Shreenath Paper Products Ltd is ready to make its mark in the Indian stock market with an Initial Public Offering (IPO) scheduled to open on February 25, 2025, and close on February 28, 2025. The company specializes in supply chain solutions for industries reliant on paper-based raw materials, such as coating-based paper, food-grade paper, machine-glazed paper, and pressure-sensitive adhesive paper. The IPO is entirely a fresh issue consisting of 53.10 lakh shares, with a total issue size of ₹23.36 Crores.

IPO Subscription Details

The share price for the Shreenath Paper Products IPO has been set at ₹44 per equity share, which implies a market capitalization of ₹86.48 Crores at the issue price. The IPO will be listed on the BSE SME platform, and the shares are expected to be listed on March 5, 2025. The lot size for the IPO is 3,000 shares, meaning retail investors will need to invest a minimum of ₹1,32,000 for one lot. For High-Net-Worth Individuals (HNIs), the minimum investment requirement is 2 lots (6,000 shares), which amounts to ₹2,64,000.

Grey Market Premium (GMP)

As of now, the Grey Market Premium (GMP) for the Shreenath Paper Products IPO stands at ₹0, indicating a lack of speculative interest. The GMP can often be a rough indicator of demand in the unregulated market but is not a reliable predictor of post-listing performance. Investors should be cautious when relying on GMP for making investment decisions.

Live Subscription Status

As of 11:00 AM on February 27, 2025, the live subscription status of the Shreenath Paper Products IPO shows that it has been subscribed 0.27 times on its second day of subscription. The demand is still relatively low, which could impact the listing gains.

IPO Allotment Date

The IPO allotment date for Shreenath Paper Products is scheduled for March 3, 2025. Investors can check their allotment status by visiting the registrar's website and entering the required details such as application number, PAN, or DP client ID.

Objectives of the IPO

The proceeds from the IPO will be utilized for the following purposes:

1. ₹1,800 Lakhs for incremental working capital requirements.
2. ₹287.16 Lakhs for general corporate purposes.

Financial Performance and Valuation

Shreenath Paper Products has shown steady growth in revenue and profits over the past few years. For the fiscal year ending December 31, 2024, the company reported ₹7,861.95 Lakhs in revenue, ₹434.34 Lakhs in EBITDA, and ₹240.51 Lakhs in Profit After Tax (PAT). This shows consistent performance with a positive outlook.

The Pre-issue EPS stands at ₹3.07, and the Post-issue EPS is ₹2.23 for FY24. The pre-issue P/E ratio is 14.33x, and the post-issue P/E ratio is 19.70x, which is relatively high compared to industry peers. The company’s Return on Capital Employed (ROCE) is 19.32%, and Return on Equity (ROE) stands at 23.19%, indicating strong profitability metrics.

Shreenath Paper Products IPO Review

Despite its steady financial growth and promising business model, the IPO is priced at a premium, which may not provide immediate listing gains based on the current GMP of ₹0. Additionally, with the high P/E ratio and the relatively low demand reflected in the live subscription status, this IPO may not be the best option for short-term investors seeking listing gains.

The valuation also suggests that the IPO is fully priced, and potential investors should carefully assess their risk tolerance before making long-term investment decisions.

In conclusion, while Shreenath Paper Products has a strong foothold in the supply chain for paper-based materials, its IPO might not offer immediate returns due to high valuation and low market sentiment. Investors are advised to approach this IPO with caution and consider the long-term prospects rather than relying on quick listing gains.

The Upcoming IPOs in this week and coming weeks are Balaji Phosphates, NAPS Global.

The Current active IPO are Shreenath Paper, Nukleus Office.

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