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Premium Plast Ltd, established in 1995, is launching its SME IPO valued at Rs. 26.20 crore, scheduled from October 21 to 23, 2024. The company specializes in manufacturing plastic parts for commercial vehicles and offers a wide range of injection and blow-molded plastic components used in the automotive and industrial sectors. The company has three strategically located manufacturing facilities, two in Pithampur, Madhya Pradesh, and one in Vasai, Maharashtra, with a combined capacity of 1,975 MTPA.
The IPO consists of a fresh issue of 53.46 lakh shares priced between Rs. 46 to Rs. 49 per share. The company aims to utilize the IPO proceeds for purchasing machinery, expanding its manufacturing capacity, installing a rooftop solar power plant, and reducing its outstanding debt.
Company Financial Highlights
Premium Plast has shown significant growth, with a 6% increase in revenue and a 200% rise in profit after tax (PAT) between FY 2023 and FY 2024. The company’s total assets increased to Rs. 4,006.31 lakh, and its net worth reached Rs. 2,216.67 lakh as of June 2024.
IPO Strengths and Weaknesses
Strengths:
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Strong client relationships and growth potential.
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Diversified product portfolio catering to various market segments.
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Strategic location of manufacturing facilities.
Weaknesses:
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Heavy reliance on the automotive industry’s performance.
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Vulnerability to raw material price fluctuations.
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Competitive pressures in the plastic manufacturing industry.
Conclusion
Premium Plast’s IPO presents a promising investment opportunity, backed by its established presence in the automotive plastic parts market and strong financial growth. However, investors should consider the risks related to industry dependence and raw material cost volatility before making a decision
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