Shree Tirupati Balajee Agro IPO - Issue Details, Valuation, Financials, Strength, Risks And More: Anand Rathi

Anand Rathi Report

Shree Tirupati Balajee Agro Trading Company Ltd. will launch its initial public offering for subscription on Sept. 05 and the offer concludes on Sept. 09. The manufacturer and seller of flexible intermediate bulk containers has fixed the price band in the range of Rs 78 to Rs 83 per share at a face value of Rs 10. The minimum order lot for subscription is 180 shares.

The Rs 170-crore IPO comprises of a fresh issue of up to 1,47,50,000 equity shares and an offer for sale of up to 56,90,000 equity shares.

Objects of the Issue:

• Repayment and/or prepayment, in part or full, of certain of the outstanding borrowings availed by the Company.

• Investment in the subsidiaries HPPL, STBFL and JPPL for Repayment and/or prepayment, in part or whole, of certain outstanding borrowings availed

• Funding the incremental working capital requirements of the company

• Investment in the subsidiaries HPPL, STBFL and JPPL for funding working capital requirements.

• General corporate purposes.

Valuation and outlook

Shree Tirupati Balajee Agro Trading Company is engaged in the business of manufacturing and selling of Flexible Intermediate Bulk Containers i.e. large flexible bags and other industrial packaging products such as woven sacks, woven fabric and narrow fabric, tapes in the domestic and overseas markets.

The company caters to the bulk packaging solutions of its clients from various industries like chemicals, agrochemicals, food mining, waste disposal industry, agriculture industry, lubricants and edible oil by supplying them customized FIBC products for transportation purposes and their packaging requirement.

At the upper price band company is valuing at P/E of 18.7 times with a market cap of Rs 6,770 million post issue of equity shares and return on net worth of 20.8%.

On the valuation front, we believe that the company is fairly priced. Thus, we recommend an “Subscribe” rating to the IPO.

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