Shree Tirupati Balajee Agro Trading Company Limited IPO: Check IPO Date, Lot Size, Price & Details

About the Shree Tirupati Balajee IPO:

Shree Tirupati Balajee Agro Trading Company specializes in the manufacturing and sale of Flexible Intermediate Bulk Containers (FIBCs), which include large flexible bags, woven sacks, woven fabric, narrow fabric, and tapes for both domestic and international markets. They offer customized products tailored to the bulk packaging needs of clients across various industries such as chemicals, agrochemicals, food, mining, waste disposal, agriculture, lubricants, and edible oils. Their FIBC products, which are designed to handle loads ranging from 500 kg to 2,500 kg, facilitate efficient transportation and packaging, providing a labour-saving solution that enhances the loading and unloading of vessels, containers, or trucks.

In Fiscal 2024, export sales accounted for 49.04% of total revenue while domestic sales were 50.96%. In Fiscal 2024, the contribution of various products to revenue from operations has been as follows: FIBC - 51.47%, Woven Sacks - 4.51%, Woven Fabrics & Narrow Fabric - 21.32%, Tape - 4.21% and Other products which include Liner, Container Liner, Thread, Multifilament Yarn, Filler cord, Treated Polymers etc. - 18.49%.

The company has been providing its services for over twenty years and operates from five manufacturing units. Its business is managed through subsidiaries, including Honourable Packaging Private Limited (HPPL), Shree Tirupati Balajee FIBC Limited (STBFL), and Jagannath Plastics Private Limited (JPPL).

IPO Details:

Objects of the Offer:

The Net Proceeds (Gross Fresh Issue proceeds less Offer related expenses in relation to Fresh Issue) are proposed to be utilized as follows:

Key Strengths and Opportunities:

• Diverse customer base: Over the years, the company has built strong relationships with clients across various industries, consistently meeting their needs with tailored product offerings. The company’s ability to adapt and manufacture bags to meet specific, evolving requirements further strengthens its client relationships, fosters customer retention and also provides a competitive pricing advantage.
• Multi- product portfolio : The company specializes in providing logistics solutions across various industries, ensuring that their success is not reliant on any single sector. FIBC bags are manufactured for packaging all possible products including, food products, chemicals, minings etc. It operates in multiple categories, including the production of bags and liners.
• Quality Standard Certifications: The company prioritizes the production of high-quality products that adhere to global standards. Their manufacturing units I and II are certified with ISO 9001:2015 and ISO 22000:2018 by International Certification Services Private Limited and Staunchly Management and System Services Limited, respectively. Unit III is also certified with ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, ISO 22000:2018, and SEDEX SMETA four-pillar standards.
• Multi-market Company: Not depending on a single market, it operates in both international and domestic markets, with a global customer base. It exports to 38 countries across six continents, including major destinations such as the USA, Germany, Australia, the UK, and Canada. The company’s broad reach demonstrates its diverse market presence and global distribution capabilities.

Risk factors:

• Geographic Concentration Risk: All of the company's manufacturing facilities are located in Pithampur, Madhya Pradesh, resulting in a concentration in a single region. Any significant interruption at these facilities could adversely affect the company's business and operational results.
• Regulatory and Environmental Risks: In response to growing awareness of pollution control, many economies, including India, have implemented bans on plastic products. If any of the plastic packaging products manufactured by the company are banned in India or in any of the markets to which they export, it could have a significant and adverse impact on the company's business and operational results.
• Negative Cashflow from Operations: The company has experienced negative cash flows from its operating activities. Its cashflows from operating activites for FY2024, FY2023 and FY2022 are Rs. -26.50 crore, Rs. 36.89 crore and Rs. -22.16 crore, respectively. If it is not able to generate sufficient cash flows in future, it may adversely affect the business operations.
• Working Capital Dependency: The company's business operations are reliant on working capital. If the company is unable to secure or maintain adequate cash flow, credit facilities, or other funding sources in a timely manner to meet its working capital needs or debt obligations, it could negatively impact its operations.

Financial Snapshot:

(Not rated the IPO as the issue size is less than Rs. 500 crore)