Aten Papers & Foam Limited (APFL), a prominent player in the paper and packaging industry, is set to launch its initial public offering (IPO), which opens on March 28, 2025, and closes on April 02, 2025. The company, which has been creating recyclable and renewable paper products for diverse needs like hygiene, business documents, exams, novels, and much more, aims to raise ₹31.68 Crores through this Book Built Issue.

IPO Details and Subscription Information

• IPO Issue Size: ₹31.68 Crores (Fresh Issue of 33.00 Lakh Shares)

• Price Band: ₹91 to ₹96 per equity share

• Lot Size: 1,200 shares

• Retail Investment: Minimum investment of ₹1,15,200 for retail investors

• HNI Investment: Minimum investment of ₹2,30,400 for High-Net-Worth Individuals (HNIs)

• Expected Listing Date: April 07, 2025 (tentative)

The company’s market capitalization at the upper price band of ₹96 per share is expected to be ₹98.888 Crores. The subscription period for the IPO allows investors to place their bids between March 28 and April 02, 2025. The allotment of shares will be finalized on April 03, 2025, and shares will be listed on the BSE SME on April 07, 2025.

Financial Performance and IPO Valuation

Aten Papers & Foam has demonstrated steady growth in its financial performance over the years, as reflected in its revenue and profitability trends:

• Revenues for FY 2024 were ₹8,982.28 Lakh, with steady growth from ₹5,818.38 Lakh in FY 2022.

• EBITDA for the period ending September 30, 2024, was ₹190.83 Lakh, showing improvement from ₹187.58 Lakh in FY 2023.

• Profit after Tax (PAT) for FY 2024 was ₹76.31 Lakh, reflecting a steady performance despite market fluctuations.

The company’s pre-issue EPS stands at ₹3.97, while the post-issue EPS is expected to be ₹2.70 for FY 2024. The Price-to-Earnings (P/E) ratio pre-issue is 24.18x, and post-issue it is 35.56x, which is considered relatively high for an SME IPO. These ratios and the return on capital employed (ROCE) of 23.23% indicate that the IPO is fully priced.

Grey Market Premium (GMP)

As of March 25, 2025, the Grey Market Premium (GMP) for Aten Papers & Foam is reported at ₹0, signaling no expected listing gains based on the financial performance and current market conditions. It is important to note that the GMP in the grey market is not a reliable indicator of actual listing price and is driven by supply and demand in unorganized markets.

Objectives of the IPO

The company intends to utilize the net proceeds of the IPO for the following purposes:

1. Capital Expenditure: ₹425.00 Lakhs

2. Working Capital Requirements: ₹4,458.34 Lakhs

3. General Corporate Purposes

This allocation will support the company's ongoing expansion plans and improve its operational capabilities, ensuring better service delivery in the paper and packaging market.

Allotment Process and Checking Allotment Status

The IPO allotment is expected to be finalized on April 03, 2025, and the status can be checked online on the registrar’s website:

1. Visit the registrar’s website.

2. Select Aten Papers & Foam Limited IPO from the dropdown list.

3. Enter your application number, PAN, or DP Client ID.

4. Submit the details to check your allotment status.

This will allow investors to quickly determine their allotment status and proceed with their investments accordingly.

IPO Review and Recommendation

Considering the financial performance, valuation metrics, and the GMP, we recommend that investors avoid the Aten Papers & Foam IPO for listing gains or long-term investment purposes. The high P/E ratio, coupled with a flat GMP, suggests that the IPO is fully priced. Therefore, investors should carefully evaluate their investment goals before committing to the IPO.

Conclusion

The Aten Papers & Foam Limited IPO offers an opportunity for investors to participate in the growing paper and packaging sector, but with a relatively high valuation. Investors should weigh the potential risks and returns carefully before investing in this SME IPO. The lack of expected listing gains, combined with the company's steady growth, makes it a cautious investment.

The Upcoming IPOs in this week and coming weeks are Arisinfra Solutions Limited,Identixweb Limited,Retaggio Industries Limited,Infonative Solutions Limited.

The Current active IPO are ATC Energies System Limited, Shri Ahimsa Naturals Limited,Desco Infratech Limited,Rapid Fleet Management Services, Active Infrastructures Limited.

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