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Firm overview
Included initially as a Restricted Legal responsibility Partnership (LLP) in 2008, Platinum Industries Ltd. is now a multi-product firm working within the specialty chemical substances trade primarily engaged within the enterprise of producing stabilizers. The enterprise segments embody PVC (polyvinyl chloride) stabilizers, CPVC components and lubricants. PVC stabilizers are probably the most essential components used within the manufacturing of PVC to keep away from the decomposition of PVC through the heating course of. The merchandise discover their utility in PVC pipes, PVC profiles, PVC fittings, electrical wires and cables, SPC flooring tiles, inflexible PVC foam boards, packaging supplies and so on. The corporate’s manufacturing facility is positioned in Palghar, Maharashtra which possesses ISO 9001:2015 certification for high quality administration methods.
Objects of the provide
- Funding in Subsidiary, Platinum Stabilizers Egypt LLC (“PSEL”) for financing its capital expenditure necessities in relation to the organising of a producing facility for PVC Stabilizers in Egypt.
- Funding of capital expenditure necessities in the direction of organising of a producing facility for PVC Stabilizers at Palghar, Maharashtra.
- Funding basic working capital necessities of the corporate.
- Common company functions.
Funding Rationale
- Broadening international footprint – To cater to the rising market demand for the corporate’s merchandise, particularly PVC stabilizers, and to increase its presence in new areas, Platinum Industries is within the means of deepening its presence within the Center East and North Africa (MENA) area. The corporate’s subsidiary PSEL is organising a brand new manufacturing facility for PVC stablizers at Egypt. Presently, as per CRISIL report, there aren’t any producers of PVC stabilizers in Egypt. The proposed facility is anticipated to have a capability of 30,000 TPA and is anticipated to start operations by the fourth quarter of FY2024-25.
- Growth plans – The corporate is organising a brand new manufacturing facility for PVC components at Palghar, Maharashtra, India. That is as a part of the corporate’s technique to have a devoted, modernised and automatic non-lead-based facility for PVC stabilizers, which can enable the corporate to fabricate high quality stabilizers and PVC components in a well timed and cost-efficient method. The put in capability of the power is proposed to be an combination of 60,000 MTPA of PVC stabilizers (Non-Lead Based mostly).
- Diversified product portfolio – The corporate has various merchandise for the PVC trade available in the market and a number of product classes similar to low lead-based stabilizer, calcium zinc-based stabilizer and natural based mostly stabilizer. In PVC functions, it has developed greater than 400 grades, which assist covers nearly all of clients in addition to totally different functions.
- Monetary monitor file – Income from operations have grown from Rs. 89.14 crores in FY2021 to Rs.234.06 crores in FY2023, registering a CAGR of 62.04% within the final three fiscal years. EBIDTA have grown from Rs.0.17 crores in FY2018 to Rs.50.94 crores in FY2023, registering a CAGR of 158.43% in six years due to enhance in gross sales of excessive margin merchandise i.e. lead-free merchandise, introduction of recent merchandise i.e. CPVC components, enhance in manufacturing capacities and management on uncooked materials buy prices. PAT has grown from Rs.4.82 crores in FY2021 to Rs.37.58 crores in FY2023, registering a CAGR of 174.04% in final three fiscal years.
Key dangers
- Dependence on single manufacturing facility – The corporate operates out of a single manufacturing facility which is positioned at Palghar, Maharashtra, any localized social unrest, pure catastrophe or breakdown of companies or another pure catastrophe in and round Palghar, Maharashtra or any disruption in manufacturing at, or shutdown of, the manufacturing unit might have materials antagonistic impact on enterprise and monetary situation.
- Foreign exchange Danger – The corporate is uncovered to international trade dangers, because it conducts a good portion of operations from worldwide markets in foreign currency. Fluctuations in trade charges might have an effect on its monetary efficiency.
Outlook
The Indian specialty chemical trade is anticipated to achieve $48.1 billion by fiscal 2026, rising at 8.3% CAGR over 2023-26. In line with the CRISIL Report, Platinum Industries Ltd. is the third largest participant of PVC stabilizer by way of gross sales with an ~13.00% market share for the monetary 12 months 2022-23 within the home market. As per RHP, there aren’t any listed corporations that completely undertake the manufacturing of PVC stabilizers and CPVC components. Therefore, foundation elements similar to the dimensions of the enterprise, publicity to the development and industrial applicant trade (as speciality chemical substances trade contributes nearly all of income from operations for the Firm), a proxy set of listed friends of Supreme Petrochem Ltd and Apcotex Industries Ltd (the “Trade Friends”) have been recognized for Platinum Industries. The friends are buying and selling at a mean P/E of 23.38x with the best P/E of 24.39x and the bottom being 22.36x. On the greater value band, the itemizing market cap of Platinum Industries Restricted might be round ~Rs.939.22 crores and the corporate is demanding a P/E a number of of 24.99x based mostly on publish challenge diluted FY23 EPS of Rs.6.84. When put next with its friends, the problem appears to be absolutely priced in (pretty valued). Based mostly on the above views, we offer a ‘Subscribe’ score for this IPO for a medium to long-term Holding.
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