Subam Papers IPO: Price Band ₹144 to ₹152 Per Share, IPO Opens on 30th Sep 24

Incorporated in October 2006, Subam Papers Limited is a manufacturer of Kraft Paper and paper products. The company uses waste paper as a raw material. As of March 31, 2024, the installed capacity for Kraft Paper was 300 metric tons per day (MTPD), resulting in a total annual capacity of 93,600 tons. The company has received the EN ISO 9001:2015 certificate for the manufacturing and marketing of packaging paper in 2023. As of September 2024, the company had 500 permanent employees.

The Objectives of the Issue

Subam Papers Limited intends to utilise the Net Proceeds from the Issue towards the following objectives:

1. Investment in a Subsidiary for Financing its Capital Expenditure requirements
2. General Corporate Purposes

Highlights of Subam Papers IPO

Subam Papers IPO is set to launch with a book-built issue of ₹93.70 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 BSE SME on 8th October 2024.
• The price band is set at ₹144 to ₹152 per share.
• The fresh issue comprises 61.65 lakh shares, aggregating to ₹93.70 crores.
• The minimum lot size for the application is 800 shares.
• Retail investors need to invest a minimum of ₹121,600.
• The minimum investment for HNI is 2 lots (1,600 shares), amounting to ₹243,200.
• 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.

Subam Papers 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.

Subam Papers IPO Issue Details/Capital History

Subam Papers IPO is scheduled from 30th September to 3rd October 2024, with a price band of ₹144 to ₹152 per share and a face value of ₹10. The total issue size is 61,64,800 shares, raising up to ₹93.70 crores through a fresh issue. The IPO will be listed on BSE SME. The pre-issue shareholding is 1,70,80,070 shares.

Subam Papers 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 800 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: Subam Papers Ltd

Strengths:

• Paper waste recycling and sustainable packaging solutions
• Strategic location near the Thamirabarani River for efficient water distribution
• Use of ERP Technology for inventory control
• Fully automated manufacturing process enhancing productivity
• EN ISO 9001:2015 certified for manufacturing and marketing of packaging paper

Weaknesses:

• Dependence on waste paper as raw material
• Exposure to fluctuations in raw material prices

Opportunities:

• Growing demand for sustainable packaging solutions
• Potential for expansion into new geographical markets
• Increasing focus on recycled paper products

Threats:

• Intense competition in the paper industry
• Environmental regulations affecting paper manufacturing
• Economic slowdowns impacting demand from various industries

Financial Highlights: Subam Papers Ltd

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

Subam Papers Limited has shown mixed financial performance in recent years. The company's revenue decreased by 3% but profit after tax (PAT) rose significantly by 12,574% between the financial year ending with March 31, 2024 and March 31, 2023.

Assets have shown steady growth, increasing from ₹39,418.33 lakhs in FY22 to ₹46,046.1 lakhs in FY24, representing a growth of about 16.8% over two years.

Revenue has fluctuated, rising from ₹33,259.87 lakhs in FY22 to ₹51,062.36 lakhs in FY23, but then decreasing slightly to ₹49,697.31 lakhs in FY24. Despite the recent decrease, this still represents a growth of about 49.4% over two years.

The company's profitability has shown significant volatility. Profit After Tax decreased from ₹2,600.23 lakhs in FY22 to a loss of ₹26.79 lakhs in FY23, but then rebounded strongly to ₹3,341.8 lakhs in FY24.

Net Worth has shown moderate growth, increasing from ₹16,589.11 lakhs in FY22 to ₹19,904.12 lakhs in FY24, a growth of about 20% over two years.

Total Borrowings have increased from ₹15,573.37 lakhs in FY22 to ₹18,340.77 lakhs in FY24, which represents an increase of about 17.8% over two years.

The company's financial performance shows a trend of asset growth and overall revenue increase, with a significant improvement in profitability in the most recent fiscal year. However, the volatility in PAT and the slight decrease in revenue from FY23 to FY24 should be noted. The increase in borrowings is roughly in line with the growth in assets. Investors should consider these trends along with the company's growth strategy and the evolving paper industry when evaluating the IPO.