajee Agro Trading Company (Shree Tirupati), established in 2001, is a packaging solutions provider that primarily manufactures bulk bags in India. Its profits have been increasing continuously with robust topline and operating figures.
- The IPO is priced at a price-to-earnings (P/E) ratio of 14.4x based on FY24 earnings, which is lower than the industry average. The positive grey market premium also suggests a strong debut in the market.
- Given the firm's solid financials, potential for growth and attractive valuation, investors might consider subscribing to the IPO from a medium-to-long term perspective.
About the company
Founded in
23 Oct'01
Managing director
Binod Kumar Agarwal
- Shree Tirupati manufactures and sells Flexible Intermediate Bulk Containers (FIBCs) and other packaging products such as woven sacks and fabrics, targeting both domestic and international markets. They provide customized packaging solutions that streamline the loading and unloading process, reducing labor costs for industries like chemicals, agriculture, and food mining.
- The firm operates 5 manufacturing facilities in Madhya Pradesh, with an installed capacity of 2,300 MT/ month. It exports to 38 countries and distributes its products across India.
STRENGTHS
- Impressive Growth Trajectory: Shree Tirupati has shown robust financial growth with its operating revenue and EBITDA experiencing compound annual growth rates (CAGRs) of 10% and 36% respectively, from FY22 to FY24. Its net profit has also seen a remarkable increase, growing at a CAGR of 63% during the same period.
- Improving Profit Margins: The profit after tax (PAT) margins have progressively improved, climbing from 3.01% in FY22 to 6.53% in FY24. Similarly, the EBITDA margin has followed an upward trajectory, growing from 8.93% to 13.58% during the same timeframe.
- Healthy Return Metrics: As of FY24, the Return on Equity (RoE) stood at 20.84% while the Return on Capital Employed (RoCE) was 16.29%.
RISK FACTORS
- Client Concentration: As of FY24, the firm’s top 1, 5, and 10 customers contributed to 10%, 32%, and 46% of total sales, respectively. Losing any significant clients or experiencing a decrease in their orders could significantly affect its profitability.
- Cash Flow Concerns: The firm has experienced negative cash flows from operating, investing, and financing activities in recent years. Persistent negative cash flow may adversely affect its growth and overall business stability.
- Competitive Landscape: The firm faces competition from both large, established entities and smaller local companies. Within its market segment in India, it competes with numerous listed enterprises of similar size and product focus, alongside private businesses like Kanpur Plastipack, Rishi Techtex, Jumbo Bag, EMMBI Industries, and Commercial Syn Bags.
- Operational Risks: The firm’s operations could be adversely affected by risks such as fluctuations in foreign exchange rates during the importation of polymers, potential increases in raw material prices, supply shortages, and cost overruns.
Issue details
Issue type
Mainstream
Issue size
₹ 169.65 Crore
Fresh Issue
₹ 122.43 Crore
OFS
₹ 47.23 Crore
Price range
₹ 78 - 83
Lot size
180 shares
Issue Objective
The net proceeds from the fresh issue are intended to be utilised towards:
- Prepaying or repaying certain outstanding debts of the company and its subsidiaries;
- Providing for the incremental working capital needs of the company;
- Investing in subsidiaries to meet their working capital requirements; and
- General corporate purposes.
Dates
Bidding open
5 Sep'24
Bidding close
9 Sep'24
Allotment date
10 Sep'24
Refund date
11 Sep'24
Listing
12 Sep'24
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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