Divyadhan Recycling Industries IPO Price Band: ₹60 to ₹64 per Share

Incorporated in May 2010, Divyadhan Recycling Industries Limited manufactures Recycled Polyester Staple Fibre (R-PSF) and Recycled Pellets. The company is certified for Quality Management System (ISO 14001:2015) and Environmental Management System (ISO 14001:2015) for manufacturing Recycled Polyester Staple Fibre. The Company's manufacturing unit is located in Village Kalyanpur, Tehsil Baddi, Dist Solan Himachal, and has a total capacity of 8030 metric tons per annum for fibre and 4320 metric tons per annum for pellets. As of 31st August 2024, the company had around 83 employees in various departments.

The Objectives of the Issue

Divyadhan Recycling Industries Limited intends to utilize the Net Proceeds from the Issue towards the following objectives:

1. To meet the Capital Expenditure
2. To meet the General Corporate Purposes
3. To meet out the Issue Expenses

Highlights of Divyadhan Recycling Industries IPO

Divyadhan Recycling Industries IPO is set to launch with a book-built issue of ₹24.17 crores. The issue is entirely fresh. Here are the key details of the IPO:

• The IPO opens for subscription on 26th September 2024 and closes on 30th September 2024.
• The allotment is expected to be finalised on 1st October 2024.
• Refunds will be initiated on 3rd October 2024.
• Credit of shares to Demat accounts is also expected on 3rd October 2024.
• The company will tentatively list on NSE SME on 4th October 2024.
• The price band is set at ₹60 to ₹64 per share.
• The fresh issue comprises 37.76 lakh shares, aggregating to ₹24.17 crores.
• The minimum lot size for the application is 2000 shares.
• Retail investors need to invest a minimum of ₹128,000.
• The minimum investment for HNI is 2 lots (4,000 shares), amounting to ₹256,000.
• Narnolia Financial Services Ltd is the book running lead manager for the IPO.
• Skyline Financial Services Private Ltd serves as the registrar.
• Kantilal Chhaganlal Securities is the market maker for the IPO.

Divyadhan Recycling Industries IPO - Key Dates

The cut-off time for UPI mandate confirmation is 5:00 PM on 30th September 2024. This deadline is crucial for investors to ensure their applications are processed successfully. Investors must complete their applications well before this deadline to avoid any last-minute technical issues or delays.

Divyadhan Recycling Industries IPO Issue Details/Capital History

Divyadhan Recycling Industries IPO is scheduled from 26th September to 30th September 2024, with a price band of ₹60 to ₹64 per share and a face value of ₹10. The total issue size is 37,76,000 shares, raising up to ₹24.17 crores through a fresh issue. The IPO will be listed on NSE SME. The pre-issue shareholding is 1,05,30,714 shares.

Divyadhan Recycling Industries IPO Allocation & Minimum Investment Lot Size

The IPO shares are allocated across different investor categories as follows:

Investors can place bids for a minimum of 2000 shares, with additional bids required in multiples of this figure. The table below illustrates the minimum and maximum investment amounts for retail investors and HNIs, expressed in shares and monetary values.

SWOT Analysis: Divyadhan Recycling Industries Ltd

Strengths:

• Established presence in the recycling industry since 2010
• ISO 14001:2015 certified for Quality Management and Environmental Management Systems
• Significant manufacturing capacity for both fibre and pellets

Weaknesses:

• Limited geographical presence with a single manufacturing unit
• Dependence on PET bottles as primary raw material

Opportunities:

• Growing demand for recycled materials in various industries
• Potential for expansion into new geographical markets
• Increasing focus on sustainability and eco-friendly products

Threats:

• Fluctuations in raw material prices (PET bottles)
• Competition from other recycling companies
• Regulatory changes affecting recycling industries

Financial Highlights: Divyadhan Recycling Industries Ltd

Below are the financial results for the Fiscal years FY24, FY23, and FY22:

Divyadhan Recycling Industries Limited has shown steady growth in recent years. The company's revenue increased by 2% and profit after tax (PAT) rose by 10% between the financial year ending on 31st March 2024 and 31st March 2023.

Assets have shown significant growth, increasing from ₹1,767.74 lakhs in FY22 to ₹2,412.11 lakhs in FY24, representing a growth of about 36.5% over two years.

Revenue has remained relatively stable, with a slight decrease from ₹5,981.52 lakhs in FY22 to ₹5,912.88 lakhs in FY24, marking a minor decrease of 1.1% over two years.

The company's profitability has improved significantly. Profit After Tax increased from ₹52.91 lakhs in FY22 to ₹237.8 lakhs in FY24, representing a substantial growth of 349.4% over two years.

Net Worth has shown strong growth, increasing from ₹637.05 lakhs in FY22 to ₹1,291.03 lakhs in FY24, a growth of about 102.7% over two years.

Total Borrowings have decreased from ₹799.76 lakhs in FY22 to ₹606.64 lakhs in FY24, which represents a decrease of about 24.1% over two years. This reduction in borrowings, coupled with increasing profitability, suggests improving financial health.

The company's financial performance shows a trend of stable revenue with significantly improving profitability. The substantial increase in Net Worth and decrease in borrowings indicate a strengthening financial position. Investors should consider these positive trends along with the company's growth strategy and the evolving recycling industry when evaluating the IPO.