GSM Foils IPO Review

GSM Foils Ltd. (GFL) specializes in manufacturing Blister Foils and Aluminium Pharma Foils, which are essential for packing pharmaceutical medicines like capsules and tablets. Since these foils directly contact the medicine, GFL ensures high-quality standards. Over the years, GFL has developed expertise in producing various types of pharmaceutical foils and offers them in different sizes, shapes, and thicknesses to meet diverse client needs. The company is led by Chairman and Whole Time Director Mr. Sagar Girish Bhanushali and Managing Director Mr. Mohan singh L Parmar, both of whom have 4 years of experience in production and manufacturing at GFL.

GFL's revenue saw a significant jump from Rs. 36 crore in FY21 to Rs. 71.85 crore in FY22, but it declined to Rs. 65.88 crore in FY23 and further to Rs. 27.18 crore for the 9 months from April to December. Despite this, the company's EBITDA margin improved from Rs. 0.72 crore in FY22 to Rs. 1.32 crore in FY23, reaching Rs. 2.84 crore for the same 9-month period. GFL reported a Return on Equity (ROE) of 19.13% in FY23, but the Return on Capital Employed (ROCE) was a low 0.34%, indicating minimal returns for investors and making the investment less attractive. 

Operating in a highly competitive and fragmented market, GFL has shown inconsistency in its financial performance. Issue price of the IPO is fixed at Rs. 32 at which the post issue P/E is 28.68 against the industry P/E of 25.2, which makes the IPO fully priced and nothing much left for the investors. Grey Market Premium (GMP) is also indicating a listing gain of 0% - 10%. Considering the financial performance and Valuation of the IPO, we recommend you to avoid the IPO for listing gains and investment purpose.