Pyramid Technoplast IPO Review: Pyramid Technoplast Limited is coming up with its Initial Public Offering. The IPO will open for subscription on August 18, 2023, and close on August 22, 2023.

In this article, we will look at the Pyramid Technoplast IPO Review 2023 and analyze its strengths and weaknesses. Keep reading to find out! 

Pyramid Technoplast IPO – About The Company

Established in 1997, Pyramid Technoplast Limited is a company engaged in the manufacture of polymer-based molded products (Polymer Drums) mainly used by agrochemical, chemical, speciality chemical and pharmaceutical companies for their packaging requirements.

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The company produces polymer-based bulk packaging drums and Intermediate Bulk Containers (IBC), as well as MS Drums for chemical, agrochemical, and specialty chemical packaging and transportation.

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Currently, the company has six strategically located manufacturing units out of which four are situated in Bharuch, GIDC, Gujarat and two are situated at Silvassa, UT of Dadra and Nagar Haveli. The seventh manufacturing unit is under development at Bharuch, GIDC, Gujarat, next to the previous six units.

This gives the company a total capacity of 20,612 MTPA in Polymer Drum manufacturing machines, a total installed capacity of 12,820 MTPA for the IBC manufacturing facility, and a total installed capacity of 6,200 MTPA for MS drum units.

To reduce the risk of supply-chain difficulties, the company has developed long-term connections with domestic and international distributors or vendors and has many vendors for specific components rather than relying on a single source.

Pyramid Technoplast IPO Review – Industry Overview

IBC Industry

In India, the demand for intermediate bulk containers is expected to rise dramatically in the coming years. This can be due to India’s strong growth in end-use sectors such as chemical, pharmaceutical, and food and beverage, among others.

The rapid expansion of the Indian chemical industry will also boost demand for intermediate bulk containers. Around 80,000 commercial goods are produced in India by the chemical sector, which includes speciality chemicals, bulk chemicals, polymers, agrochemicals, petrochemicals, and fertilizers.

According to India Brand Equity Foundation (IBEF) estimations, the Indian chemicals market was valued at ₹12,53,02,000 lakhs in 2019 and is expected to rise at a 9.3% CAGR to ₹30,40,000 lakhs by 2025.

The demand for chemicals is expected to increase by 9% each year by 2025. The chemical sector is expected to contribute ₹24,39,00,000 Lakhs to India’s GDP by 2025.

The following image depicts the expected revenue earned from the Indian sectors for India Intermediate Bulk Container (IBC) between 2019 and 2030. (INR LAKHS)

(Source: RHP of the company)

Polymer Drums & HM-HDPE Industry

Polymer drums are frequently used to transport chemicals. They are widely utilized in the industrial shipping business. They are capable of transporting and storing a wide range of cargo, from food to chemicals and pharmaceuticals. Thus, the increase in freight transportation for diverse products has a positive effect on the demand for polymer drums and HM-HDPE.

The following image depicts the expected revenue earned from the Indian sectors for Polymer Drums between 2019 and 2030. (INR LAKHS)

(Source: RHP of the company)

MS-Drums Industry

Mild steel drums (MS-Drums) are a popular choice in the packaging industry due to characteristics like recyclability for reuse, durability, high sustainability, exceptional strength, and eco-friendliness. 

Mild steel barrels are used in the food, coatings, construction, and healthcare industries to transport chemicals and other liquids. It’s also excellent for bulk packing. 

Rapid growth in the food and beverage industry, combined with improved packaging innovation, will aid in increasing product consumption.

The following image depicts the expected revenue earned from Indian sectors for mild steel drums (MS-DRUMS) between 2019 and 2030. (INR LAKHS)

(Source: RHP of the company)

Pyramid Technoplast IPO Review – Financial Highlights

If we look at the financials of Pyramid Technoplast Limited we find out that their assets have grown from ₹153.46 crores in March 2021 to ₹225.78 crores in March 2023.

Their revenues also follow a similar trend, it has grown from ₹316.18 crores in March 2021 to ₹482.03 crores in March 2023. Their profits have grown from ₹16.99 crores in March 2021 to ₹31.76 crores in March 2023.

This rise in revenue and net profit numbers is accompanied by its net profit margins which has increased from 5.42% in FY21 to 6.62% in FY23.

While the net debt of the company had slightly increased in FY22, it was brought down to ₹49.55 crores in FY23. The return ratios report a positive outlook for the company delivering an ROE of 29.61% and ROCE of 21.37% in FY23.

Balance sheet of the company 

Balance sheet of the company
(Source: RHP of the company)
(Source: RHP of the company)

Important figures of the company

Pyramid Technoplast IPO Review - Figures of the company
(Source: RHP of the company)

Revenue segmentation of the company

Revenue Segment details
(Source: RHP of the company)

Pyramid Technoplast IPO Review – Competitors

Following is the comparison of the accounting ratios of Pyramid Technoplast Limited with its listed industry peers:

Pyramid Technoplast IPO Review - Competitors
(Source: RHP of the company)

Strengths of the Company

  • Over the years the company has established relationships with customers from diverse industries like chemicals, agrochemicals, pharmaceuticals, lubricants and edible oil by supplying them with Polymer Drums, IBC and MS drums. During the past three years, the company has served more than 376 customers on a regular basis.
  • The company offers complete bulk industrial packaging solutions to its clients since it manufactures both polymer-based bulk packaging drums and IBC, as well as MS Drums for packaging.
  • The company’s plants are located in the production hubs for a variety of sectors like chemicals, agrochemicals, pharmaceuticals, lubricants, edible oil, and so on. The proximity of the company to these industries allows for simple access and delivery of the company’s products to these industries in these industrial districts.
  • Before being supplied to clients, the company’s products are subjected to extensive quality checks to ensure that they meet industry requirements.
  • It performs various strength tests on containers, such as hydrostatic and pneumatic testing for leaks and ruptures, environmental stress cracking resistance testing, and so on. These tests verify that its products fulfil the industry standards for safety, durability, and environment that clients desire.

Weaknesses of the Company

  • The company is required to adhere to government policies, international standards or customer quality norms for manufacturing industrial packaging products. Changes in any one of these factors which the company won’t be able to adhere to, can affect the growth of the business
  • During FY23, the company has availed unsecured loans amounting to  ₹2.05 crores. If any lender seeks repayment of any such loan, the company may not have sufficient operating cash for its business operations.
  • The polymer used to make IBCs and polymer drums account for a sizable amount of the company’s total expenses. Because the polymer is derived from oil, any increase in crude price or decrease in polymer availability could have a negative impact on the company’s business.
  • As the company has not entered into any long-term agreements with its customers, it is subject to uncertainties in demand and there is no assurance that its customers will continue to purchase its products
  • The company also doesn’t have any long-term agreements with its suppliers for the supply of raw materials. Thus, it is subject to uncertainties in the supply of raw materials and there is no assurance that its suppliers will continue to sell raw materials its requirements.
  • There are proceedings pending before numerous courts, enquiry officers, and appellate forums at various stages of adjudication. Orders issued in such procedures that are detrimental to its interests may harm its reputation and standing, as well as have an adverse effect on its operations.

Pyramid Technoplast IPO – Key IPO Information

IPO Size₹153.05 Cr
Fresh Issue₹91.30 Cr
Offer for Sale (OFS)₹61.75 Cr
Opening dateAugust 18, 2023
Closing dateAugust 22, 2023
Face Value₹10 per share
Price Band₹151 to ₹166 per share
Lot Size90 Shares
Minimum Lot Size1
Maximum Lot Size13 (1170 shares)
Listing DateAugust 30, 2023

Promoters: Bijaykumar Agarwal, Jaiprakash Agarwal, Yash Synthetics Private Limited, Credence Financial Consultancy Llp, Pushpa Devi Agarwal and Madhu Agarwal

Book Running Lead Manager: PNB Investment Services Limited and First Overseas Capital Limited

Registrar to the Offer: Bigshare Services Private Limited

The Objective of the Issue

The net proceeds from this issue will be utilized for the following purposes:

  • For the complete or partial prepayment or repayment of the company’s outstanding borrowings
  • Financing the company’s requirement for working capital
  • General corporate purposes

Pyramid Technoplast IPO Review – GMP

Currently we don’t have the exact information on the GMP, we shall update the article once we received it.

In Closing

In this article, we looked at the details of Pyramid Technoplast IPO Review 2023. Analysts remain divided on the IPO and its potential gains. This is a good opportunity for investors to look into the company and analyze its strengths and weaknesses. That’s it for this post.

Are you applying for the IPO? Let us know in the comments below.

Written By Aaron Vas

By utilizing the stock screener, stock heatmap, portfolio backtesting, and stock compare tool on the Trade Brains portal, investors gain access to comprehensive tools that enable them to identify the best stocks also get updated with stock market news, and make well-informed investment decisions.

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