What You Must Know About Bulkcorp International IPO: Price Band ₹100 to ₹105 Per Share

About Bulkcorp International Ltd

Bulkcorp International Limited, founded in October 2009, provides a variety of customizable packaging solutions, including eight types of FIBC (jumbo) bags and container liners. The company's manufacturing plant is located in Changodar, Ahmedabad, and is well equipped with the necessary machinery and handling equipment to ensure smooth production.

Highlights of Bulkcorp International IPO

Here are some of the highlights of the Bulkcorp International IPO on a segment of the National Stock Exchange (NSE).

•    The subscription for Bulkcorp International issue opens on 30 July 2024 and closes on 1 August 2024.

•    Bulkcorp International is offering ₹10 face value shares. The price for these shares will be between ₹100 - ₹105.

•    Bulkcorp IPO includes a fresh issue of 19.79 lakh shares at ₹105 per share raising ₹20.78 crores with no Offer for Sale.

•    The company has been promoted by Mr. Anup Mahendra Gopalka, Mr. Punit Mahendra Gopalka and Mr. Sanjay Pandurang Sadavarte. Bulkcorp promoter’s ownership will decrease from 98.10% to 72.26% after issuing new shares.

•    The company will use fresh issue funds for general corporate needs, to meet working capital requirements and capital expenditure.

•    Swastika Investmart is the lead manager for Bulkcorp IPO. Kfin Technologies is the registrar and Sunflower Broking is the market maker.

Key Dates of Bulkcorp International IPO

Here are the key dates for the IPO:

Data Source: Company RHP

The IPO for Bulkcorp will be open for subscription from July 30, 2024, to Aug 1, 2024. The allocation of shares to investors will be finalized on 2 Aug 2024. Refunds for unsuccessful applications will be processed on Aug 5, 2024 and shares will be credited to the investor’s demat accounts on 5th Aug. The shares will start trading on the NSE SME Platform on August 6, 2024.

Bulkcorp International Issue Details/ Capital History

Bulkcorp is launching its IPO of 1,978,800 equity shares at ₹100 - ₹105 per share to raise ₹20.78 cr. The issue opens on July 30, 2024, and closes on August 01, 2024, with a minimum application of 1,200 shares. Post allotment, shares will be listed on NSE SME platform. IPO represents 26.33% of the post IPO paid up capital. Proceeds will be used for ₹11.00 crores in working capital, ₹2.18 crores for a captive solar power plant and the remainder for general corporate purposes. Swastika Investmart Ltd. is the lead manager, KFin Technologies Ltd. is the registrar and Sunflower Broking Pvt. Ltd. is the market maker. The company's paid up capital will increase from ₹5.54 crores to ₹7.51 crores post IPO, targeting a market cap of ₹78.90 crores. The promoters initially bought shares at ₹2.04, ₹3.75 and ₹4.38 each, and issued additional shares at ₹285 in February 2024, with a 2 for 1 bonus in March 2024.

IPO Allocation & Minimum Investment Lot Size

Net offer from Bulkcorp International will be distributed among QIBs, retail investors and HNIs / Non-Institutional Investors (NIIs). The breakdown of the overall IPO of Bulkcorp in terms of allocation to various categories are captured below.

Data Source: RHP

Retail investors can participate in the IPO by buying a minimum of 1,200 shares, which requires an investment of ₹126,000. This is also maximum limit for retail investors to apply in Bulkcorp IPO. High Net-Worth Individuals (HNIs) and Non Institutional Investors (NIIs) must invest in at least 2 lots, or 2,400 shares, amounting to a minimum of ₹252,000. Qualified Institutional Buyers and HNIs/NIIs have no upper limit on their investment and can contribute any amount. The table below provides details on the lot sizes for each investor category.

About Bulkcorp International Ltd

Bulkcorp International specializes in customizable packaging solutions, providing a range of FIBC (jumbo) bags and container liners. The company's manufacturing plant is located in Changodar, Ahmedabad and is well equipped with the necessary machinery and handling equipment to ensure smooth production. Recently, Bulkcorp expanded its production capacity by installing new machinery next to its current facility, doubling its capacity from 2,400 MTPA to 4,800 MTPA.

The company caters to key sectors including agriculture, chemicals, construction, food, pharmaceuticals, and mining. Its customer base is international with a presence in countries like the USA, Canada, UK, South Africa, Ivory Coast, South Korea, Spain, Europe and Egypt. Bulkcorp is recognized as a One Star Export House by the Ministry of Commerce and Industry. As of May 31, 2024, the company employs 195 people.

Strength

•    In-house Manufacturing:  It produces 4,800 MTPA of FIBC bags in-house, which helps streamline inventory and production, maintain quality, reduce production time, and save costs.

•    Wide Product Range: The company offers eight types of FIBC bags: 4-loop, Q, UN-certified, ventilated, conductive (Type C), Type D, one-loop and container liners. This variety allows them to meet the needs of key industries like agriculture, chemicals, construction, food, pharmaceuticals and mining.

Risks

•    Reliance on Top Clients: The company gets 92% of its revenue from its top ten customers. Any reduction in business from these clients could harm revenue and profitability.

•    Geographical Concentration and Export Risks: 95% of the company's domestic revenue comes from Gujarat, and 70% of its exports go to the USA. Any negative developments in these regions could adversely impact the business.

•    Ban on Plastic Products: Increased efforts to ban plastic products including in India could affect the company's business if their plastic packaging products are banned.

Financial Highlights: Bulkcorp International Ltd

The table below captures the key financials of Bulkcorp International Ltd for the last 3 completed financial years.

Data Source: RHP

Here are some of the key takeaways from the financials of the company for the last 3 years; i.e., from FY22 to FY24, being the latest year.

•    For the fiscal year 2024, the company's assets increased to ₹3,236.39 lakh from ₹1,765.18 lakh in FY23 and ₹2,177.10 lakh in FY22. Revenue also saw an uptick reaching ₹4,650.45 lakh in FY24 compared to ₹3,895.71 lakh in FY23, though it was slightly lower than ₹4,919.90 lakh in FY22. 

•    Profit after tax rose to ₹355.90 lakh in FY24 up from ₹121.22 lakh in FY23 and ₹172.56 lakh in FY22. The company's net worth improved to ₹934.06 lakh in FY24, nearly doubling from ₹478.16 lakh in FY23 and ₹356.95 lakh in FY22. 

•    Reserves and surplus increased to ₹380.54 lakh in FY24, from ₹297.16 lakh in FY23 and ₹175.95 lakh in FY22. Total borrowing increased to ₹634.23 lakh in FY24, up from ₹542.28 lakh in FY23 and decreased from ₹889.24 lakh in FY22, indicating better financial management and reduced dependency on borrowed funds.