Shree Tirupati Balajee Agro Trading Company Limited (STB), a leading manufacturer and supplier of Flexible Intermediate Bulk Containers (FIBC), is all set to launch its Initial Public Offering (IPO). The company has established itself as a dominant player in the Indian domestic market and has gained significant traction in international markets due to its customized bulk packaging solutions.

Shree Tirupati Balajee Agro IPO Overview:

The Shree Tirupati Balajee Agro Trading Company Limited IPO is a Book Built Issue amounting to ₹169.64 Crores, consisting of a Fresh Issue of 14.75 lakh shares (₹122.42 crores) and an Offer for Sale (OFS) of 5.69 lakh shares (₹47.22 crores). The IPO will open for subscription on September 05, 2024, and close on September 09, 2024. The company has set a price band of ₹78 to ₹83 per share.

The minimum lot size for investors is 180 shares, which translates to a minimum investment of ₹14,940 for retail investors. High-Net-Worth Individuals (HNIs) are required to invest in a minimum of 14 lots (2,520 shares), amounting to ₹209,160.

The IPO allotment date is set for September 11, 2024, and shares are expected to list on the BSE and NSE on September 12, 2024. PNB Investment Services Limited and Unistone Capital Private Limited are the book-running lead managers for the issue, while Link Intime India Private Limited serves as the registrar.

Grey Market Premium (GMP) Insights:

The Grey Market Premium (GMP) for Shree Tirupati Balajee Agro Trading Company Limited IPO is expected to range between ₹30 to ₹35, indicating potential listing gains of 35%-40%. Although the GMP is often considered an early indicator of market sentiment, it is based on unofficial, unregulated market activity. Investors should treat GMP as one of many factors when deciding on their investment strategy, and not as a definitive predictor of the stock's performance post-listing.

Live Subscription Status:

As of 11:42 AM on September 06, 2024, the Shree Tirupati Balajee Agro Trading Company Limited IPO has been subscribed 4.83 times, with strong interest from various investor categories, particularly on the second day of the subscription period. Retail investors, HNIs, and institutional investors can keep track of the live subscription status on BSE or financial news platforms to gauge ongoing demand.

Shree Tirupati Balajee Financial Performance:

Shree Tirupati Balajee Agro Trading Company Limited has shown consistent financial growth over recent years. The company's revenue increased from ₹45,378.77 million in FY22 to ₹47,813.65 million in FY23, and has further risen to ₹55,282.11 million in FY24. This growth reflects the company’s ability to expand its market reach and strengthen its position in both domestic and international markets.

The company's EBITDA also improved from ₹4,051.35 million in FY22 to ₹5,074.43 million in FY23, and currently stands at ₹7,507.04 million in FY24. This improvement demonstrates enhanced profitability and operational efficiency. Moreover, the Profit After Tax (PAT) rose significantly from ₹1,365.90 million in FY22 to ₹2,071.80 million in FY23, reaching ₹3,607.27 million in FY24. This upward trend in PAT showcases the company’s robust financial health.

In terms of valuation, Shree Tirupati Balajee is issuing shares at a pre-issue Earnings Per Share (EPS) of ₹5.74 and a post-issue EPS of ₹4.42. The company’s pre-issue Price-to-Earnings (P/E) ratio is 14.48x, and the post-issue P/E ratio is 18.77x. These values are favorable compared to the industry average P/E ratio of 30.74x.

The company’s Return on Capital Employed (ROCE) stands at 16.29%, and Return on Equity (ROE) at 20.84% for FY24, further demonstrating effective capital management and profitability.

IPO Allotment and Listing Details:

The Shree Tirupati Balajee Agro Trading Company IPO allotment is expected to be finalized on September 11, 2024. Investors can check their IPO allotment status by visiting the Link Intime India Private Limited website. Here’s a quick guide to checking your allotment:

Visit the IPO allotment status page on the registrar’s website.

Select Shree Tirupati Balajee Agro Trading Company Limited IPO from the dropdown list.

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

Submit the details to view your allotment status.

Once the allotment process is completed, shares are expected to list on September 12, 2024, on both BSE and NSE.

Objectives of the IPO:

The proceeds from the Fresh Issue of Shree Tirupati Balajee Agro Trading Company Limited will be utilized for:

₹3,145.36 million will be used for repayment or prepayment of certain outstanding borrowings.

₹2,082.14 million will be invested in the company’s subsidiaries HPPL, STBFL, and JPPL to repay or prepay borrowings.

₹1,350.00 million is allocated for funding incremental working capital requirements.

₹1,074.00 million will go towards investment in subsidiaries to meet working capital needs.

The remainder will be used for general corporate purposes.

IPO Review and Investment Recommendation:

Shree Tirupati Balajee Agro Trading Company Limited has a solid reputation as one of the strongest FIBC manufacturers in India, and its growth as a leading exporter further strengthens its position in the global market. Managed by a team of industry professionals, led by Mr. Binod Kumar Agarwal, a chemical engineer with over three decades of experience, the company has delivered consistent financial performance over the years.

The company’s strong financial metrics, combined with favorable valuation ratios, make this IPO an attractive option for investors. The expected Grey Market Premium (GMP) indicates potential listing gains of 35%-40%, making this IPO suitable for both listing gains and long-term investment.

Given the company’s strong financials, growth potential, and favorable market position, we recommend that investors apply for the Shree Tirupati Balajee Agro Trading Company IPO.

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