Table of Contents
- HP Adhesives Limited Introduction
- What are the risk factors in HP Adhesives IPO?
- What are the competitive strengths in HP Adhesives IPO?
- What are the product offerings of HP Adhesives IPO?
- How are the financials of HP Adhesives IPO?
- Who are the Promoters of HP Adhesives Limited?
- Objects Of HP Adhesives IPO net proceeds
- HP Adhesives IPO open & close date
- HP Adhesives IPO allotment, refund & listing date
- HP Adhesives IPO allotment status
- GMP(Grey Market price) for HP Adhesives IPO
- HP Adhesives IPO price band, RHP & details
- HP Adhesives IPO Valuation (overpriced or not?)
- HP Adhesives IPO good or bad? (review)
HP Adhesives Limited Introduction
HP Adhesives Limited is the fast-growing multi-product, multi-category consumer adhesives, and sealants company. And also in the PVC solvent cement, they are amongst the leading manufacturing companies in India in the consumer segment of the adhesive industry. Further, the company’s products are used in multiple industries such as plumbing and sanitary, drainage and water distribution, general-purpose building/ construction, and interior operations as well as for glazing operations, woodwork, footwear, automotive, foam-furnishing, and other varied industries.
Mumbai-based HP Adhesives Limited public offer includes a fresh issue of 41.4 lakh equity shares and an offer for sale of 4.57 lakh shares from the selling shareholders.
What are the risk factors in HP Adhesives IPO?
1. The Covid-19 pandemic has Highly affected the overall business of the company
2. The Company does not have any long term and exclusive arrangements with any of their distributors
3. They also don’t have any long term and exclusive arrangements with any of the suppliers for raw materials
4. Company has short and long term borrowings from banks and other financial institutions and its promoters
5. They had negative cash flows in the past and may also experience in the future too
6. HP Adhesives has a history of loss in FY-19-20
7. Company generates more than 50% of its revenue from the western zone of the country, any adverse situation in the western zone may also affect the company
8. The company and its promoters and directors are involved in legal proceedings, any adverse hearing in such cases may impact the overall condition of the company
9. Company has certain contingent liabilities which if materialize, may adversely affect our business
What are the competitive strengths in HP Adhesives IPO?
1. HP Adhesives is showing consistent growth over the last 11 years and also established a good brand presence
2. The company has increased its product portfolio from one product category to multiple product categories
3. Company has a Pan India distributive network with a diversified customer base
4. HP Adhesives has also a well-established presence in the international markets
5. Company has a good relation with large PVC pipe companies.
6. Company has an experienced management team
7. HP Adhesives has shown a consistent increase in revenue over the past three years
8. Also, the profitability of the company is rising continuously except FY-20 (due to Covid-19)
What are the product offerings of HP Adhesives IPO?
The portfolio of their products comprises PVC, cPVC, and uPVC solvent cement, synthetic rubber adhesive, PVA adhesives, silicone sealant, acrylic sealant, gasket shellac, other sealants, and PVC pipe lubricant. Further, The majority of HP Adhesives products are sold under the brand names “HP”, “Strong Weld”, “Strong Seal” and “Strong Fix”
How are the financials of HP Adhesives IPO?
- HP Adhesives Ltd is showing consistent growth in revenue over the past three years
- Also, the company is showing good profits except in FY-20 (due to Covid-19 outbreak)
|Financial Year Ended||Revenue (₹ Crores)||PAT (₹ Crores)||EPS (₹)|
|March 2020||97.90||– 4.67||– 3.59|
|Six months ended Sept 2021||72.73||3.1|
Who are the Promoters of HP Adhesives Limited?
Anjana Haresh Motwani and Karan Haresh Motwani are the promoters of the company.
Objects Of HP Adhesives IPO net proceeds
HP Adhesives IPO Size is Rs 125.97 Crores and also the objects of the IPO are:
1) Offer for Sale (OFS) Rs 12.53 Crores: The OFS proceeds will directly go to the selling shareholders so, the company will not get its benefits
2) Fresh issue of Rs 113.44 Crores: Fresh issue would be done towards the following purposes:
i) Funding the working capital requirements of the company
ii) Funding capital expenditure for expansion of production capacity at the existing manufacturing facility in Maharashtra and at the additional unit having a proposed construction area admeasuring about 4,532.57 sq. mtrs.
HP Adhesives IPO open & close date
IPO open date is: 15th Dec 2021, as well as
IPO close date is: 17th Dec 2021
HP Adhesives IPO allotment, refund & listing date
The allotment date is: 22nd Dec 2021
The refund date is: 23rd Dec 2021
The listing date is: 27th Dec 2021
HP Adhesives IPO allotment status
GMP(Grey Market price) for HP Adhesives IPO
Rs 58 (21.17% premium) as of 21st Dec 2021
HP Adhesives IPO price band, RHP & details
|Price range||262 – 274|
|Minimum order quantity||50|
HP Adhesives IPO Valuation (overpriced or not?)
Calculating with its upper price band of Rs 274
Now, the EPS (earning per share) for FY21 is 7.74 so the P.E ratio (price to earnings ratio) comes at 274/7.74=35.4x
If we consider the last 3 years weighted average EPS of Rs 3.19 and the upper price band of Rs 274, P/E works out to be 86x.
Therefore, the company is asking P.E ranging between 35.4X to 86X which is Reasonably priced, and also there is only one peer Pidilite Industries which is currently trading at a P.E of 105.93X.
HP Adhesives IPO good or bad? (review)
HP Adhesives are the fast-growing multi-product, multi-category consumer adhesives, and sealants company. And also in the PVC solvent cement, they are amongst the leading manufacturing companies in India in the consumer segment of the adhesive industry, Moreover looking into their financials seems to be impressive and showing a consistent growth year on year, however, the company profits were affected by Covid-19, although revenues were still growing after looking into these aspects and company’s IPO it seems to be a good investment. And from listing gains also it will be a good bet because the company has a strong business with impressive financials. But getting the IPO will be tough for retail investors because the retail quota is much lesser than usual.
QIB Shares Offered
No less than 75% of the Net offer
Retail Shares Offered
Not more than 10% of the issue
NII (HNI) Shares Offered
Not more than 15% of the offer
Pre Issue Share Holding
Post Issue Share Holding
Follow below steps to apply this IPO in Zerodha platform:
1) Visit the Zerodha portal and log in to Console.
2) Go to Portfolio and click the IPOs link.
3) Visit the ‘Supriya LifeScience IPO’ row and click the ‘Bid’ button.
4) Enter your UPI ID, Qty, and the Price which you want to bid.
5) Click on the ‘Submit’ IPO application form.
6) Visit the UPI App (net banking or BHIM) to approve the mandate
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