Mega Flex Plastics SME
Listing performance
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 06 Sep 2022 – 09 Sep 2022
- Listing date
- 19 Sep 2022
- Face value
- ₹10 per share
- Issue price
- ₹40 per share
- Lot size
- 3,000 shares
- Total issue size
- ₹11.40 Cr
- Market cap at offer price
- ₹42.98 Cr
- Promoter holding
- 99.79% → 73.32% pre-issue → post-issue
- ISIN
- INE0G1D01014
- Registrar
- Cameo Corporate Services Ltd.
- Lead managers
- Finshore Management Services Ltd.
- Registered office
- 4, Ho Chi Minh Sarani, Suite-2A, 2nd Floor, West Bengal
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Market maker | 1,44,000 | — | — |
Application size
Minimum 3,000 shares per lot, in multiples, at ₹40
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 3,000 | ₹1,20,000 |
| S-HNI (min) | 2 | 6,000 | ₹2,40,000 |
| S-HNI (max) | 8 | 24,000 | ₹9,60,000 |
| B-HNI (min) | 9 | 27,000 | ₹10,80,000 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Valuation and performance
Valuation at offer price
| Metric | Pre-issue | Post-issue |
|---|---|---|
| EPS (₹) | 15.16 | — |
| P/E (×) | 2.64 | — |
| Market cap | — | ₹42.98 Cr |
Key performance indicators
- Return on net worth
- 8.56%
- ROCE
- 12.00%
- PAT margin
- 5.61%
- EBITDA margin
- 8.89%
- NAV per share
- ₹176.99
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About Mega Flex Plastics SME
Mega Flex Plastics Limited, incorporated on November 18, 2003, and converted to a public limited company on February 1, 2007, is primarily engaged in manufacturing leno bags used for packaging agricultural products like potatoes, onions, garlic, coconuts, fruits and vegetables. The company also manufactures woven fabric and sutli (fibrillated twisted thread). Its state-of-the-art manufacturing plant is located at Sudha Ras Food & Poly Park in Howrah, West Bengal, strategically positioned on NH-6, approximately 120 km from Haldia port and 30 km from Kolkata port. The company operates with a professional management team consisting of promoters with decades of experience in packaging solutions. It maintains in-house facilities including captive power generation, UPS, water treatment plant, and a well-equipped laboratory for quality assurance. The company has its own fleet of vehicles for timely delivery.
Company Analysis
from RHPMega Flex Plastics Limited manufactures polypropylene leno bags, woven fabrics, and fibrillated twisted thread for agricultural packaging, primarily serving the Indian market with export presence.
Mega Flex Plastics Limited, incorporated on November 18, 2003, and converted to a public limited company on February 1, 2007, is primarily engaged in manufacturing leno bags used for packaging agricultural products like potatoes, onions, garlic, coconuts, fruits and vegetables. The company also manufactures woven fabric and sutli (fibrillated twisted thread). Its state-of-the-art manufacturing plant is located at Sudha Ras Food & Poly Park in Howrah, West Bengal, strategically positioned on NH-6, approximately 120 km from Haldia port and 30 km from Kolkata port. The company operates with a professional management team consisting of promoters with decades of experience in packaging solutions. It maintains in-house facilities including captive power generation, UPS, water treatment plant, and a well-equipped laboratory for quality assurance. The company has its own fleet of vehicles for timely delivery.
Objects of the Issue
- Working capital requirements ₹1,017.00 Lakhs p.19
- Issue related expenses ₹48.00 Lakhs p.19
- General corporate purposes ₹75.00 Lakhs p.19
- To meet the working capital requirements ₹1,017.00 Lakhs p.64
- To meet the Issue Expenses ₹48.00 Lakhs p.64
- General Corporate Purposes ₹75.00 Lakhs p.64
- Not specified in this part of the document
Issue Structure
- Total Issue
- ₹1,140.00 Lakhs
- Fresh Issue
- ₹1,140.00 Lakhs
- Offer for Sale
- Nil
- Price Band
- ₹40/- per equity share (Fixed Price)
- Lot Size
- 3,000 equity shares (minimum lot size)
- Face Value
- ₹10/- per equity share
Business Model
The company earns revenue primarily through manufacturing and selling polypropylene leno bags for agricultural storage and packaging. Revenue from leno bag sales represented ₹4,099.66 lakh (88.22%), ₹2,759.39 lakh (93.56%), and ₹3,029.35 lakh (96.18%) of total revenue from operations in fiscal years 2022, 2021, and 2020 respectively. The company operates on an order-by-order basis with customers without long-term contracts. It also generates revenue from sales of woven fabric and sutli products, and maintains export operations, with export sales of ₹25.02 lakh (0.85% of total revenue) in fiscal 2021 and ₹46.43 lakh (1.47% of total revenue) in fiscal 2020.
Business Segments
SWOT Analysis
- • Established brand reputation with multiple recognized brands in leno bag market(p.18)
- • Strategic manufacturing location with excellent connectivity to ports and Kolkata(p.18)
- • Vertically integrated operations with in-house facilities including captive power generation(p.18)
- • Experienced promoter leadership with decades of expertise in packaging solutions(p.18)
- • Export presence demonstrating international quality acceptance(p.18)
- • Established operations with 14+ years track record(p.99)
- • State-of-the-art manufacturing facility with 60 looms(p.91)
- • Experienced management with decades of industry expertise(p.92)
- • Strong customer relationships and brand recognition(p.99)
- • Efficient operations with high capacity utilization(p.103)
- • Integrated operations with in-house facilities(p.92)
- • Experienced and long-tenured promoter leadership with deep technical knowledge(p.121)
- • Established integrated manufacturing facility with in-house capabilities(p.173)
- • Significant production capacity with modern technology(p.172)
- • Strategic geographic location with excellent connectivity(p.172)
- • Established and trusted brand portfolio in key agricultural markets(p.172)
- • Profitable operations with improving financial performance(p.176)
- • Heavy revenue concentration among top 10 customers representing 79.21% of FY2022 revenue(p.24)
- • Absence of long-term contracts with customers; reliant on order-by-order basis(p.24)
- • Heavy dependence on top 10 suppliers for 97.88% of raw material purchases in FY2022(p.24)
- • Geographic concentration with 97.01% of FY2020 revenue from West Bengal operations(p.25)
- • Product concentration with leno bags representing 88.22% of FY2022 revenue(p.25)
- • Corporate guarantee provided for group company loan creates contingent liability exposure(p.25)
- • Promoter average cost of acquisition significantly lower than issue price(p.27)
- • Heavy dependence on raw material suppliers(p.100)
- • High working capital requirement(p.100)
- • Vulnerable to fluctuations in farm output(p.100)
- • Exposure to natural calamities(p.100)
- • Insufficient market reach(p.100)
- • Dependence on limited number of customers for significant revenue(p.175)
- • Concentration of production facility in single location(p.172)
- • Outstanding GST litigation and contingent tax liability(p.179)
- • Multiple pending indirect tax litigations with uncertain outcomes(p.180)
- • Limited diversification in product portfolio(p.172)
- • Growing Indian packaging market expected to reach USD 204.81 billion by 2025 from USD 50.5 billion in 2019(p.18)
- • Government ambition to grow plastic industry from Rs. 3 lakh crores to Rs. 10 lakh crores in 4-5 years(p.18)
- • Strong export growth momentum with 35.4% increase in plastic exports during 2021-22(p.18)
- • Packaging industry growing at 22-25% per annum with high expansion potential(p.18)
- • Presence in four states beyond West Bengal with plans to strengthen and expand regional operations(p.25)
- • Plan to diversify product offerings beyond leno bags to other packaging products(p.30)
- • Geographic expansion into new states(p.99)
- • Government focus on horticulture and food processing(p.100)
- • Expansion of product portfolio with value-added products(p.100)
- • Untapped Indian and overseas markets(p.100)
- • Leveraging goodwill to expand market base(p.100)
- • Growth in organized agricultural packaging market(p.172)
- • Export market expansion and international quality acceptance(p.172)
- • Group synergies through complementary packaging businesses(p.173)
- • Capacity expansion opportunities through additional looms(p.172)
- • Government incentives for manufacturing in West Bengal(p.140)
- • Government ban on single-use plastics effective July 1, 2022 creating regulatory risk(p.23)
- • Seasonal demand fluctuations based on agricultural harvest cycles affecting revenue consistency(p.29)
- • Fragmented competitive market with multiple small and medium-scale manufacturers and unorganized sector offering competitive pricing(p.29)
- • Rising environmental concerns and regulatory pushes towards alternatives to plastic packaging materials(p.23)
- • Volatility in raw material prices and supply disruptions affecting production costs(p.24)
- • Dependence on West Bengal electricity supply creating operational vulnerability(p.30)
- • COVID-19 pandemic causing demand volatility and operational disruptions(p.29)
- • Technological obsolescence risk requiring significant capital investments for modernization(p.26)
- • Changes in tax rates and regulatory policies impacting financial performance(p.36)
- • Intense competition from organized and unorganized players(p.101)
- • Low entry barriers enabling new competitors(p.100)
- • Risk of competition from players with larger capital base(p.101)
- • Rising labour wages(p.100)
- • Changes in government policies(p.100)
- • Demand volatility due to seasonal agricultural cycles(p.178)
- • COVID-19 pandemic impact and lockdown disruptions(p.174)
- • Input cost inflation and commodity price volatility(p.174)
- • Competition and emergence of alternative products(p.175)
- • Regulatory and policy changes affecting operations(p.175)
- • Natural and man-made disaster risks(p.175)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Channel Plastics Private Limited | Promoter | 33.09% | — |
| Mr. Rakesh Sethia | Promoter | 5.60% | — |
| Mr. Mohan Lal Parakh | Promoter | 2.85% | — |
| Mr. Hukum Chand Bothra | Promoter | 2.58% | — |
| Channel Plastics Private Limited | Promoter | 33.09% | 24.32% |
| Mr. Rakesh Sethia | Promoter | 5.60% | 4.11% |
| Mr. Mohan Lal Parakh | Promoter | 2.85% | 2.09% |
| Mr. Hukum Chand Bothra | Promoter | 2.58% | 1.89% |
| Mohan Lal Parakh | Promoter | 2.85% | 2.09% |
| Hukum Chand Bothra | Promoter | 2.58% | 1.89% |
| Rakesh Sethia | Promoter | 5.60% | 4.11% |
| Channel Plastics Private Limited | Promoter Group | 33.09% | — |
Leadership
Auto-extracted from the company's RHP using AI, with each fact linked to its source passage (hover any row to see the quote & page). Provided for research only, not investment advice — verify against the official RHP before relying on it.