The Shree Tirupati Balajee Agro IPO is set to be a significant event in the Indian stock market, marking the company’s maiden public offering. This IPO, which aims to raise ₹169.65 crore, is attracting considerable attention from investors. Here’s everything you need to know before subscribing to the Shree Tirupati Balajee Agro IPO.
IPO Timeline and Key Dates
The IPO opens for subscription on September 5, 2024, and closes on September 9, 2024. The anchor book, which allows institutional investors to place bids before the public issue opens, will be launched for a day on September 4, 2024. The finalization of share allotment will take place on September 10, 2024, and the shares will be credited to the demat accounts of successful bidders by September 11, 2024. The listing of shares on the BSE and NSE is expected to happen on September 12, 2024.
Price Band and IPO Size
The Madhya Pradesh-based Shree Tirupati Balajee Agro has set the price band for its IPO at ₹78-83 per share. At the upper end of this price band, the company aims to raise ₹169.65 crore by offering 2.04 crore equity shares. The IPO comprises a fresh issue of 1.47 crore equity shares worth ₹122.42 crore and an offer-for-sale (OFS) of 56.9 lakh equity shares by the promoter, Binod Kumar Agarwal, worth ₹47.23 crore.
Shareholding and Promoter Details
As per the Red Herring Prospectus (RHP) filed with the Securities and Exchange Board of India (SEBI), Shree Tirupati Balajee Agro has a total of 51 shareholders. The promoter, Binod Kumar Agarwal, holds a significant 88.38% stake in the company, while the remaining 11.62% is held by public shareholders. Post-IPO, the promoter’s shareholding is expected to dilute but will still remain substantial.
Objectives of the IPO
The primary objective of the Shree Tirupati Balajee Agro IPO is to utilize the net proceeds from the fresh issue for repaying certain borrowings, funding working capital requirements, and general corporate purposes. Specifically, the company plans to use ₹52.27 crore to repay part of its debt, which stood at ₹245.33 crore on a consolidated basis as of May 2024. Additionally, ₹24.24 crore will be allocated to working capital needs, while the remaining funds will be used for general corporate expenses. The proceeds from the OFS will go directly to the selling shareholder, Binod Kumar Agarwal.
IPO Lot Size and Investor Categories
Retail investors can subscribe to the IPO by bidding for a minimum of 180 equity shares, which would require an investment of ₹14,940 at the upper price band. The maximum investment allowed for retail investors is ₹1,94,220, which corresponds to 13 lots or 2,340 shares. The IPO has been structured with 50% of the issue reserved for qualified institutional buyers (QIBs), 35% for retail investors, and the remaining 15% for non-institutional investors (NIIs).
Company Profile: Business Overview
Shree Tirupati Balajee Agro Trading Company is a prominent manufacturer of flexible intermediate bulk containers (FIBCs), commonly known as large flexible bags, and other industrial packaging products. The company’s products cater to a wide range of industries, including chemicals, agrochemicals, food, mining, waste disposal, agriculture, lubricants, and edible oil. The company operates through its subsidiaries—Honourable Packaging (HPPL), Shree Tirupati Balajee FIBC (STBFL), and Jagannath Plastics (JPPL)—and has five manufacturing units that support its operations.
Financial Performance Highlights
The financial performance of Shree Tirupati Balajee Agro has shown robust growth in recent years. For the fiscal year 2024, the company reported a profit of ₹36.1 crore, marking a significant 74.1% increase compared to the previous fiscal year. This growth was driven by strong operating performance and higher other income. The company’s revenue for FY24 stood at ₹539.7 crore, a 13.5% increase from the previous year. The EBITDA for FY24 was ₹61.9 crore, up 29% year-on-year, with an improved EBITDA margin of 11.47%.
The FIBC segment contributed more than 51% of the total revenue for FY24, while the woven fabrics and narrow fabric business accounted for 21.3%. The woven sacks and tape divisions contributed slightly more than 4% of the total revenue, with other products such as liners, container liners, threads, multi-filament yarns, and filler cords contributing 18.5%.
Comparisons with Listed Peers
Shree Tirupati Balajee Agro’s business model and financial performance can be compared with listed peers such as Commercial Syn Bags, Emmbi Industries, and Rishi Techtex. These companies operate in similar segments and provide a benchmark for evaluating the potential of Shree Tirupati Balajee Agro in the stock market.
Allotment and Listing Process
The basis of allotment will be finalized by September 10, 2024, and investors can check the status on that day. The shares will be credited to the demat accounts by September 11, 2024, and the trading of shares on the BSE and NSE is set to commence on September 12, 2024.
Shree Tirupati Balajee Agro IPO GMP
The grey market premium (GMP) for the Shree Tirupati Balajee Agro IPO is reported to be around 10% over the upper price band. The grey market is an unofficial market where IPO shares are traded before they are officially listed on the stock exchanges. A positive GMP indicates strong investor demand and could signal a successful listing.
Merchant Bankers and Registrar
PNB Investment Services and Unistone Capital are acting as the merchant bankers for the Shree Tirupati Balajee Agro IPO, while Link Intime India is serving as the registrar for the offer.
Investors should carefully consider these key factors before deciding to subscribe to the Shree Tirupati Balajee Agro IPO. With strong financial performance, a clear focus on debt reduction, and a well-established market presence, this IPO offers potential growth opportunities for both short-term gains and long-term investments.
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