Pyramid Technoplast IPO Review: Key Insights for Investors

Introduction: Pyramid Technoplast Limited is set to launch its Initial Public Offering (IPO), with the subscription period running from August 18, 2023, to August 22, 2023. In this comprehensive review, we will delve into the strengths and weaknesses of the Pyramid Technoplast IPO for potential investors.

Pyramid Technoplast IPO – About The Company

Established in 1997, Pyramid Technoplast Limited specializes in manufacturing polymer-based molded products, primarily used for packaging by agrochemical, chemical, specialty chemical, and pharmaceutical companies. The company’s product portfolio includes polymer-based bulk packaging drums, Intermediate Bulk Containers (IBC), and MS Drums designed for chemical, agrochemical, and specialty chemical packaging and transportation.

Manufacturing Units: Pyramid Technoplast operates six strategically located manufacturing units, with four situated in Bharuch, GIDC, Gujarat, and two in Silvassa, UT of Dadra and Nagar Haveli. A seventh manufacturing unit is under development in Bharuch, Gujarat.

Production Capacities:

• Polymer Drum Manufacturing: 20,612 MTPA
• IBC Manufacturing: 12,820 MTPA
• MS Drum Manufacturing: 6,200 MTPA

To ensure a robust supply chain, the company has cultivated long-term relationships with domestic and international distributors and vendors.

Pyramid Technoplast IPO Review – Industry Overview

IBC Industry

The demand for Intermediate Bulk Containers (IBCs) in India is expected to soar, driven by growth in sectors such as chemicals, pharmaceuticals, and food and beverage. India’s chemical industry, which produces a vast array of commercial goods, is expanding rapidly, further boosting the need for IBCs.

Polymer Drums & HM-HDPE Industry

Polymer drums are vital for transporting chemicals and are widely used in industrial shipping. These drums can safely transport a wide range of products, from food to chemicals and pharmaceuticals. Increased freight transportation for diverse products positively impacts the demand for polymer drums and HM-HDPE (High Molecular Weight High-Density Polyethylene).

MS-Drums Industry

Mild steel drums (MS-Drums) are popular in the packaging industry due to their recyclability, durability, and sustainability. They find use in various industries, including food, coatings, construction, and healthcare. Growth in the food and beverage sector, coupled with packaging innovations, is expected to drive MS-Drum consumption.

Pyramid Technoplast IPO Review – Financial Highlights

• Asset Growth: Total assets increased from ₹153.46 crores in March 2021 to ₹225.78 crores in March 2023.
• Revenue Growth: Revenues grew from ₹316.18 crores in March 2021 to ₹482.03 crores in March 2023.
• Profit Growth: Profits surged from ₹16.99 crores in March 2021 to ₹31.76 crores in March 2023.
• Profit Margins: Net profit margins improved from 5.42% in FY21 to 6.62% in FY23.
• Debt Management: Net debt was reduced to ₹49.55 crores in FY23.
• Return Ratios: ROE stood at 29.61%, while ROCE was 21.37% in FY23.

!Certainly, here’s the balance sheet information for Pyramid Technoplast Limited arranged in a tabular manner:

Balance Sheet of Pyramid Technoplast Limited (Figures in Crores)

This table provides a clear presentation of the balance sheet with liabilities on the left and assets on the right, along with their respective amounts in crores.

Pyramid Technoplast IPO Review – Competitors

Here’s a comparison of accounting ratios between Pyramid Technoplast Limited and its listed industry peers:

Certainly, here’s the key IPO information for the Pyramid Technoplast IPO presented in a table format:

This table provides a clear summary of the key details related to the Pyramid Technoplast IPO.

Strengths of the Company

• Diverse Customer Base: The company has served over 376 customers across various industries, including chemicals, agrochemicals, pharmaceuticals, lubricants, and edible oil.
• Comprehensive Packaging Solutions: Pyramid Technoplast offers complete bulk industrial packaging solutions by manufacturing polymer-based bulk packaging drums, IBCs, and MS Drums.
• Strategic Locations: With manufacturing units strategically located near key industrial sectors, the company enjoys easy access to its target industries.
• Stringent Quality Control: The company subjects its products to extensive quality checks, ensuring they meet industry standards for safety, durability, and environmental impact.

Weaknesses of the Company

• Compliance Dependencies: Adherence to government policies, international standards, and customer quality norms is crucial. Any failure to comply could impact business growth.
• Unsecured Loans: The company availed unsecured loans in FY23, and repayment obligations could strain operating cash.
• Polymer Price Volatility: A significant portion of expenses is attributed to polymer materials, which are petroleum-derived. Price fluctuations or supply shortages can affect profitability.
• Lack of Long-Term Agreements: The absence of long-term agreements with customers and suppliers introduces uncertainty in demand and raw material supply.
• Legal Proceedings: Pending legal proceedings can potentially harm the company’s reputation and operations.

Pyramid Technoplast IPO – Key IPO Information

• IPO Size: ₹153.05 Cr
• Fresh Issue: ₹91.30 Cr
• Offer for Sale (OFS): ₹61.75 Cr
• Opening Date: August 18, 2023
• Closing Date: August 22, 2023
• Face Value: ₹10 per share
• Price Band: ₹151 to ₹166 per share
• Lot Size: 90 Shares
• Listing Date: August 30, 2023

Promoters: Bijaykumar Agarwal, Jaiprakash Agarwal, Yash Synthetics Private Limited, Credence Financial Consultancy Llp, Pushpa Devi Agarwal, and Madhu Agarwal

Book Running Lead Managers: PNB Investment Services Limited and First Overseas Capital Limited

Registrar to the Offer: Bigshare Services Private Limited

Pyramid Technoplast IPO Review – GMP

The Grey Market Premium (GMP) for this IPO is currently unavailable. We will update this information as it becomes available.

In Closing

Analysts remain divided on the Pyramid Technoplast IPO and its potential gains. For investors, this is an opportunity to carefully analyze the company’s strengths and weaknesses. Your decision to participate in this IPO should align with your investment goals and risk tolerance.

Are you considering investing in this IPO? Share your thoughts in the comments below.