Shree Tirupati Balajee Agro IPO subscribed over 18x on day 2, NII portion booked highest; Latest GMP here

Shree Tirupati Balajee Agro IPO: The initial public offering (IPO) of Shree Tirupati Balajee Agro Trading Company Limite was subscribed over 18 times on the second day of its issue. The mainboard IPO of the leading domestic flexible intermediate bulk container (FIBC) manufacturer opened for subscription on Thursday, September 5, and will close on Monday, September 9.

Shree Tirupati Balajee Agro Trading IPO offers 20,440,000 equity shares as part of the public issue. The company has reserved not more than 50 per cent of the shares for qualified institutional buyers (QIB), not less than 15 per cent for non-institutional Institutional Investors (NII), and not less than 35 per cent of the offer is reserved for retail investors.

Also Read: Shree Tirupati Balajee Agro IPO today: 10 key risks you need to be aware of before investing in ₹170 crore issue

Shree Tirupati Balajee Agro IPO Subscription Status

On the second day of issue, Shree Tirupati Balajee Agro IPO was subscribed 18.17 times. The portion reserved for retail investors was booked 21.42 times, the portion reserved for NIIs was booked 28.56 times, and the portion reserved for QIBs was booked 4.69 times. The IPO received 25,99,94,520 share applications against 1,43,08,000 shares offered on Friday.

On the first day of issue, Shree Tirupati Balajee Agro IPO was subscribed 6.36 times. The portion reserved for retail investors was booked 7.93 times, the portion reserved for NIIs was booked 5.25 times, and the portion reserved for QIBs was booked 4.46 times. The IPO received 9,10,26,900 share applications against 1,43,08,000 shares offered on Thursday.

Shree Tirupati Balajee Agro IPO Details

Shree Tirupati Balajee IPO, worth ₹170 crore, comprises a fresh issue of 1,47,50,000 equity shares and an offer-for-sale (OFS) of 56,90,000 equity shares by the promoter. Binod Kumar Agarwal is the company's promoter. The price band has been fixed at ₹78 to ₹83 per equity share with a face value of ₹10.

Also Read: Shree Tirupati Balajee Agro Trading IPO announces price band at ₹78- ₹83 apiece

The floor price is 7.8 times, and the cap price is 8.3 times the face value of the equity shares. The upper end of the price band is 14.46 times, compared to the average industry peer group PE ratio of 30.74 times. The Shree Tirupati Balajee IPO lot size is 180 equity shares, and thereafter, it will be in multiples of 180 equity shares.

The Shree Tirupati Balajee IPO's book-running lead managers are PNB Investment Services Ltd and Unistone Capital Pvt Ltd, while the registrar is Link Intime India Private Ltd.

The company plans to use the net proceeds of the new offering to fund the additional working capital needs, general corporate purposes, and the repayment and/or prepayment, in full or in part, of some of the outstanding borrowings obtained by the company. They also plan to invest in their subsidiaries for these purposes.

Also Read: Shree Tirupati Balajee Agro Trading mobilises ₹50.89 crore ahead of IPO

The basis of the share allotment will be finalised on Tuesday, September 10. The company will initiate refunds on Wednesday, September 11. The shares will be credited to the Demat account of allottees on the same day following the refund. Shree Tirupati Balajee's share price will likely be listed on BSE and NSE on Thursday, September 12.

Shree Tirupati Balajee Agro Company Details

The firm manufactures and sells Flexible Intermediate Bulk Containers (FIBCs), often known as huge flexible bags, as well as other industrial packaging materials such as tapes, woven sacks, woven fabric, and thin fabric for both the domestic and international markets in India. 

By providing their FIBC products for transportation and packaging needs, the company offers customized products and meets the bulk packaging needs of its clients from various industries, including chemicals, agrochemicals, food mining, waste disposal, agriculture, lubricants, and edible oil.

The company has been operational for 20 years and has five manufacturing units. It conducts its business through its subsidiaries, Honourable Packaging Private Limited (HPPL), Shree Tirupati Balajee FIBC Limited (STBFL), and Jagannath Plastics Private Limited (JPPL).

The company's listed peers are Commercial Syn Bags Ltd (with a P/E of 37.13), Emmbi Industries Ltd (with a P/E of 22.07), and Rishi Techtex Ltd (with a P/E of 33.01). Between March 31, 2024, and March 31, 2023, Shree Tirupati Balajee Agro Trading Company Limited's profit after tax (PAT) climbed by 74 per cent and its revenue by 16 per cent.

Also Read: Shree Tirupati Balajee IPO: GMP, subscription status, review, other details. Good or bad for investors?

Shree Tirupati Balajee Agro IPO GMP Today

Shree Tirupati Balajee Agro IPO GMP or grey market premium was ₹40. This indicates that Shree Tirupati Balajee Agro's share price was trading at a premium of ₹40 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Shree Tirupati Balajee Agro was indicated at ₹123 apiece, which is 48.19 per cent higher than the IPO price of ₹83. 'Grey market premium' indicates investors' readiness to pay more than the issue price.

Shree Tirupati Balajee Agro IPO Review

According to domestic brokerage Master Capital Services, Shree Tirupati Balajee Agro has had growing demand, especially from the chemicals, construction, and food agriculture sectors. This has helped the FIBC sector reach healthy capacity utilization levels, leading players to expand capacity.

Also Read: Shree Tirupati Balajee Agro Trading IPO: From financials to GMP, here are 10 things to know before subscribing

Further, the FIBC industry grew at a CAGR of 1.8 per cent during 2020-2023, owing to continuous innovations and process improvement across the value chain and steady traction due to continuous improvement in product quality. The company plans to exploit this by focusing on its core competencies and maximizing its capacity. 

‘’It also intends to develop a new product line following the market trends, using its vast product portfolio, and enhancing its technological capabilities to create a global and domestic presence. Investors looking to invest can invest in the IPO for the medium to long,'' said Master Capital Services on Shree Tirupati Balajee Agro IPO.
 

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.