AIK Pipes and Polymers Ltd IPO - Key Details You Need to Know
About the Company
AIK Pipes and Polymers Ltd manufactures a comprehensive range of HDPE (High-density polyethylene) pipes, HDPE Fittings, MDPE (Medium density polyethylene) Pipes, and PPR (Polypropylene random) pipes for water distribution, gas transmission, sewerage systems, and telecom sector.
The company is committed to constantly innovating drinking water piping solutions, irrigation, and sewerage technologies. It’s a registered vendor with government organizations such as the Public Health Engineering Department and Rajasthan Water Supply & Sewerage Management Board across Rajasthan.
IPO Details
With an issue size of Rs 15.02 crore, the company is offering a total of 1,688,000 shares. Here are the other key details of the IPO:
| IPO Subscription Opens On | 26 December |
|---|---|
IPO Subscription Ends On | 28 December |
Issue Price | Rs 89 |
Lot Size | 1600 |
The company plans to utilize the net proceeds from the issue to meet its working capital requirements and general corporate purposes.
Financial Snapshot
The company's revenues have been rising steadily over the years, which showcases its growth. Its revenue increased by 47.21%, and profit after tax rose by 113.58% between FY 22 and FY 23. Some of its key financials for FY 23 are as follows:
| Revenue from Operations | Rs 3048.23 lakhs |
|---|---|
Total Expenses | Rs 2827.04 lakhs |
Return on Net Worth | 33.50% |
Earnings Per Share | 4.13 |
Total Assets | Rs 1450.50 lakhs |
Company Strengths and Risks
Strengths
Here are the key strengths of the company:
- Long-standing Customer Relationships
The company enjoys enduring relationships with its customers, which is driven by the high criticality of our product and technical expertise. Its product offerings enable it to cross-sell to existing customers and attract new ones.
- Scalable Business Model
The company uses its existing resources optimally to drive its business model through orders. It has sufficient capacity for upward scaling. At the same time, the company is aggressively involved in marketing its products without compromising on quality.
- Timely Order Fulfillment with Cost-effective Production
The company has implemented several measures to ensure and uphold timely fulfillment of its order, cost-efficiently. It has continuously worked towards implementing an efficient procurement policy for necessary production inputs. It aims to achieve cost efficiency in procurement and subsequently enabling cost-effective production.
- Quality Assurance and Standards
The company has received the prestigious ISO 9001:2015 certification for its quality management system. This demonstrates its commitment to delivering the highest quality products to its customers. It maintains rigorous quality standards throughout the manufacturing process, ensuring the use of appropriate materials and adherence to proper procedures. Its dedicated efforts towards ensuring the quality of its products have given it a competitive edge in the market.
Risks
- Major revenue contribution coming from top 10 customers
- Major purchases coming from top 10 suppliers
- Instances of negative cash flows in the past
In Conclusion
The petrochemical industry has seen significant advancements over the last few years. The progress in the plastic machinery sector has significantly propelled the plastic processing industry. This progress has boosted plastic processors' capacity to cater to domestic and international customers.
As of now, approximately 30,000 units in the Indian plastic processing industry employ injection molding, blow molding, extrusion, and calendaring techniques to produce various products. Plastic material is gaining increasing importance across multiple sectors, with a rapid rise in per capita consumption.
Also, the Union Ministry of Commerce and Industry in India aims to boost the country's plastic exports to US$ 25 billion by 2025. It is actively establishing multiple plastic parks in a phased manner to bolster the nation's plastic manufacturing outputs. These developments position AIK Pipes and Polymers Ltd to benefit in the coming days. That said, take a close look at the valuations before subscribing to any IPO, and this holds true for the AIK Pipes and Polymer's IPO, too.
