Paramount Dye Tec IPO: Price Band ₹111 to ₹117 Per Share; Know the Key Details!

Founded in January 2014, Paramount Dye Tec Limited produces yarns by recycling waste synthetic fiber, catering to the B2B segment of the textile industry. The company offers a range of products, including synthetic fiber and yarns such as acrylic, polyester, nylon, wool, hand-knitting, and acrylic blend yarns. Paramount Dye Tec has two manufacturing facilities situated in Village Mangarh and Village Koom Khurd, Punjab. The company is ISO 9001:2015 and Good Manufacturing Practice (GMP) certified for its robust Quality Management System.

The Objectives of the Issue

Paramount Dye Tec Limited intends to utilise the Net Proceeds from the Issue towards the following objectives:

1. Setting up of Manufacturing Unit
2. Repayment/Prepayment of Certain Debt Facilities availed by the Company
3. Expenses towards Registration of Land purchased from Promoter
4. General Corporate Purposes

Highlights of Paramount Dye Tec IPO

Paramount Dye Tec IPO is set to launch with a book-built issue of ₹28.43 crores. The issue is entirely fresh. Here are the key details of the IPO:

• The IPO opens for subscription on 30th September 2024 and closes on 3rd October 2024.
• The allotment is expected to be finalised on 4th October 2024.
• Refunds will be initiated on 7th October 2024.
• Credit of shares to Demat accounts is also expected on 7th October 2024.
• The company will tentatively list on NSE SME on 8th October 2024.
• The price band is set at ₹111 to ₹117 per share.
• The fresh issue comprises 24.3 lakh shares, aggregating to ₹28.43 crores.
• The minimum lot size for the application is 1200 shares.
• Retail investors need to invest a minimum of ₹140,400.
• The minimum investment for HNI is 2 lots (2,400 shares), amounting to ₹280,800.
• Gretex Corporate Services Limited is the book running lead manager for the IPO.
• Bigshare Services Pvt Ltd serves as the registrar.
• Gretex Share Broking is the market maker for the IPO.

Paramount Dye Tec IPO - Key Dates

The cut-off time for UPI mandate confirmation is 5:00 PM on 3rd October 2024. This deadline is crucial for investors to ensure their applications are processed successfully. Investors are advised to complete their applications well before this deadline to avoid any last-minute technical issues or delays.

Paramount Dye Tec IPO Issue Details/Capital History

Paramount Dye Tec IPO is scheduled from 30th September to 3rd October 2024, with a price band of ₹111 to ₹117 per share and a face value of ₹10. The total issue size is 24,30,000 shares, raising up to ₹28.43 crores through a fresh issue. The IPO will be listed on NSE SME. The pre-issue shareholding is 45,12,651 shares.

Paramount Dye Tec 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 1200 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: Paramount Dye Tec Ltd

Strengths:

• Utilization of recycled synthetic waste as raw material
• Cost benefits compared to competitors
• Custom yarn solutions for customers
• ISO 9001:2015 and Good Manufacturing Process (GMP) certified
• Complete solution offering both fiber and yarn production

Weaknesses:

• Dependence on B2B segment of the textile industry
• Limited geographical presence with manufacturing facilities in Punjab

Opportunities:

• Expanding spinning capacity to boost profitability
• Growing demand for recycled and sustainable textile products
• Potential for geographical expansion

Threats:

• Fluctuations in raw material availability and prices
• Intense competition in the textile industry
• Regulatory changes affecting recycling and manufacturing processes

Financial Highlights: Paramount Dye Tec Ltd

Below are the financial results for the recent periods:

Paramount Dye Tec Limited has shown significant growth and transformation from a partnership firm to a company. Here's an analysis of the key financial metrics:

Partnership Firm Period (FY21 to FY23):

Assets grew steadily from ₹941.64 lakhs in FY21 to ₹1,829.84 lakhs in FY23, a growth of 94.3% over two years.
Revenue showed significant growth, increasing from ₹1,690.5 lakhs in FY21 to ₹4,600.23 lakhs in FY23, a 172% increase.

Profit After Tax improved dramatically, from ₹15.94 lakhs in FY21 and FY22 to ₹316.14 lakhs in FY23.
Net Worth more than doubled from ₹237.48 lakhs in FY21 to ₹553.77 lakhs in FY23.
Total Borrowings increased from ₹551.5 lakhs in FY21 to ₹969.18 lakhs in FY23, reflecting the firm's growth.

Company Period (31st Jan 2024 to 31st Mar 2024):

The transition to a company structure shows a significant increase in assets, from ₹3,490.07 lakhs on 3st Jan 2024 to ₹5,549.65 lakhs on 31st Mar 2024.

Revenue for the two-month period from 31st Jan 2024 to 31st Mar 2024 was ₹2,367.9 lakhs, indicating strong performance in a short timeframe.

Profit After Tax for the same two-month period was ₹354.09 lakhs, higher than the entire FY23 as a partnership.
Net Worth increased substantially to ₹3,032.06 lakhs by 31st Mar 2024, with Reserves and Surplus of ₹3,029.81 lakhs.
Total Borrowings decreased from ₹2,247.76 lakhs on 31st Jan 2024 to ₹1,627.37 lakhs on 31st Mar 2024, possibly due to debt repayment or restructuring.

The transition from a partnership firm to a company structure appears to have been accompanied by significant growth and financial strengthening. The company has shown substantial improvements in assets, profitability, and net worth in a short period after incorporation. However, it's important to note that the company period data represents only two months of operation, and longer-term performance as a company will be crucial for investors to consider.

The increase in assets and net worth, coupled with strong revenue and profitability in the short company period, suggests that the business has entered a rapid growth phase. However, investors should also consider the increased borrowings and how they align with the company's growth strategy and capital structure plans.