L.K. Mehta Polymers Ltd, a leader in the Indian plastic rope and twine industry, is launching its IPO with a fresh issue of 10.40 lakh shares worth ₹7.38 Crores. The IPO will open on February 13, 2025, and close on February 17, 2025, with shares being listed on the BSE SME. The price band for the IPO is set at ₹71 per share, giving the company a market capitalization of ₹27.26 Crores at the IPO price.

The lot size is set at 1,600 shares, requiring a minimum investment of ₹1,13,600 for retail investors. HNIs are required to invest in at least 2 lots, amounting to ₹2,27,200. The allotment date is expected to be finalized on February 18, 2025, with shares set to list on February 20, 2025.

L.K. Mehta Polymers IPO Subscription and GMP:

As of February 13, 2025, the IPO has been subscribed 2.63 times on the first day of the subscription period. The Grey Market Premium (GMP) for the IPO is currently ₹0, indicating that there may be no immediate listing gains. The GMP is determined by supply and demand in the unofficial grey market and is not always indicative of future performance. This metric is provided for informational purposes only.

IPO Objectives:

L.K. Mehta Polymers Ltd intends to utilize the net proceeds from the IPO for the following purposes:

• ₹534 Lakhs for incremental working capital requirements.
• ₹134.40 Lakhs for general corporate purposes.

Financial Performance and Key Metrics:

The company has demonstrated a steady growth in its financial performance, with revenues from operations for FY 2024 of ₹1,198.15 Lakhs. The EBITDA for the same period stands at ₹115.34 Lakhs, with a Profit After Tax (PAT) of ₹41.77 Lakhs. Over the past few years, the company has shown growth in profits, though there was a loss in FY 2023, reflecting some volatility in performance.

The pre-issue P/E ratio is 20.76x, while the post-issue P/E ratio rises to 31.87x. The Return on Equity (ROE) stands at 28.35%, showcasing strong financial efficiency. The Annualized EPS based on the latest financial data is ₹1.98, with a PE ratio of 35.73x, suggesting that the IPO is fully priced.

L.K. Mehta Polymers IPO Review:

L.K. Mehta Polymers Ltd has a strong legacy in the plastic rope and twine sector, spanning three generations. Led by Mr. Kamlesh Mehta and Ms. Rina Mehta, the company has demonstrated resilience and a commitment to quality. The company’s financial performance has seen a steady improvement, despite occasional volatility, and the valuation of the IPO appears to be reasonable based on its current performance.

While the company has shown growth, the GMP of ₹0 indicates that there may be no immediate listing gain, making this IPO more suitable for long-term investors rather than those seeking quick returns.

Conclusion:

L.K. Mehta Polymers IPO is a well-established company with a solid foundation in the plastic industry, but with no immediate listing gain indicated by the GMP. Investors looking for long-term exposure to the plastic and polymer industry may consider investing, while short-term investors may want to approach the IPO with caution.

The Upcoming IPOs in this week and coming weeks are Quality Power Electrical Equipments, 

The Current active IPO are PS Raj Steels, Voler Car, Maxvolt Energy, Hexaware Technologies, Ajax Engineering, L.K. Mehta, Shanmuga Hospital.

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