Shreenath Paper Products is a leading provider of supply chain solutions for industries that rely on paper-based raw materials. Specializing in products like coating-based paper, food-grade paper, machine-glazed paper, and pressure-sensitive adhesive paper, the company has been instrumental in curating technical specifications, sourcing manufacturers, testing samples, and ensuring efficient supply to its customers.

The company is launching a Fixed Price Issue for ₹ 23.36 Crores, consisting entirely of a fresh issue of 53.10 Lakh shares. The IPO opens for subscription from February 25, 2025, to February 28, 2025, with the allotment expected to be finalized by March 3, 2025. The shares will be listed on the BSE SME platform on March 5, 2025, with a price of ₹ 44 per equity share. The market capitalization at the IPO price stands at ₹ 86.48 Crores.

The lot size for the IPO is 3,000 shares, with a minimum retail investment amount of ₹ 1,32,000, while High-Net-Worth Individuals (HNIs) are required to invest a minimum of ₹ 2,64,000 (2 lots). The IPO’s book running lead manager is Galactico Corporate Services Limited, with Bigshare Services Private Limited as the registrar. Pure Broking Private Limited acts as the market maker for the issue.

Shreenath Paper Products IPO Subscription and GMP

As of February 28, 2025, the Shreenath Paper Products IPO was subscribed 1.81 times on the final day of the subscription period. This reflects a moderate interest from investors, though the Grey Market Premium (GMP) for the IPO is expected to be ₹ 0, indicating no anticipated listing gains. The GMP is based on demand and supply dynamics in the unregulated grey market and should be considered for informational purposes only, as it does not reflect the official market pricing.

Financial Performance and Metrics

Shreenath Paper Products has shown steady growth in its financials. The company's revenue from operations for the fiscal year ended December 31, 2024, was ₹ 7,861.95 Lakh, compared to ₹ 18,966.98 Lakh in 2023 and ₹ 20,669.91 Lakh in 2022. The EBITDA for FY24 was ₹ 434.34 Lakh, a decrease from ₹ 577.36 Lakh in 2023 but a significant improvement from ₹ -195.34 Lakh in 2022. The Profit After Tax (PAT) for FY24 stood at ₹ 240.51 Lakh, reflecting a healthy profit growth trajectory.

Despite these positive trends, the IPO is priced with a pre-issue Earnings Per Share (EPS) of ₹ 3.07 and a post-issue EPS of ₹ 2.23 for FY24. The company's Price-to-Earnings (P/E) ratio stands at 14.33x pre-issue and 19.70x post-issue, which suggests that the IPO is fully priced and may not offer significant short-term investment returns. The Return on Capital Employed (ROCE) for FY24 was 19.32%, and the Return on Equity (ROE) stood at 23.19%, which are respectable figures but not exceptional for the sector.

Objectives of the IPO

The primary objectives of the Shreenath Paper Products IPO are as follows:

1. Incremental Working Capital: ₹ 1,800.00 Lakhs will be used for increasing the working capital to meet the company’s growth needs.
2. General Corporate Purpose: ₹ 287.16 Lakhs will be allocated for general corporate purposes, which include enhancing the company’s operational capabilities.

Investment Review and Conclusion

Based on the financial metrics and valuation, the Shreenath Paper Products IPO appears to be fully priced. While the company has shown steady growth, with strong management led by experienced promoters, the absence of any expected listing gains and a high P/E ratio suggest that this IPO may not be a lucrative option for investors seeking short-term profits. Additionally, the Grey Market Premium of ₹ 0 indicates no potential for immediate gains on listing.

The company’s stable financial performance, however, may appeal to long-term investors with a focus on supply chain solutions for industries relying on paper-based raw materials. For those looking for quick returns or substantial listing gains, this IPO may not be the best option. As such, investors are advised to proceed with caution and carefully consider the risks before committing to the Shreenath Paper Products IPO.

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The Current active IPO are Balaji Phosphates.

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