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Business News/ Markets / Ipo/  Platinum Industries IPO: Planning to invest? Here are 10 key things to know from RHP before subscribing
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Platinum Industries IPO: Planning to invest? Here are 10 key things to know from RHP before subscribing

Platinum Industries IPO is a book built issue of ₹235.32 crores. The issue is entirely a fresh issue of 1.38 crore shares.

Platinum Industries IPO (PTI)Premium
Platinum Industries IPO (PTI)

Stabilizers producing company Platinum Industries initial public offering (IPO) opened for subscription on on February 27, 2024 and will close on February 29, 2024.

Platinum Industries IPO was subscribed 22.22 times on the second day of bidding. The issue received bids of 21,40,84,467 shares against the offered 96,32,988 equity shares, at a price band of 162-171, according to the data available on the stock exchanges.

Also read: Platinum Industries IPO opens next week. GMP, review, size, other details about upcoming IPO

As per the information available on the NSE website, the price band of this upcoming IPO has been fixed at 162 to 171 per equity share.

Platinum Industries IPO has reserved not less than 20% of the shares in the public issue for Qualified Institutional Buyers (QIB), not more than 15% for Non Institutional Investors (NII), and not more than 35% of the offer is reserved for Retail Investors.

Platinum Industries IPO is a book built issue of 235.32 crores. The issue is entirely a fresh issue of 1.38 crore shares.

The company plans to utilise the net proceeds towards - Investment in the subsidiary, Platinum Stabilizers Egypt LLC ("PSEL"), for financing its capital expenditure requirements about the setting up of a manufacturing facility for PVC Stabilizers at SC Zone 'Governorate of Suez Egypt', funding of capital expenditure requirements of the company towards setting up of a manufacturing facility for PVC Stabilizers at Palghar, Maharashtra, funding working capital requirements of our company and general corporate purposes.

Also read: Platinum Industries IPO opens today: GMP, issue details, 10 key things to know before subscribing to 235-crore issue

Platinum Industries IPO details.
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Platinum Industries IPO details.

Here are key things from the Red Herring Prospectus (RHP) that investors might want to know before subscribing to the issue.

Platinum Industries IPO Promoters

The promoters of the company are Krishna Dushyant Rana and Parul Krishna Rana, according to the Red Herring Prospectus (RHP). Promoters collectively hold and aggregate of 38,987,030 equity shares equivalent to 94.72% of the issued, subscribed and paid-up pre-issue equity share capital of the company.

Platinum Industries IPO Peers

As per the company's red herring prospectus (RHP), its listed peers are Supreme Petrochem Ltd (with a P/E of 24.39) and Apcotex Industries Ltd (with a P/E of 22.36).

Platinum Industries IPO Subsidiaries

The company's subsidiaries are Platinum Global Additives Private Limited, Platinum Oleo Chemicals Private Limited and Platinum Stabilizers Egypt LLC.

Platinum Industries IPO Group Companies

Platinum Industries' group companies are First Orgacon Private Limited, Rivaan Plastchem Private Limited, DBR Plastics Private Limited, DBR Chemicals Private Limited, and Addplast Chemicals Trading LLC.

Platinum Industries IPO Business

Platinum Industries Limited is a company that specializes 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, etc. The manufacturing facility of the company is situated in Palghar, Maharashtra, and spreads across 21,000 sq. ft. of land.

According to the CRISIL Report, the company is the third largest player of PVC stabilizer in terms of sales with an 13% market share for the financial year 2022-23 in the domestic market.

Platinum Industries IPO Competitive Strength

Starting with a modest 2-product portfolio, the company has evolved into a diverse multi-product manufacturing entity. Demonstrating robust growth, revenues and net profits have surged at impressive Compound Annual Growth Rates (CAGR) of 62% and 179% respectively since FY21. Bolstering its capabilities, the business boasts an in-house Research and Development (R&D) facility spanning 3352 square feet. Equipped with state-of-the-art laboratory apparatus and staffed by proficient researchers, the facility is dedicated to pioneering innovative products. Notably, the company has devised over 400 grades exclusively for PVC applications, tailored to meet diverse customer needs. Furthermore, the company has diversified its revenue streams across PVC, CPVC, lubricant, and trading segments, ensuring a resilient business model.

Platinum Industries IPO Key Risks

Some of the key risks are -

  1. The company operate out of a single Manufacturing Facility which is located at Palghar, Maharashtra, any localized social unrest, natural disaster or breakdown of services or any other natural disaster in and around Palghar, Maharashtra or any disruption in production at, or shutdown of, its manufacturing unit could have material adverse effect on the business and financial condition.
  2. The company is in the process of expanding its operations and establishing a network of distributors & customers in regions where it doesn't have a significant presence or prior experience. Any failure to expand into these new regions could adversely affect the sales, financial condition, result of operations and cash flows.
  3. The company is dependent on a few customers for a major part of its revenues. Further, the company do not enter into long-term arrangements with its customers and any failure to continue the existing arrangements could adversely affect the business and results of operations.

Platinum Industries IPO Financials

Platinum Industries disclosed a robust financial performance for the fiscal year 2023, with a reported revenue of 231 cr, marking a substantial 23% increase from the previous fiscal year's figure of 188 cr in FY22. Notably, the company has demonstrated consistent growth, with its revenue witnessing an impressive 61% Compound Annual Growth Rate (CAGR) since FY21.

Revenue diversification characterizes Platinum Industries' business model, with 51 percent generated from the supply of PVC stabilizers, followed by 26.75 percent from lubricant sales. The CPVC segment contributes approximately 7.6%, while the company also engages in trading commodity chemicals like titanium dioxide, waxes, and zeolite PVC/CPVC resin, which accounts for 14% of its revenue.

In terms of market reach, the company predominantly operates within the domestic market, with 94.5% of its revenue sourced domestically, while exports contribute a smaller proportion at 5.5%. Notably, the top three customers collectively contribute 64% of the company's revenue, highlighting a concentration of clientele, with the top 10 customers accounting for 86.5%.

Platinum Industries IPO Industry

In FY 2020, the Indian specialty chemicals sector, constituting approximately 26% of the broader chemicals industry (excluding pharmaceuticals), reached a value of $29 billion. This growth trend persisted, with the industry expanding at a Compound Annual Growth Rate (CAGR) of 6.7% between fiscals 2015-2020. This was fueled by heightened domestic consumption across various end-user sectors and an uptick in exports.

However, FY 2021 witnessed a downturn, with the industry experiencing a 3.4% decline, attributed to reduced economic activity and subsequent weakened demand from end-user sectors. Nonetheless, signs of recovery emerged in Fiscal Year 2023, as the industry rebounded to a value of $37.9 billion. Projections indicate a continued upward trajectory, with the Indian specialty chemical industry forecasted to reach $48.1 billion by FY 2026, growing at an estimated CAGR of 8.3% over the period 2023-2026.

 

 

 

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Published: 28 Feb 2024, 08:49 PM IST
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