Sah Polymers debuts on strong note; lists at 31% premium to issue price

Post listing, the stock hit a high of Rs 89.25, up 37 per cent when compared with its issue price of Rs 65 per share.

Sah Polymers made a strong debut, with shares of the packaging company listed at Rs 85, a 31 per cent premium over its issue price of Rs 65 per share on the NSE and the BSE on Thursday.

Post listing, the stock hit a high of Rs 89.25, up 37 per cent when compared with its issue price. At 10:59 AM, the stock traded at Rs 88.95, as compared to 0.42 per cent decline in the S&P BSE Sensex. A combined 4.1 million shares changed hands on the NSE and BSE.

The equity shares of Sah Polymers listed and admitted to dealings on the Exchange in the list of 'T ' group of securities. The scrip will be in Trade-for-Trade (T2T) segment for 10 trading days. In the T2T segment, each trade has to result in delivery and no intra-day netting of positions is allowed.

Sah Polymers is a leading Polypropylene (PP) woven bags manufacturer in India (Udaipur, Rajasthan). The company manufacture and export PP woven bags and High-Density Polyethylene (HDPE) box bags, flexible intermediate bulk containers (FIBCs), and BOPP laminated bags. The company has a strong hold in the Indian market & export out products across Europe, Africa, Middle East, Australia, South–East Asia, Caribbean Island, Latin & Central America, and the USA.

The Rs 66.30 crore IPO of Sah Polymers was subscribed by 17.46 times. The company proposes to utilize the net Proceeds towards setting up of a new manufacturing facility to manufacture new variant of Flexible Intermediate Bulk Containers (FIBC). The fund will also use for repayment/ prepayment of certain secured and unsecured borrowings in full or part availed by the company and the subsidiary company and funding the working capital requirements of the company.

The polymers market size is expected to reach $790 billion by 2027, growing at a CAGR of 5.5 per cent during the period of 2022-27. The company manufactures and sells Polypropylene which is a very lightweight polymer and used as a substitute for various other polymers.

Moreover, the global market for FIBC is estimated at $6701.5 million in 2022 and is projected to reach $9109.7 million by 2028, growing at a CAGR of 5.3 per cent which is likely to aid in the company’s growth, analyst at Reliance Securities said in IPO note.

Based on FY22 earnings the company is valued at 38.3x P/E, 27.9x EV/EBITDA and 2.4x EV/Sales. While, the company has a quality product mix, strong customer base across geographies and industries, good financials and a wide product portfolio, the issue seems pricey based on the current financials, the brokerage firm said.