Purv Flexipack Limited primarily engages in the distribution of various plastic-based products such as Biaxially Oriented Polypropylene (BOPP) film, Polyester Films, Cast Polypropylene (CPP) films, Plastic granules, Inks, Adhesives, Masterbatches, Ethyl Acedate, and Titanium Dioxide. In addition, the company is a Del Credere Associate (DCA) Dealer Operated Polymer Warehouse (DOPW) of Indian Oil Corporation Limited for their polymer division. Company is dealer of various companies for distribution of plastic based products. Number of dealerships in the portfolio are SRF Limited, Poddar Pigments Limited, Indian Oil Corporation Limited & Brilliant Polymers Private Limited. In addition to distribution business in the plastic-based products, the company has one (1) subsidiary company namely Cool Caps Industries Limited, an NSE SME Listed company and four (4) Step down wholly owned subsidiary companies namely Purv Technoplast Private Limited, Purv Packaging Private Limited, Purv Ecoplast Private Limited and Re.act Waste Tech Private Limited. Purv Technoplast Private Limited is engaged in the business of washing and cleaning line for washing, cutting and cleaning of PET bottles into PET Flakes. The company invested in Purv Technoplast Private Limited through the subsidiary Cool Caps Industries Limited and made it the step down subsidiary company on March 27, 2021. The company offers various packaging solutions to a diverse customer base. They have the own warehouse for storage and inventory management. The warehouse is equipped with modern facilities and equipment to ensure the safe and secure storage of the products. It is maintained under optimal conditions to preserve the quality and integrity of the products, and they have implemented strict inventory management systems to ensure accurate tracking of the inventory. As per financial performance, Purv Flexipack Limited has posted total income / net profits of Rs 137.80 Cr / Rs 6.15 Cr (FY21), Rs 229.44 Cr / Rs 7.66 Cr (FY22), Rs 341.08 Cr / Rs 11.34 Cr (FY23) and Rs 139.36 Cr / Rs 5.76 Cr (upto Q2 FY24). So as per previous financials data, company has shown good growth. But cash flow of company is negative. Company has posted an average EPS of Rs 5.08 and average RoNW of 10.10% for last three fiscals. Issue is priced at a P/BV of 1.23 as per NAV of 57.74 as on 30.09.2023. 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 19.44, 13.14 and 12.93 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Holani Consultants Private Limited is associated with this SME IPO and handled 6 SME IPOs and 1 Main Board IPO in last 3 year. From last 6 SME IPOs, one opened below issue price and remaining opened above issue price or at par on the day of listing and from last 1 Main board IPO that is opened above issue price. As of now from last 10 SME IPOs, all are trading above issue price and from last 1 main board IPO that is trading above issue price. ( As on 17.02.24 ) As per financials, Purv Flexipack Limited has shown good results, RoNW is 10.84% and P/E is respectively 19.44, 13.14 and 12.93 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced, but cash-flow is negative except FY23. Company is engaged in the distribution of various plastic-based products for packaging solutions to a diverse customer base, which is highly competitive and fragmented segment. Performance of BRLM is good. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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