Barflex Polyfilms, a key player in the flexible packaging industry, made its debut on the NSE SME platform on January 20, 2025, at ₹60 per share, matching its IPO price. Although it started off flat, the stock quickly rose to ₹63, hitting the upper circuit limit of 5%. This surge reflects the market's positive reception of the company despite no listing gains for IPO investors who were allotted shares at the issue price.

Company Overview and Product Line

Barflex Polyfilms is a manufacturer of COEX films, laminates, and labels used in packaging products across several industries. These include FMCG, processed foods, pharmaceuticals, cosmetics, and more. The company specializes in 3-layer and 5-layer poly films, vacuum pouches, and PVC shrink labels, catering to a wide range of sectors.

With over 19 years of experience in the flexible packaging sector, Barflex has carved a niche in the packaging industry. The company is headed by Mr. Jaiwant Bery, who brings over 37 years of expertise, supported by an experienced team of executives. This background and robust product range make Barflex a strong player in the sector.

IPO Details and Subscription

The Barflex Polyfilms IPO was a Book Built Issue that raised a total of ₹39.42 Crores, with a Fresh Issue of ₹12.31 Crores and an Offer for Sale of ₹27.10 Crores. The IPO was offered at a price band of ₹57 to ₹60 per equity share, with a lot size of 2,000 shares. Retail investors needed to invest a minimum of ₹1,20,000, and the minimum investment for High-Net-Worth Individuals (HNIs) was ₹2,40,000 for two lots.

The IPO had a high subscription rate, with the issue subscribed 140.73 times by the final day of the subscription period. This indicates strong demand for Barflex Polyfilms' shares in the market.

The Grey Market Premium (GMP) before the listing was ₹12, which indicated a potential listing gain of around 20%. However, as the stock did not show a premium on the listing day, investors who got allotted shares at the issue price did not see immediate gains.

Financial Performance and Valuation

Barflex Polyfilms has demonstrated steady growth in its financial performance. For the fiscal year 2024, the company reported revenues of ₹7,802.09 Lakh, showing a consistent upward trend from previous years. The EBITDA for FY2024 was ₹1,939.29 Lakh, with a Profit After Tax (PAT) of ₹1,349.28 Lakh, showcasing its financial stability.

The company's pre-issue EPS for FY24 stood at ₹7.15, and the post-issue EPS is ₹6.56. With a P/E ratio of 8.39x before the issue and 9.15x post-issue, the company’s valuation is attractive compared to the industry P/E ratio of 28x. Barflex's Return on Capital Employed (ROCE) for FY24 was 27.21%, indicating strong profitability, and its Return on Equity (ROE) and Return on Net Worth (RoNW) stood at 25.44%, further supporting its financial strength.

Investment Recommendation

Given the company's consistent performance, robust product portfolio, and strong financial metrics, Barflex Polyfilms' IPO is considered fairly priced. The Grey Market Premium suggested strong listing gains, although no immediate gains were seen on listing day. Risk-tolerant investors may find this IPO appealing, with long-term prospects tied to the growth of the packaging industry.

Company's Future Prospects

Barflex Polyfilms plans to use the funds raised through the IPO for capital expenditure, especially to purchase additional plant and machinery. This will support the company’s expansion and ability to meet the growing demand for packaging materials in various industries.

Additionally, the company has outlined general corporate purposes for the use of the IPO proceeds, ensuring that the funds will support its overall business growth and market presence.

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