Barflex Polyfilms is a manufacturer of COEX films, laminates, and labels, providing flexible packaging materials for industries such as FMCG, processed foods, pharmaceuticals, cosmetics, and construction. The company specializes in products like 3-layer and 5-layer poly films, vacuum pouches, and PVC shrink labels. Barflex has built a strong reputation over the past 19 years in the flexible packaging industry.

The Barflex Polyfilms IPO is a book built issue with a total size of ₹39.42 Crores, consisting of a fresh issue of ₹12.31 Crores and an offer for sale of ₹27.10 Crores. The IPO opens on January 10, 2025, and closes on January 15, 2025, with the listing date scheduled for January 20, 2025, on the NSE SME platform. The price band for the IPO is set at ₹57 to ₹60 per share, giving the company a market capitalization of ₹148.5 Crores at the upper price band.

The lot size for the IPO is 2,000 shares, with retail investors required to invest a minimum of ₹1,20,000. For High-Net-Worth Individuals (HNIs), the minimum investment is ₹2,40,000 for 2 lots (4,000 shares).

Subscription and Grey Market Premium (GMP):

As of January 07, 2025, the Grey Market Premium (GMP) for the Barflex Polyfilms IPO stands at ₹12, indicating potential listing gains of 20.26%. This significant GMP suggests a positive demand for the IPO, potentially leading to substantial short-term returns for investors.

Financial Performance and Valuation:

Barflex Polyfilms has demonstrated steady growth in its revenues and profits:

• Revenue from operations for the period ending November 30, 2024, stood at ₹7,802.09 lakh, reflecting steady growth from ₹9,410.27 lakh in FY2022.
• EBITDA for FY2024 is ₹1,939.29 lakh, higher than ₹1,330.45 lakh in FY2023, signaling improved operational efficiency.
• Profit After Tax (PAT) for FY2024 is ₹1,349.28 lakh, reflecting consistent profitability over the years.

Key financial metrics include:

• Pre-issue EPS of ₹7.15 and post-issue EPS of ₹6.56 for FY24.
• Pre-issue P/E ratio of 8.39x and post-issue P/E ratio of 9.15x, much lower than the industry P/E ratio of 28x.
• Return on Capital Employed (ROCE) for FY24 stands at 27.21%, and Return on Equity (ROE) at 25.44%, indicating efficient capital utilization.

The annualized EPS for FY24 is ₹8.91, with a P/E ratio of 6.73x, suggesting that the IPO is reasonably priced.

Investment Recommendation:

The Barflex Polyfilms IPO presents an attractive investment opportunity based on its steady financial growth, strong market position in the flexible packaging sector, and positive IPO valuation. The GMP of ₹12 suggests potential listing gains of 20.26%, making it an appealing option for risk-tolerant investors. The low P/E ratio compared to industry standards further supports the investment case.

The Upcoming IPOs in this week and coming weeks are Sat Kartar Shopping,Barflex Polyfilms.

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