Started in 1987, Prince Pipes and Fittings Limited is one of the leading polymer pipes and fittings manufacturers in India in terms of production capacity, number of distributors, and number and variety of products manufactured. Company markets its products under two brand names: Prince Piping Systems; and Trubore Piping Systems. Company has more than 30 years' experience in manufacturing polymer pipes and more than 20 years‘ experience in manufacturing fittings. Company currently manufactures polymer pipes and fittings using four different polymers: UPVC; CPVC; PPR; and HDPE. As at October 31, 2019, company has a product range of 7167 SKUs. Its products are used for varied applications in plumbing, irrigation, and soil, waster and rain water management. Company has six strategically located manufacturing plants, which has enabled them to develop a strong presence in North, West and South India. Company's plants are located at the following locations:1. Athal (Union Territory of Dadra and Nagar Haveli)2. Dadra (Union Territory of Dadra and Nagar Haveli) 3. Haridwar (Uttarakhand)4. Chennai (Tamil Nadu)5. Kolhapur (Maharashtra)5. Jobner (Rajsthan). The total installed capacity of its six existing plants is 2,41,211 tonnes per annum as at October 31, 2019. They plan to expand the installed capacity at their plant in Jobner (Rajasthan) from 6,221 tonnes per annum as at at October 31, 2019 to 17,021 tonnes per annum by December 31, 2019 and to 20,909 tonnes per annum by the end of Fiscal 2020. Company plans to set up a new manufacturing plant in Sangareddy (Telangana), with a total estimated installed capacity of 51,943 tonnes per annum. They plan to commence production at the Telangana plant in Fiscal 2021. They use five contract manufacturers, of which two are in Aurangabad (Maharashtra), one is in Guntur (Andhra Pradesh), one is in Balasore (Odisha) and one is in Hajipur (Bihar). Company currently sells its products to distributors who then resell them to wholesalers, retailers, and consumers. As at October 31, 2019, company had 1151 distributors spread across India. Company sells the Trubore products directly to wholesalers and retailers. As at October 31, 2019, company sold the Trubore products to 257 wholesalers and retailers. On performance front, Prince Pipes has posted turnover/net profits of Rs. 1081.62 cr. / Rs. 29.54 cr. (FY16), Rs. 1332.50 cr. / Rs. 74.18 cr. (FY17), Rs. 1326.57 cr. / Rs. 72.77 cr. (FY18) and Rs. 1578.99 cr. / Rs. 83.35 cr. (FY19). For Q1 FY20, it has reported net profit of Rs. 26.67 cr. on a turnover of Rs. 380.19 cr. Thus company has posted good growth over last couple of years on consistent basis except FY18. Prince Pipes has posted an average EPS of Rs. 8.63 and average RoNW of 23.68% for last three fiscals. Issue is priced at a P/BV of 3.85. Listed peers are shown in above table. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of around 18 and as per FY19 earnings P/E is 23.50. So this IPO looks fully priced. On BRLM's front, for JM Financial Services Limited and Edelweiss Financial Services Limited, both have handled around 32 IPOs in last three fiscals, and from last 10 IPOs, 3 opened below issue price and remaining opened above issue price on the day of listing. As of now, from last 10 IPOs, two are trading below issue price and remaining above issue price. ( As on 16.12.2019 ) As per financials, company's growth is good, RoNW is 23.68% for last three fiscals and issue is priced at P/E of around 23.50. When we compare is with other listed players, there is not much on offer. Performance of BRLM is good. So we give NEUTRAL rating to this IPO.
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