Ideal Technoplast Industies Limited is a manufacturer and supplier of rigid plastic packaging, with a presence in both domestic and international markets (indirectly through export houses and third parties). They provide industrial packaging solutions for sectors such as paints, agro, chemicals, cosmetics, adhesives, lubricants, food, and edible oil. The Surat facility spans multiple stories, covering an area of 20,000 sq. ft., and features advanced technology, including a fully automated plant. They employ In-Mould Labelling (IML) via robotic automation that enhances the output capacity. Company transitioned to online business in 2021 to better serve the Pan India clientele. In the two years since they went digital with the menswear product line, they have served about 15,000 plus pin codes in India. In addition to being present on the top online marketplaces, they are also present in over 500 plus large format stores, which helps them to be visibly present in offline spaces. They have more than 1200 SKUs in the product catalogue. Company is currently targeting Tier-2, Tier-3 and Tier-4 cities dedicated to providing value to customers with fashionable and comfortable product ranges. Their 95% of the products priced below ?499/-. By having the products priced at such affordable prices they are targeting mass customer from tier-2, tier-3, tier-4 to enjoy the latest fashion within their budget. The Company mainly sources fabric from the local markets of Kolkata, Surat and Mumbai, and outsources its job work to the manufacturers at Kolkata under the supervision of company personnel for designs and quality control. The finished products are then branded and delivered at the Company warehouse. After Quality checking at the warehouse, the products are further dispatched as per orders from wholesalers and e-commerce platform buyers. They also have dedicated suppliers who does the entire process from sourcing till manufacturing, and deliver them the designed garments which are then checked for quality at the warehouse. So company is working with asset light model and which also help them stay faster in adding different products. As per financial performance, Ideal Technoplast Industies Limited has posted total income / net profits of Rs 5.69 Cr / Rs 0.10 Cr (FY21), Rs 5.68 Cr / Rs 0.11 Cr (FY22), Rs 11.99 Cr / Rs 0.51 Cr (FY23) and Rs 24.24 Cr / Rs 3.27 Cr (upto FEB FY24). So as per previous financials data, company has shown good growth. But sudden rise in net-profit just before IPO and non availability of complete FY24 finance data raises doubts. Company has posted an average EPS of Rs 2.18 and average RoNW of 17.25% for last three fiscals. Issue is priced at a P/BV of 2.58 as per NAV of 46.93 as on post issue. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 575, 120 and 16.98 respectively, which looks aggressively priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Swastika Investmart Limited is associated with this SME IPO and handled 9 SME IPOs in last 3 years. From last 9 IPOs, one opened below issue price and remaining above or at par on the day of listing. As of now from last 9 IPOs, four are trading below issue price and remaining above issue price as of now. ( As on 20.08.24 ) As per financials, Ideal Technoplast Industies Limited has shown growth, RoNW is 26.84% and P/E is respectively 575, 120 and 16.98 as per FY22, FY23 and annualised FY24 earnings. So, issue looks aggressively priced, sudden rise in net-profit just before IPO and not availability of complete FY24 financial data raises doubts. Company is engaged in the manufacturing and supplying of industrial packaging solutions, which is highly fragmented and competitive business segment. Performance of BRLM is average. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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