Pyramid Technoplast Limited is an industrial packaging company engaged in the business of manufacturing polymer based molded products (Polymer Drums) mainly used by chemical, agrochemical, speciality chemical and pharmaceutical companies for their packaging requirements. They are one of the leading manufacturers of rigid Intermediate Bulk Containers (IBC) in India manufacturing 1,000 litre capacity IBC. They also manufacture MS Drums made of mild steel (MS) used in the packaging and transport of chemicals, agrochemicals and speciality chemicals.
OBJECTS OF THE ISSUE
- Prepayment or repayment of certain outstanding borrowings.
- Funding working capital requirements of the company.
- General corporate purposes.
KEY MANAGERIAL PERSONNEL
1. Bijaykumar Agarwal
Managing Director & Chairman of the Company. He has been associated with the Company since 2002. He has over three decades of experience in packaging industry. He looks after various functions in the Company such as finance, raw material procurement, customer servicing, and business development.
2. Jaiprakash Agarwal
Whole-time Director & Chief Financial Officer of the Company. He has been associated with the Company since June 2003. He has over 19 years of experience in the packaging industry. He looks after various functions in the Company such as manufacturing, finance, accounts, sales & marketing and business development.
3. Madhu Agarwal
Whole-time Director of the Company. She holds a bachelor’s degree of commerce from the Calcutta University. She has been associated with the Company since May 2006. She has over sixteen (16) years of experience in human resource compliance and administration.
4. Chandrakant Joge
e Company Secretary and Compliance Officer of the Company. He looks after the overall corporate governance and secretarial matters of the Company. He has an experience of more than seven years.
COMPANY PROFILE
- The Company use blow molding technology to manufacture Polymer Drums and IBCs. Injection molding technology is used for manufacturing caps, closures, bungs, lids, handles, lugs, etc. for in-house use. Their products are marketed and sold under the brand name “Pyramid”.
- The company started commercial production in the year 1998 in Unit I. Presently, they have six strategically situated manufacturing units out of which four (4) are in Bharuch, GIDC, Gujarat and two (2) are situated at Silvassa, UT of Dadra and Nagar Haveli. The seventh (7) manufacturing unit is under construction at the Bharuch, GIDC, Gujarat adjacent to the existing six units.
- The total installed capacity of their Polymer Drum manufacturing units is 20,612 MTPA. The total installed capacity of their IBC manufacturing unit is 12,820 MTPA and the total installed capacity of MS Drums unit is 6,200 MTPA.
COMPETITIVE STRENGTHS
- Diverse customer base. Comprehensive product portfolio.
- Strategic location of their manufacturing units.
- Quality Standard Certifications & Quality Tests.
- Experienced Promoters and senior management team.
KEY STRATEGIES
- Continued focus on Intermediate Bulk Containers (IBC) by expanding their existing facilities.
- Continued focus on Polymer Drums and Mild Steel (MS) drums.
- Explore organic growth opportunities to increase capacity and business.
- Exploit industry opportunities arising out of the current geo-political situation and government policies.
KEY CONCERNS
- Unsecured loans of ₹ 205.39 lakhs taken by the Company from lenders can be recalled at any time. Polymer including polypropylene and polyethylene is the primary raw material consumed by the Company. Polymer is a derivative of crude oil and any substantial increase in price of crude oil or decrease in the supply of polymer could materially adversely affect the Company’s business.
- Their Business has substantial working capital requirements. They require significant amount of working capital for purchasing key raw materials which they procured from domestic and international suppliers.
- The company has experienced negative net cash flow from operating activities in the past . The company face competition from various domestic manufacturers and traders.
- Any ban on polymer based packaging by the Government of India may affect the business.
COMPARISON WITH LISTED INDUSTRY PEERS (AS ON 31ST MARCH 2023)
FINANCIALS (RESTATED CONSOLIDATED)
OUTLOOK & VALUATION
Pyramid Technoplast is a well-established player in the plastic packaging industry with a proven track record of financial performance. The company has a strong brand presence and a wide customer base, and it is also expanding its operations. It has strategic locations for its manufacturing units. However, the company faces some risks, such as competition from new entrants, fluctuations in the price of raw materials, and changes in government policies. Additionally, the company has experienced negative cash flow in the past. Nevertheless, the IPO is fairly priced at a P/E of around 16.24x. Thus, after considering all these factors, high-risk investors may apply for this IPO.
DISCLAIMER:
The information contained herein are strictly confidential and are meant solely for the information of the recipient and shall not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written permission of Swastika Investmart Ltd. (“SIL”). The contents of this document are for information purpose only. This document is not an investment advice and must not alone be taken as the basis for an investment decision. Before taking any decision to invest, the recipient of this document must read carefully the Red Herring Prospectus (“RHP”) issued to know the details of IPO and various risks and uncertainties associated with the investment in the IPO of the Company. All recipients of this document must before acting on the given information/details, make their own investigation and apply independent judgment based on their specific investment objectives and financial position. They can also seek appropriate professional advice from their own legal and tax consultants, advisors, etc. to understand the risks and investment considerations arising from such investment. The investor should possess appropriate resources to analyze such investment and the suitability of such investment to such investor’s particular circumstances before making any decisions on the investment. The Investor shall be solely responsible for any action taken based on this document. SIL shall not be liable for any direct or indirect losses arising from the use of the information contained in this document and accept no responsibility for statements made otherwise issued or any other source of information received by the investor and the investor would be doing so at his/her/its own risk. The information contained in this document should not be construed as forecast or promise or guarantee or assurance of any kind. The investors are not being offered any assurance or guaranteed or fixed returns on their investments. The users of this document must bear in mind that past performances if any, are not indicative of future results. The actual returns on investment may be materially different than the past. Investments in Securities market products and instruments including in the IPO of the Company are highly risky and they are generally not an appropriate avenue for someone with limited resources/ limited investment and low risk tolerance. Such Investments are subject to market risks including, without limitation, price, volatility and liquidity and capital risks. Therefore, the users of this document must carefully consider all the information given in the RHP including the risks factors before making any investment in the Equity Shares of the Company.Swastika Investmart Ltd or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither Swastika Investmart Ltd nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. Swastika Investment Ltd may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject company. We have not received any compensation/benefits from the Subject Company or third party in connection with the Research Report.CORPORATE & ADMINISTRATIVE OFFICE - 48, Jaora Compound, M.Y.H. Road, Indore - 452 001 | Phone 0731 - 6644000Compliance Officer: Ms. Sheetal Duraphe Email: compliance@swastika.co.inPhone: (0731) 6644 241Swastika Investmart Limited, SEBI Reg. No. : NSE/BSE/MSEI: INZ000192732 Merchant Banking: INM000012102 Investment Adviser: INA000009843 MCX/NCDEX: INZ000072532 CDSL/NSDL: IN-DP-115-2015 RBI Reg. No.: B-03-00174 IRDA Reg. No.: 713.
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