What You Must Know About Ideal Technoplast Industries IPO: Price ₹121 per share

About Ideal Technoplast Industries IPO

Ideal Technoplast Industries Limited, a rigid plastic packaging producer, was founded in 2012 and sells its goods to domestic and foreign markets (via third parties and export companies).

For the paint, agro, chemical, cosmetic, adhesive, lubricant, food, and edible oil industries, Ideal Technoplast provides industrial packaging solutions, including round and square containers, twist containers, and bottles.

The business uses cutting-edge manufacturing technologies, such as internal printing and design capabilities. The 20,000-square-foot, multi-story production facility in Surat features cutting-edge technology, including a completely automated line. As of March 31, 2024, the company will have 28 workers.

The Objective of the IPO

• To Meet Capital Expenditure: Ideal Technoplast Industries aims to allocate a portion of the IPO proceeds towards significant capital expenditure, ensuring the company is well-equipped to enhance its production capabilities, upgrade machinery, and invest in advanced technology. This strategic investment is crucial for sustaining growth and maintaining a competitive edge in the market.
• General Corporate Purpose: The company intends to use part of the IPO proceeds for general corporate purposes, including strengthening the business's overall financial health. This may involve repaying debts, improving working capital, or supporting day-to-day operations, ultimately ensuring the company's long-term stability and operational efficiency.
• Business Expansion: The IPO proceeds will also fund Ideal Technoplast Industries' strategic expansion, which will focus on entering new markets, increasing product lines, and enhancing distribution networks. This objective is essential for driving future growth and positioning the company as a leader in the industry.
   

Highlights of Ideal Technoplast Industries IPO

Ideal Technoplast Industries IPO is set to launch with a fixed price issue of ₹16.03 crores. The issue comprises a fresh issue of 13.25 lakh shares with no offer-for-sale component. Here are the key details of the IPO:

• The IPO opens for subscription on August 21, 2024, and closes on August 23, 2024.
• The allotment is expected to be finalised on Monday, August 26, 2024.
• Refunds will be initiated on Tuesday, August 27, 2024.
• Credit shares to Demat accounts are also expected on Tuesday, August 27, 2024.
• The company will tentatively list on BSE SME on Wednesday, August 28, 2024.
• The price is fixed at ₹121 per share.
• The lowest lot size for the IPO application is 1000 shares.
• Retail investors need to invest a minimum of ₹121,000.
• The minimum investment for High-Net-Worth Individuals (HNIs) is 2 lots (2,000 shares), amounting to ₹242,000.
• Swastika Investment Limited is the book-running lead manager for the IPO.
• Bigshare Services Private Ltd serves as the registrar.

Ideal Technoplast Industries IPO - Key Dates

The timeline for the Ideal Technoplast Industries IPO is as follows:

Ideal Technoplast Industries IPO opens on August 21, 2024, and closes on August 23, 2024

Ideal Technoplast Industries IPO Details/Capital History

A minimum of 1000 shares, as well as multiples of that number, are up for bid. The minimum and maximum share and amount of investments made by HNIs and retail investors are shown in the table below.

Ideal Technoplast Industries Allocation & Minimum Investment Lot Size

The IPO shares of the company are distributed as follows:

Investors can place bids in multiples of 1,600 shares. The table below shows the minimum and maximum number of shares and the amounts invested by both retail investors and high-net-worth individuals (HNIs).

SWOT Analysis: Ideal Technoplast Industries IPO

Strengths

• Established reputation in the plastic manufacturing industry.
• Diverse product portfolio catering to multiple industries, reducing dependence on a single sector.
• Strong R&D capabilities leading to innovative product offerings.
• The strategic location of manufacturing units, reducing logistics costs.
• Experienced management team with deep industry knowledge

Weaknesses

• High dependence on raw material prices can affect profit margins.
• Limited global presence, with most revenue generated from domestic markets.
• Heavy reliance on a few key clients, leading to potential revenue fluctuations.
• The capital-intensive nature of the business requires continuous investments

Opportunities

• Growing demand for plastic products in various automotive, packaging, and construction sectors.
• Expansion into international markets, leveraging existing capabilities.
• The focus on sustainable and recyclable plastics is increasing, and new product lines are opening.
• Government initiatives promoting manufacturing and exports could benefit the company

Threats

• Fluctuations in raw material prices, particularly petroleum-based products.
• Stringent environmental regulations could increase compliance costs.
• Intense competition from both domestic and international players.
• Economic downturns or changes in consumer behaviour could impact demand

Financial Highlights: Ideal Technoplast Industries IPO

Ideal Technoplast Industries Limited has exhibited notable financial growth and transformation over the past four fiscal years. The company's assets have experienced a remarkable increase, rising from ₹300.86 lakhs in FY21 to ₹1,508.51 lakhs as of February 2024. This significant asset growth indicates the company’s aggressive expansion and investment strategies aimed at scaling operations.

However, the revenue trend paints a more complex picture. After a steady increase from ₹569.47 lakhs in FY21 to ₹1,199.79 lakhs in FY23, there is a noticeable decline to ₹910.91 lakhs by February 2024. This dip suggests potential market challenges or strategic shifts that have impacted revenue generation during the latest period.

Despite revenue fluctuations, the Profit After Tax (PAT) has shown substantial improvement, escalating from ₹9.82 lakhs in FY21 to ₹135.4 lakhs by February 2024. This indicates enhanced profitability and better cost management over the years. Ideal Technoplast Industries' net worth has also seen a dramatic increase, growing from ₹127.45 lakhs in FY21 to ₹743.07 lakhs as of February 2024, highlighting a strengthened financial position.

The reserves and surplus have turned positive, moving from a deficit of ₹12.19 lakhs in FY21 to ₹375.57 lakhs by February 2024, reflecting accumulated earnings and financial health. Meanwhile, the company’s borrowing peaked at ₹586.04 lakhs in FY23 but decreased to ₹456.89 lakhs by February 2024, indicating a strategic reduction in debt while maintaining financial growth.