Three M Paper Boards Limited

Pursuant to conversion of the company from private to public, under section 43A(1A) of the Companies Act 1956, the name of our Company was changed from “Three-M-Paper Manufacturing Company Private Limited” to “Three-M-Paper Manufacturing Company Limited” by deleting the word Private, and a fresh certificate of incorporation consequent to change of name was issued on July 01, 1998. The company is engaged in the business of manufacturing recycled paper-based Duplex Board products used in various packaging applications across industries such as food and beverage, pharmaceuticals, cosmetics, and consumer goods and supplies its high-quality duplex board paper products in both the domestic and international markets. products are made out of 100 percent recycled waste paper and are completely biodegradable. The company sets out to undertake various innovations in both the product-development side as well as in manufacturing processes on a consistent basis. The company is headquartered in Mumbai, with its manufacturing facility located in Chiplun, Dist. Ratnagiri, Maharashtra. Equipped with state-of-the-art machines and ultra-modern technologies in its manufacturing facility, the company had a total manufacturing capacity of 72,000 TPA paper at the close of FY 2023–24. the promoter, Mr. Hitendra Dhanji Shah, has been associated with the paper industry for more than three decades, having wide experience in marketing, management, and administration and having in-depth knowledge of the paper industry. His son, Mr. Rushabh Shah (B.E. from the UK), is overseeing production, factory coordination, and marketing. They are also supported by a team of qualified specialists in technical, administrative, financial, and marketing areas.. The company's performance is derived from its strategic focus to be a low-cost paper manufacturer with a growing systemic integration of new technologies and processes. As per financial performance, Three M Paper Boards Limited has posted total income / net profits of Rs 165.52 Cr / 1.73 Cr (FY21), Rs 316 Cr / Rs 3.27 Cr (FY22), Rs 329.74 Cr / Rs 6.61 Cr (FY23), Rs 276.01 Cr / Rs 11.34 Cr (FY24). So, as per previous financials data, company has shown growth, but sudden rise in net-profit just before IPO raises doubts for results. Company has posted an average EPS of Rs 6.4 and average RoNW of 15.26% for last three fiscals. Issue is priced at a P/BV of 1.52 as per NAV of 45.38 as on 31.03.24. If we attribute latest earnings of FY22, FY23 and FY24 on fully diluted equity post issue, then asking price is at a P/E of around 40.52, 20.07 and 11.70 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Comfort Securities Limited is associated with this IPO and this is first SME IPO of this BRLM.  ( As on 10.07.24 ) As per financials, Three M Paper Boards Limited has shown good growth, RoNW is 18.51% and P/E is respectively 40.52, 20.07 and 11.70 as per FY22, FY23 and FY24 earnings. So, issue looks fully priced, but sudden rise in net-profit just before IPO raises doubts. Company is engaged in the business of manufacturing recycled paper-based Duplex Board products, which is highly fragmented and competitive business segment. So, we give "SUBSCRIBE FOR LISTING GAINS" rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Hitendra Dhanji Shah 
• 2 Prafulla Hitendra Shah
• 3 Rushabh Hitendra Shah