Shreenath Paper Products IPO is one of the most awaited Initial Public Offerings in 2025, offering 53.10 Lakh fresh equity shares to raise ₹ 23.36 Crores. The IPO subscription period for Shreenath Paper Products commenced on February 25, 2025, and will close on February 28, 2025, making it a key event for investors seeking to enter the paper products supply chain market.

This IPO is priced at ₹ 44 per equity share, which places the market capitalization of Shreenath Paper Products Limited at ₹ 86.48 Crores. The lot size is set at 3,000 shares, making the minimum investment requirement for retail investors around ₹ 1,32,000 and for High-Net-Worth Individuals (HNIs), the minimum investment is ₹ 2,64,000 (for two lots).

The IPO allotment will be finalized by March 3, 2025, and shares will be listed on the BSE SME platform, with a tentative listing date of March 5, 2025. Galactico Corporate Services Limited serves as the book running lead manager, and Bigshare Services Private Limited will act as the registrar. Pure Broking Private Limited has been designated as the Market Maker.

Shreenath Paper Products' Market Performance and Grey Market Premium

The Grey Market Premium (GMP) for the Shreenath Paper Products IPO is currently ₹ 0, meaning that there has been no active trading or price discovery in the grey market as of now. The grey market premium is an unofficial measure of the expected market price of shares before the IPO is listed. However, it's important to note that GMP is not a reliable indicator of actual performance, as it reflects demand and supply in an unorganized manner.

As of February 28, 2025, the live subscription status for the Shreenath Paper Products IPO shows that it has been subscribed 0.92 times on its final day of subscription. Investors are keenly awaiting the final allotment, which will give clarity on how the shares will perform upon listing.

Company Profile and Financials

Shreenath Paper Products specializes in providing supply chain solutions for industries that rely on paper-based raw materials. The company's expertise includes coating-based paper, food-grade paper, machine-glazed paper, and pressure-sensitive adhesive paper. Their operations span from understanding client needs to curating technical specifications, sourcing specialized manufacturers, testing samples, and ensuring efficient delivery of materials.

The company has shown consistent growth in its financial performance, with revenues for the year ending December 31, 2024, recorded at ₹ 7,861.95 Lakh, a significant increase from ₹ 7,861.95 Lakh in FY2024, ₹ 18,966.98 Lakh in FY2023, and ₹ 20,669.91 Lakh in FY2022. EBITDA for the same period is ₹ 434.34 Lakh in FY24, while the Profit after Tax (PAT) stands at ₹ 240.51 Lakh.

The pre-issue EPS (earnings per share) stands at ₹ 3.07, while the post-issue EPS is projected at ₹ 2.23 for FY24. The pre-issue P/E ratio is 14.33x, and the post-issue P/E ratio is expected to be 19.70x. The company’s Return on Capital Employed (ROCE) for FY24 is 19.32%, with Return on Equity (ROE) at 23.19%. These metrics highlight the company's efficient management and profitability, although the higher P/E ratio could signal a fully-priced IPO.

IPO Objectives and Use of Proceeds

The funds raised from the IPO will be used for two key objectives:

1. ₹ 1,800.00 Lakhs will be allocated to meeting the incremental working capital requirements to support the company’s growing operational needs.
2. ₹ 287.16 Lakhs will be utilized for general corporate purposes, helping the company enhance its overall business operations and strategies.

Promoter Background and Leadership Team

Shreenath Paper Products is led by a team of experienced promoters and executives. Alok Parekh, the Chairman and Managing Director, holds a degree in Information Technology from Dr. Babasaheb Ambedkar Marathwada University and brings over 10 years of experience in supply chain solutions. He is responsible for overseeing the company’s vendor and customer relations, as well as finance and accounting.

Ronak Parekh, the Whole-time Director and CEO, holds a Bachelor’s and Master’s in Management Studies from the University of Mumbai. He has been with the company since 2011 and leads marketing and product innovation, with over 10 years of industry experience.

Conclusion: A Cautious Approach for Investors

Based on the financial metrics and the IPO pricing, it is evident that Shreenath Paper Products has shown steady growth, though the higher P/E ratio suggests that the IPO may already be fully priced. The grey market premium indicates minimal short-term listing gains, and with no major oversubscription thus far, prospective investors should carefully assess the risks before investing for short-term gains or long-term growth.

Recommendation: Given the current market conditions, we recommend investors exercise caution and avoid the Shreenath Paper Products IPO if looking for short-term listing gains. For long-term investment, more analysis on post-issue performance may be needed before making a decision.

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

The Current active IPO are Balaji Phosphates, Shreenath Paper.

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