Platinum Industries IPO to open today: What brokerages say on the Rs 235 crore issue

Platinum Industries IPO to open today: What brokerages say on the Rs 235 crore issue

The Rs 235.32 crore-initial public offering (IPO) of Platinum Industries will open for public bidding on Tuesday, February 27. Interested investors can apply for the issue in the price band of Rs 162-171 apiece, for a minimum of 87 equity shares and its multiples thereafter. The IPO will conclude on Thursday, February 29.

Analysts are largely positive on the maker of electrical appliances, citing  strong growth potential, expansion in the global markets, reasonable valuations and decent track record.

Platinum Industries has grown from commencing from two products portfolio to a multi-product manufacturing company with sales across India and in international markets. It is into manufacturing of industrial products with strong R&D capabilities, said Shivam Gupta from Anand Rathi Shares and Stock Brokers.

“At the upper price band, the company is valuing at P/E of 25 times, with a market cap of Rs 939.21 crore post issue of equity shares and return on net worth of 61.26 per cent. We believe that valuations of the company are fairly priced and recommend a ‘subscribe for long term’ rating to the IPO,” it added in the IPO note.

Platinum Industries, which was incorporated in August 2016, specialises in producing stabilizers. The company manufactures PVC stabilizers, CPVC additives and lubricants. The company’s products are used in PVC pipes, PVC profiles, PVC fittings, electrical wires and cables, SPC floor tiles, Rigid PVC foam boards, packaging materials and more.

The IPO entirely includes a sale of 1,37,61,225 fresh shares. Platinum Industries raised Rs 70.60 crore from seven anchor investors- Baring Private Equity India AIF 2, Elara India Opportunities Fund, Saint Capital Fund, Leading Light Fund VCC, Antara India Evergreen Fund, NAV Capital Emerging Star Fund and Astorne Capital VCC Arven- allocating them 41,28,237 shares at Rs 171 apiece.

The PVC market is poised for substantial growth, driven by the pipes and fittings segment, forecasted to achieve an 8-9 per cent CAGR from 2022 to 2027. Construction industry expansions in the MENA region, backed by initiatives like Saudi Vision 2030, will fuel demand, said Arihant Capital Markets in its IPO note.

“Investments in various sectors will escalate PVC consumption and the need for PVC stabilizers. The global specialty chemicals industry is set to grow, emphasizing strong prospects for PVC-related applications. The issue is valued at an EV/EBITDA of 12.81 times based on FY23 Ebitda of Rs 53.85 crore and P/E of 18.15 times based on FY23 EPS of Rs 9.42,” it said with a ‘subscribe’ tag.

The net proceeds from the issue shall be utilised towards investment in the subsidiary, Platinum Stabilizers Egypt; funding of capital expenditure requirements towards setting up of a manufacturing facility for PVC Stabilizers at Maharashtra’s Palghar, working capital requirements; and general corporate purposes.

The manufacturing facility of Platinum Industries is situated in Palghar, which is spread across 21,000 square feet of land. The company has twelve distribution centres spread across India as of July 2023.

Platinum Industries plans to increase its global market reach through expanding its production capacities. The company is in the process of setting up a new manufacturing facility in Egypt. The company is seeking to diversify the application of its products to cater customers across various industries and help in increasing the market share, said Vishnu Kant Upadhyay, Assistant Vice President – Research & Advisory at Master Capital Services.

“The company is in the process of establishing another facility at Palghar, Maharashtra to streamline production and increase capacity engaged in the manufacture of non-lead-based stabilizers. Investors looking to invest, can invest in this IPO with a medium to long term perspective,” he said.

Platinum Industries has consistent financial performance, with research and development and sustainability and a varied product portfolio catering to diversified industries, said Globe Capital. “High entry barriers, quality Products and experienced-qualified management are other positives. The issue is valued at 18.5 times. Investors may subscribe for the medium to long term rewards,” it added.

Platinum Industries’ IPO reserved  50 per cent of the IPO shares for qualified institutional investors (QIBs), 15 per cent for non-institutional investors (NIIs), and 35 per cent for retail investors. Unistone Capital serves as the sole book running lead manager, with Bigshare Services as the registrar. Shares will debut on both BSE and NSE, on March 5, Tuesday.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

Watch Live TV in English

Watch Live TV in Hindi