Pyramid Technoplast IPO opens for subscription, GMP up 15%; should you subscribe to the issue-

Pyramid Technoplast IPO opens for subscription, GMP up 15%; should you subscribe to the issue?

Pyramid Technoplast IPO: Pyramid Technoplast IPO opened for public subscription on Friday, 18 August, and will close on Tuesday, 22 August. The bidding for anchor investors concluded on Thursday, wherein the company collected Rs 27.55 crore. The price band for its public issue at Rs 151-166 per equity share of face value Rs 10 each. At the upper end of the price band, the company’s promoters and shareholders seek to raise Rs 153.05 crore from the IPO. Ahead of the public issue, Concord Biotech shares’ GMP rose to Rs 25.5 per equity share, 15.36% over the upper end of the share price on offer.

The IPO comprises a fresh issue of equity shares worth Rs 91.3 crore and an Offer-For-Sale (OFS) with promoters offloading shares worth Rs 61.75 crore. The company intends to use the net proceeds from the IPO to bolster its capital base, catering to its future capital requirements resulting from business and asset growth. For potential investors, the bidding starts at a minimum of 90 equity shares, with subsequent bids in multiples of 90 equity shares.

Should you apply for the Pyramid Technoplast IPO?Stoxbox: Avoid

Pyramid Technoplast is an industrial packaging company involved in the business of manufacturing polymer-based molded products mainly used by chemical and pharma companies for their packaging requirements. The company has a track record of sustained Rev/EBITDA/PAT growth which rose at a CAGR of 23.7%/29.3%/36.9% during the FY21-23 period. On the upper price band, the issue is valued at a P/E of 16.2x based on FY2023 earnings. The high competitive intensity, thin margins and volatility due to commoditized nature of the business (dependent on crude and steel prices) and consistent levels of debt makes us cautious on the issue. We, therefore, recommend a “Avoid” rating for the issue

Mehta Equities: High-risk investors can subscribe

Pyramid Technoplast is a well-established player in the plastic packaging industry with a proven track record of financial performance. The company has a strong brand presence and a wide customer base, and it is also expanding its operations. It has strategic locations for its manufacturing units. However, the company faces some risks, such as competition from new entrants, fluctuations in the price of raw materials, and changes in government policies. Additionally, the company has experienced negative cash flow in the past. Nevertheless, the IPO is fairly priced at a P/E of around 16.24x. Thus, after considering all these factors, high-risk investors may apply for this IPO.

(The recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)