About the Company:
HP Adhesives Ltd is a manufacture a wide range of consumer adhesives and sealants such as PVC, cPVC and uPVC solvent cement, synthetic rubber adhesive, PVA adhesives, silicone sealant, acrylic sealant, gasket shellac, other sealants and PVC pipe lubricant
Company is a fast-growing multi-product, multi-category consumer adhesives and sealants company.
For PVC solvent cement, company is amongst the leading manufacturing companies in India in the consumer/ bazaar segment of the adhesive industry.
Company’s products are sold across India, through an extensive distribution network of distributors, and exported also to several countries, through network of
distributors and direct customers.
Company also manufacture these products for select large PVC pipe manufacturing companies under co-branding or private label on order basis.
Apart from the above products, company also sells ancillary products like ball valves, thread seal and other tapes and FRP products for drainage and architectural solutions.
Products manufactured by the Company:
- PVC, cPVC and uPVC solvent cement.
- Synthetic Rubber Adhesives.
- PVA Adhesive.(wood glue)
- Silicone and Acrylic Sealant.
- Ball Valve.
- Teflon tape.
- FRP Manhole Covers.
End uses of company’s Products:
Adhesives and sealant manufactured by the company have applications 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.
Company’s Distribution Network:
As of September 30, 2021, company’s distribution network comprised of 4 depots situated in Delhi, Kolkata, Bengaluru and Indore and more than 750 distributors who cater to more than 50,000 dealers in India.
Company’s Export Business:
During the FY 2020-21, company sold products in 21 countries namely, Bahrain, Bangladesh, Ghana, Greece, Iraq, Kuwait, Mauritius, Nepal, Nigeria, Oman, Philippines, Qatar, Republic of Malawi, Saudi Arabia, Taiwan, Turkey, UAE, Uganda, UK, USA and Yemen.
The exports business constitutes 17.20% in the Fiscal 2021.
Company’s Manufacturing facilities:
As of September 30, 2021, company is operating out of manufacturing facility located at Village Narangi, Raigad (Maharashtra) which is a multi- product manufacturing facility.
The manufacturing facility is strategically located in close proximity to Jawaharlal Nehru Port Trust (JNPT) from where company receives supply of imported raw materials as well as from where we export to international market.
Proposed Expansion Plans:
In order to meet the growing demand for adhesives and sealants, company proposes to expand the facility to increase capacities for manufacturing of existing products and also begin manufacturing Epoxy Adhesives and Spray Paint to further expand the market base.
Post completion of proposed expansion plans, the expansion unit is expected to have an estimated installed capacity of 8,265.60 KLPA of solvent cement and 11,908.40 MTPA of other adhesives and sealants MTPA of other adhesives and sealants and is expected to be operational during Fiscal 2024.
Company’s Installed Capacity & capacity Utilization:
Company’s Financial metrics:
Management Team:
- Mrs. Anjana Haresh Motwani (Designation: Executive Director & Chairperson)
- Mr. Karan Haresh Motwani (Designation: Managing Director)
Objectives of the Issue:
Offer for Sale: (Rs.12.5 cr)
- The Selling Shareholder will be entitled to their portion of the proceeds of the Offer for Sale.Company will not receive any proceeds from the Offer for Sale.
Fresh Issue: (Rs.113.4 cr)
- Funding the working capital requirements of the Company.
Positives for the Company:
Consistently growing company with established brand presence.
- Company has grown from a single product to a multi- product adhesives company with sales across India (through pan-India distribution network) and also in international markets.
- Company’s revenue from operations has grown from Rs.3.5 crores in Fiscal 2010 to Rs.118.16 crores in Fiscal 2021, registering a CAGR of 37.5% in last 11 years.
- Over the years, Company’s brands “HP” and “Strong Weld” in PVC adhesives product category have gained increasing acceptance on account of high product quality and efficient pricing.
Wide Product Portfolio and multiple SKUs.
- When company started the business activities, it had only one product category i.e. PVC, cPVC and uPVC solvent cement.
- Over last few years, company has expanded the product portfolio to multiple product categories including silicone sealants, synthetic rubber adhesives, PVA adhesives and other sealants.
- Having a wide portfolio of product categories enables company to cross-sell to a large customer base.
Plans to expand the product portfolio.
- Company has a robust business model aimed at consistently expanding the product portfolio by introducing new product categories as well as SKUs to cater to multiple end-use applications which are sold through our distribution network across India.
- With strict focus on product quality and long-standing track record in the distributor network, company has an established brand image which helps in penetrating new product categories.
Focusing on multiple end-user industries.
- Company has over the last few years introduced new product categories which have diverse end-use applications. Initially when company started with PVC adhesives, and were primarily dependent on the PVC and cPVC pipes industry (irrigation, plumbing and water transport) for its growth.
- Subsequently, company has now established a good presence in silicone sealants, which has helped to diversify into more end-user industries such as automobiles, electronic devices and appliances, glass and glazing, external weather sealing, general interior sealing, bathroom and sanitary.
Financials of the Company:
| (in Crores) | FY 19 | FY 20 | FY 21 | 30th Sept 21 |
|---|---|---|---|---|
| Revenue | 87.97 | 97.90 | 123.87 | 72.73 |
| Net Profit | 4.0 | (-4.67) | 10.05 | 3.10 |
Valuation of Peer Group Companies:
| Company Name | Face Value | EPS | PE Ratio | RoNW | NAV |
|---|---|---|---|---|---|
| HP Adhesives Ltd | 10 | 7.74 | 35.4 | 79.00% | 9.74 |
| Pidilite Industries Ltd | 10 | 22.24 | 81.28 | 20.22% | 114.78 |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 15th December 2021 |
| Issue Closes on:. | 17th December 2021 |
| Issue Price | Rs.262 – 274 |
| Face Value | Rs.10 |
| Retail Category Allocation | 10% |
| Minimum Lot | 50 Shares |
| Minimum Investment | Rs.13,700 |
| Issue Constitutes | 25.01% |
| Issue Size | Rs.125.9 cr ($ 16.8 million) |
| Market Cap | Rs.503 cr ($ 67 million) |
| Listing at | NSE & BSE |
| Equity Shares Offered (Fresh) | 41,40,000 (Rs.113.4 cr) |
| Equity Shares Offered (OFS) | 4,57,200 (Rs.12.52 cr) |
| Equity Shares Offered (Fresh + OFS) | 45,97,200 |
| Equity Shares Prior to the Issue | 1,42,34,947 |
| Equity Shares after the Issue | 1,83,74,947 |
Also Read : List of Upcoming IPO’s in India.
Important Dates:
| Finalization of Basis of Allotment | on or Before 22nd December 2021 |
| Initiation of Refunds | on or Before 23rd December 2021 |
| Credit of Equity Shares: | on or Before 24th December 2021 |
| Listing Date: | on or Before 27th December 2021 |
Subscription Details: (Will be Updated)
| (Subscription-Category-Wise (no. of times) Till time : 06:00 PM) | Shares Offered | Day-1 | Day-2 | Day-3 |
|---|---|---|---|---|
| QIB | 13,79,200 | 0.00 | 0.34 | 1.82 |
| NII | 6,89,580 | 0.36 | 1.62 | 19.04 |
| Retail | 4,59,720 | 18.04 | 39.63 | 81.04 |
| Employee | —— | —- | — | —– |
| TOTAL | 25,28,500 | 3.38 | 7.83 | 20.92 |
Note: Retail Subscription on the basis of Applications: 70.13x
IPO Valuation Parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| 7.74 | 35.4 | 79.00% | 9.74 |
| Company Contact Info: |
|---|
| HP Adhesives Ltd 11, Unique House, Chakala Cross Road, Andheri East, Mumbai – 400 099, Maharashtra, India. Telephone: 022 – 68196300; +91-8097520674 Email id: investors@hpadhesives.com Website: www.hpadhesives.com |
| IPO Registrar Info: |
|---|
| BIGSHARE SERVICES PRIVATE LIMITED 1st Floor, Bharat Tin Works Building, Opp. Vasant Oasis, Makwana Road, Marol, Andheri (East), Mumbai 400 059, India Telephone: 022-62638200; Email: ipo@bigshareonline.com Website: www.bigshareonline.com |
| Lead Manager to the Issue: |
|---|
| UNISTONE CAPITAL PRIVATE LIMITED A/305, Dynasty Business Park Andheri-Kurla Road, Andheri East, Mumbai – 400 059 Telephone: +91 9820057533 Email: mb@unistonecapital.com Website: www.unistonecapital.com |
