Last Updated on December 26, 2023 by BFSLTeam BFSLTeam
While many people are not familiar with the packaging industry, it’s one of the fastest-growing sectors in India. Driven by factors like a growing population, increasing internet penetration and rising income levels, the industry is expected to grow at a CAGR of 12.6% from $71.90 billion in 2023 to $130.14 billion in 2028.
If you find this sector interesting, you may have heard of the industrial packaging company, Pyramid Technoplast Limited. This company is fully prepared to open its Initial Public Offering (IPO) on 18th August 2023 to raise funds of around Rs. 153 crore. Want to know more?
Check out the following sections to know all the important details of this IPO, including the timeline, price range, lot size and more.
Table of Content
IPO details
Pyramid Technoplast Ltd will launch a public offering of 92.2 lakh equity shares comprising a fresh issuance of 55 lakh shares and an Offer for Sale (OFS) of 37.2 lakh shares. Here are all details of this company’s IPO:
| IPO opening date | 18th August 2023 |
| IPO closing date | 22nd August 2023 |
| Total issue size | 92,20,000 equity shares (Rs. 153.05 crore approx.) |
| Fresh issue size | 55,00,000 equity shares (Rs. 91.30 crore approx.) |
| OFS size | 37,20,000 equity shares (Rs. 61.75 crore approx.) |
| Issue type | Book built IPO |
| Listing at | BSE and NSE |
| Face value | Rs. 10 per share |
| Price range | Rs. 151 to Rs. 166 per share |
| Lot size | 90 shares |
| Minimum investment amount (retail) | Rs. 14,940 (1 lot) |
| Maximum investment amount (retail) | Rs. 1,94,220 (13 lots) |
| Retail Individual Investor (RII) allocation | Not more 50% of the offer |
| Non-institutional Investor (NII) allocation | Not less than 20% of the offer |
| Qualified Institutional Buyer (QIB) allocation | Not less than 30% of the offer |
About the company
Pyramid Technoplast Limited is an industrial packaging company specialising in bulk packaging and storage solutions. The company primarily manufactures polymer-based moulded drums; it is among the leading producers of Intermediate Bulk Containers (IBC) in India. It also produces mild steel (MS) drums and plastic barrels (HM-HDPE).
IBCs made by this company are used by companies in chemicals, agrochemicals, pharmaceuticals and the speciality chemical sector. These industry-grade containers are ideal for mass handling, storage and transport of solids, semi-solids, paste and liquid. Moreover, they are available in a variety of sizes between standard shipping drums and intermodal tank containers.
Pyramid Technoplast is one the few companies in India able to manufacture 1000-litre IBCs. The IBC and MS drums made by this company have UN certification that meets the United Nations Recommendations on the Transport of Dangerous Goods. Furthermore, the MS drums are built up to the quality standards stipulated by IS 1783:2014 (Part 1 and Part 2).
As per the information given in its Red Herring Prospectus (RHP), the company has six manufacturing units; 4 of these are located in Bharuch, Gujarat and the rest in Silvassa, Dadra and Nagar Haveli. Altogether, the company’s manufacturing units have the following capacities: 12,820 MT per annum for IBCs, 6,200 MTPA for MS drums and 20,612 MTPA for polymer drums.
The manufacturing units are ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 certified for quality, health, safety and environment management systems.
IPO tentative timetable
As you already know, the Pyramid Technoplast IPO opens on Friday, 18th August, and closes on Tuesday, 22nd August 2023. Here is the complete timetable for this IPO:
| Anchor allocation date | 17th August 2023 |
| IPO opening date | 18th August 2023 |
| Closing date | 22nd August 2023 |
| Cut-off time for UPI mandate | 5 p.m., 22nd August 2023 |
| Basis of allotment | 25th August 2023 |
| Date of refund initiation | 28th August 2023 |
| Credit of shares to Demat | 29th August 2023 |
| Listing date | 30th August 2023 |
IPO Lot Size
Check this table to know the minimum and maximum investment amounts for different investor classes:
| Application type | Number of lots | Amount |
| Minimum (retail investors) | 1 (90 shares) | Rs. 14,940 |
| Maximum (retail investors) | 13 (1170 shares) | Rs. 1,94,220 |
| Minimum (S-HNI) | 14 (1260 shares) | Rs. 2,09,160 |
| Maximum (S-HNI) | 66 (5940 shares) | Rs. 9,86,040 |
| Minimum (B-HNI) | 67 (6030 shares) | Rs, 10,00,980 |
| Maximum (B-HNI) | Non-applicable | Non-applicable |
Company financials
Here are the essential details of the restated financial statements of Pyramid Technoplast Limited (all figures are in Rs. lakhs):
| Parameters as per the year ending on | 31st March 2023 | 31st March 2022 | 31st March 2021 |
| Total assets | 22,578.14 | 18,375.61 | 15,345.55 |
| Total liabilities | 11,853.31 | 10,855.26 | 10,460.95 |
| Total expenses | 43,917.76 | 36,748.37 | 29,329.75 |
| Total revenue | 48,202.74 | 40,264.15 | 31,617.63 |
| Profit after tax | 3176.07 | 2614.61 | 1699.24 |
| EBITDA | 5182.86 | 4442.91 | 3249.77 |
| Earnings per share (basic and diluted) | 10.24 | 8.43 | 5.41 |
Strengths
Here are some of the competitive strengths of Pyramid Technoplast Ltd that could make it a worthwhile investment:
- Manufacturing units in strategic locations
Pyramid Technoplast has six manufacturing units that are located near industrial belts. Both Bharuch in Gujarat and Silvassa in Dadra and Nagar Haveli are located near major industrial hubs where most of this company’s customer base is located. Moreover, these units have good connectivity to highways, ports and airways, which reduces the supply costs.
- Comprehensive product offering
The company offers a range of storage and packaging solutions that suit the needs of different businesses. It manufactures a variety of industrial packaging products, including open-top drums, polycans, jerry cans, wide-mount drums and narrow-mount drums. The size of these products can vary between 20 litres and 250 litres. For bulk storage, Pyramid Technoplast offers 1000-litre IBCs.
- Independent transportation system
Pyramid Technoplast Ltd is not dependent on any third-party transport company to ensure timely delivery. It owns a fleet of 51 trucks which it can use for internal transport of raw materials and equipment or for transporting products to its customers. It also reduces the cost and time taken for deliveries.
- Customers in diverse industries
Over the past three financial years, Pyramid Technoplast has served over 376 regular customers from different industries. The company has supplied IBCs, polymer drums and MS drums to clients in sectors such as agrochemicals, chemicals, edible oil, lubricants and pharmaceuticals. Most of these companies have long-term relationships with Pyramid Technoplast and are their repeat customers.
Risks involved
Before making any investment, you should learn of the risk factors that can affect the company’s operations and revenue earning capacity. Here are some of the potential risks of investing in Pyramid Technoplast:
- Lack of experience of the company’s directors
None of the directors present on the company’s board have any prior experience as a director of a listed company. This presents a risk where these directors may not be aware of all the complicated legal regulations that the company has to comply with. If for some reason, a director is held liable for non-compliance, it could hamper operations and result in losses for investors.
- Changes in government policies and quality norms
As a manufacturer, Pyramid Technoplast has to comply with several international standards, quality norms and government policies. Changes in regulations for the packaging industry or chemical, pharmaceutical and other industries that form the company’s customer base could result in losses. Although no government regulations on plastic items have affected the company’s operations, this could change in the future.
- Unsecured loans taken by the company
As of July 2023, Pyramid Technoplast has availed unsecured loans of up to Rs. 209.39 lakh from various lenders which represents 2.2% of its total borrowings. Lenders may recall this loan at any time requiring the company to have sufficient working capital to repay the amount.
Summary
Pyramid Technoplast is one of the leading manufacturers and exporters of various industrial-grade containers in India. The company supplies a range of plastic and mild steel containers and intermediate bulk containers to industries in the chemical, pharmaceutical, speciality chemical and agrochemical sectors.
The company is all set to launch its IPO on Friday, 18th August 2023. It aims to raise around Rs. 91.30 crore from its fresh issuance of equity shares and use the proceeds to repay its debt and fulfil its working capital requirements.
The promoter, Credence Financial Consultancy LLP will participate in an OFS of around Rs. 61.75 crore. An anchor placement will take place on the day before the IPO opens. The offer will close on 22nd August 2023. If you want to invest this IPO, make sure to check all the details present in its RHP and assess your investment objectives and risk appetite before making a decision.
