Pyramid Technoplast IPO to open for subscription. Should you bid?
Pyramid Technoplast opens for subscription on Friday, August 18 and will be available for the public to bid till Tuesday, August 22. Most analysts advised investors to subscribe to the issue given the company's diversified customer base along with the comprehensive product portfolio. «At the upper price band, the company is valued at a P/E of 16.21x FY23 earnings with a market cap of Rs 611 crore post issue of equity shares and return on net worth of 29.61%.
We believe that the issue is fairly priced and recommend subscribing for the long term,» said Anand Rathi. Pyramid Technoplast is an industrial packaging company engaged in the business of manufacturing polymer-based moulded products (Polymer Drums) mainly used by chemical, agrochemical, specialty chemical and pharmaceutical companies for their packaging requirements. Avinash Gorakshakar of Profitmart Securities, too, echoed a similar view that investors should subscribe to the issue.
«The company has done well in the recent past and its outlook looks promising. Irrespective of the listing gains, which depend on market sentiments, investors can subscribe to the issue for both the medium and long term,» he said. On the other hand, Stoxbox has an 'avoid' rating on the IPO.
«The high competitive intensity, thin margins and volatility due to the commoditized nature of the business (dependent on crude and steel prices) and consistent levels of debt make us cautious on the issue. We, therefore, recommend a “Avoid” rating for the issue,» the brokerage said. The IPO comprises a fresh issue of 55 lakh shares and an offer for sale (OFS) of 37.2 lakh shares wherein promoter Credence Financial Consultancy will sell its stake.
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