Shreenath Paper Products IPO Overview

Shreenath Paper Products, a paper-based raw materials supply chain solutions provider, has successfully concluded its IPO process, with shares listing at ₹44 per share on BSE SME. The IPO was subscribed 1.81 times by investors during the subscription period from February 25, 2025, to February 28, 2025.

The company launched a fixed-price IPO worth ₹23.36 crore, consisting of 53.10 lakh fresh issue shares. The market capitalization at the issue price of ₹44 per share stands at ₹86.48 crore. The IPO's lot size was 3,000 shares per lot, requiring a minimum investment of ₹1,32,000 for retail investors and ₹2,64,000 for High-Net-Worth Individuals (HNIs).

Business Model & Industry Focus

Shreenath Paper Products specializes in sourcing, procuring, and supplying paper-based raw materials for industries relying on coating-based, food-grade, machine-glazed, and pressure-sensitive adhesive paper. The company’s operations include:

• Understanding client needs and curating technical specifications

• Sourcing specialized manufacturers and testing product samples

• Ensuring efficient procurement and supply chain management

The company’s diverse product offerings support various industrial applications, particularly in the packaging, labeling, and food industries.

IPO Subscription & Grey Market Premium (GMP)

Despite healthy subscription numbers, the Grey Market Premium (GMP) remained at ₹0, indicating muted demand in the unlisted market. The IPO’s final subscription details as of February 28, 2025, at 7:00 PM, were:

• Total Subscription: 1.81x

• Retail Investors: Moderate response

• HNI & Institutional Investors: Showed participation but lacked strong demand

The lack of premium in the grey market suggests a neutral investor outlook, with limited speculative interest before listing.

Shreenath Paper Products IPO Financial Performance

The company has shown consistent revenue growth, despite fluctuations in profitability. Key financial highlights include:

• Revenue from Operations: ₹7,861.95 lakh (Dec 31, 2024), ₹18,966.98 lakh (FY24), ₹20,669.91 lakh (FY23), ₹14,175.16 lakh (FY22)

• EBITDA: ₹434.34 lakh (Dec 31, 2024), ₹577.36 lakh (FY24), ₹664.26 lakh (FY23), ₹-195.34 lakh (FY22)

• Profit After Tax (PAT): ₹240.51 lakh (Dec 31, 2024), ₹439.06 lakh (FY24), ₹438.47 lakh (FY23), ₹133.76 lakh (FY22)

The financial indicators suggest stable operational performance, but the company’s profitability margins remain tight.

Key Financial Ratios & IPO Valuation

• Pre-Issue EPS: ₹3.07 | Post-Issue EPS: ₹2.23

• Pre-Issue P/E Ratio: 14.33x | Post-Issue P/E Ratio: 19.70x

• Return on Capital Employed (ROCE) FY24: 19.32%

• Return on Equity (ROE) FY24: 23.19%

• Return on Net Worth (RoNW): 23.19%

The IPO valuation indicates that the issue is fairly priced, with a post-issue P/E ratio of 19.70x, aligning with industry standards. However, listing gains are unlikely, given the zero GMP before listing.

Objectives of the IPO Fund Utilization

The IPO proceeds will be allocated as follows:

1. ₹1,800.00 lakh for working capital requirements

2. ₹287.16 lakh for general corporate purposes

Promoters & Leadership

Shreenath Paper Products is led by a strong promoter group, including Alok Parekh, Ronak Parekh, Navneetdas Parekh, Hasumati Navneetdas Parekh, Harish Parekh, Hasumati Harish Parekh, Neha Parekh, and Sayali Parekh. The key executives are:

• Alok Parekh (Chairman & Managing Director): B.E. (IT) graduate with 10+ years of experience in supply chain solutions, overseeing vendor & customer relations, finance, and accounting.

• Ronak Parekh (Whole-time Director & CEO): Holds a Bachelor’s and Master’s in Management Studies from the University of Mumbai, with expertise in marketing and product innovation.

IPO Allotment & Listing Details

The allotment date for Shreenath Paper Products IPO is March 3, 2025, with shares credited to demat accounts before the listing date on March 5, 2025. Investors can check allotment status via the registrar’s website (Bigshare Services Pvt Ltd) by:

1. Navigating to the IPO allotment status page

2. Selecting Shreenath Paper Products Limited IPO from the dropdown

3. Entering Application Number, PAN, or DP Client ID

4. Submitting the details to view allotment status

Investment Recommendation & Final Verdict

While Shreenath Paper Products operates in a growing segment, the IPO’s weak grey market activity, tight margins, and moderate subscription levels suggest limited upside potential. Given the valuation and financials, analysts recommend avoiding this IPO for listing gains or long-term investment purposes. Investors should monitor future earnings before considering an entry into the stock post-listing.

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