IPO: Pyramid Technoplast

In a nutshell Quality : Pyramid Technoplast's three-year average ROE and ROCE are 33.1 and 21.3 per cent, respectively. Growth : Its revenue and net profit grew 23.7 and 36.7 per cent per annum, respectively between FY21 and FY23. Valuation : The stock will trade at a P/E and P/B of 19.2 and 3.1, respectively, which is lower than its peers' median P/E and average P/B, respectively. Overview : The growth in India's manufacturing sector has fuelled the growth of the packaging industry. Consequently, the company has experienced consistent growth over the years. However, changes in regulatory requirements and slowdown in the manufacturing sector can dampen the momentum of the company. About Pyramid Technoplast Pyramid Technoplast is an industrial packaging company incorporated in 1997. It operates a total of six manufacturing units and produces polymer-based moulded products used by chemical, agrochemical, specialty chemical and pharmaceutical companies. It generates the majority of its revenue from polymer drums (a three-year average contribution of about 54 per cent), followed by rigid intermediate bulk containers or IBC (30 per cent), milled steel drums (10 per cent) and the remaining from sale of scraps and raw materials. Strengths of Pyramid Technoplast Enjoys long-term relationships with most of its clients . In each of the last three years, it has received repeat business from more than 376 customers. The strategic location of manufacturing units in Gujarat and the union territory of Dadra allows the company to operate in production hubs. Weaknesses of Pyramid Technoplast Changes in the regulatory environment or quality norms set by the client or government can be highly detrimental to the company's business environment. Pyramid Technoplast has high receivables. Trade receivables as a percentage of total assets averaged 39 per cent over FY21-23. IPO details Total IPO size (₹ cr) 153 Offer for sale (₹ cr) 62 Fresh issue (₹ cr) 91 Price band (₹) 151-166 Subscription dates August 18, 21 and 22, 2023 Purpose of issue To repay debt and fund working capital Post-IPO M-cap (₹ cr) 611 Net worth (₹ cr) 199 Promoter holding (%) 75 Price/earnings ratio (P/E) 19.2 Price/book ratio (P/B) 3.1 Financial history Key financials 2Y growth (% pa) FY23 FY22 FY21 Revenue (₹ cr) 23.7 480 400 314