Market Debut : Solve Plastic Products made an impressive entrance on the stock exchanges today, August 21, with its shares listing at ₹102 each on the NSE SME platform. This price reflects a 12% premium over its issue price of ₹91 per share.
The company recently concluded its ₹11.85 crore initial public offering (IPO), which was open for subscription from August 13 to August 16, 2024. The IPO consisted of a fresh issue of 13.02 lakh shares at ₹91 per share. Retail investors had to purchase a minimum lot size of 1,200 shares, requiring an investment of ₹1,09,200. High-net-worth individuals (HNI) needed to buy at least two lots (2,400 shares), amounting to ₹2,18,400.
The IPO attracted substantial interest, achieving an overall subscription rate of 34.23 times. Investors bid for a total of 4.23 crore shares, significantly oversubscribing the 12.36 lakh shares available. Retail investors showed the highest interest, with a subscription rate of 46.76 times, while the “Others” category was subscribed 19.47 times.
Solve Plastic Products plans to use the IPO proceeds for capital expenditures, including purchasing additional plant and machinery, meeting working capital needs, covering issue expenses, and general corporate purposes. Finshore Management Services Limited acted as the book-running lead manager, while Integrated Registry Management Services Private Limited served as the registrar. Black Fox Financial was the market maker for the issue.
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Market Debut: Solve Plastic Products
Founded in 1994, Solve Plastic Products Limited specializes in manufacturing uPVC pipes (unplasticized polyvinyl chloride) and rigid PVC electrical conduits, marketed under the brand name “BALCOPIPES.” The company operates three manufacturing units in Kerala and one in Tamil Nadu. Its products have received approvals from various authorities, including the Bureau of Indian Standards (BIS), and are used by organizations like the Central Public Works Department (CPWD) of Chennai and Kochi, Military Engineer Services (MES), Integral Coach Factory, Public Works Department (PWD) of Kerala and Tamil Nadu, and the Tamil Nadu Housing Board. The company’s products are mainly distributed in Kerala.
Despite a 24% decline in revenue between the financial years ending March 31, 2023, and March 31, 2024, Solve Plastic Products saw an 18% increase in profit after tax (PAT) during the same period. However, market expert Dilip Davda of Chittorgarh.com recommended avoiding the IPO. He noted that the company operates in a highly competitive and fragmented market and has shown inconsistent revenue growth recently. Davda also pointed out that the IPO is aggressively priced based on the company’s FY24 earnings, and with a small equity base post-IPO, it indicates a longer gestation period. He classified the investment as a “High Risk/Low Return” bet, advising potential investors to skip it.
Faqs
What is the listing price of Solve Plastic Products’ shares?
The shares of Solve Plastic Products listed at ₹102 per share on the NSE SME platform, which is a 12% premium over its issue price of ₹91.
How much did Solve Plastic Products raise through its IPO?
The company raised ₹11.85 crore through its initial public offering (IPO).
What was the subscription rate for Solve Plastic Products’ IPO?
The IPO was subscribed 34.23 times overall, with retail investors subscribing at a rate of 46.76 times.
What is the minimum investment required for retail investors in Solve Plastic Products’ IPO?
Retail investors needed to invest in a minimum of 1,200 shares, requiring ₹1,09,200.
What are the key uses of the funds raised from the IPO?
The funds will be used for capital expenditures, including purchasing additional plant and machinery, meeting working capital requirements, covering issue expenses, and general corporate purposes.
Who managed the IPO for Solve Plastic Products?
Finshore Management Services Limited was the book-running lead manager for the IPO.
What products does Solve Plastic Products manufacture?
The company manufactures uPVC pipes and rigid PVC electrical conduits, marketed under the brand name “BALCOPIPES.”
Where are Solve Plastic Products’ manufacturing units located?
The company operates three manufacturing units in Kerala and one in Tamil Nadu.
What was the financial performance of Solve Plastic Products in FY24?
The company experienced a 24% decline in revenue but saw an 18% increase in profit after tax (PAT) between FY23 and FY24.
Is Solve Plastic Products’ IPO recommended for investment?
Market expert Dilip Davda recommended avoiding the IPO, citing the company’s inconsistent financial performance and the high-risk nature of the investment.