Three M Paper Boards Ltd: A Detailed Look at Their SME IPO
Three M Paper Boards Ltd, headquartered in Mumbai, has been a stalwart in the manufacturing of Recycled Paper-based Coated Duplex Board products for over three decades. Established in 1989, the ISO-9001 certified company has carved a niche in producing high-quality duplex board paper products used extensively in packaging across various industries.
SME IPO Overview
Three M Paper Boards Ltd is set to raise up to Rs 39.83 crores through its SME IPO, scheduled to open for subscription from July 12 to July 16. The company plans to list its shares on the SME platform of BSE Ltd (BSE SME).
Key Details of the IPO
Issue Details
- The IPO entails the issuance of 57.72 lakh equity shares of Rs 10 each.
- Price Band: Rs 67-69 per share.
- Use of Funds: Business expansion, machinery purchase, factory extension, loan repayment, and working capital.
Book Running Lead Manager
Comfort Securities Limited has been appointed as the Book Running Lead Manager for the IPO, overseeing the entire offering process.
Utilization of Funds
Capital Expenditure
- Allocation of Rs 14 crores for purchasing a Plastic-Fired Low-Pressured Boiler aimed at cost-effective power generation using waste plastic.
- Expansion of factory buildings to enhance storage capacity.
- Acquisition of a sheet cutter to boost production efficiency.
Working Capital and Debt Repayment
- Rs 10 crores earmarked for enhancing working capital.
- Rs 7 crores allocated for the repayment of term loans, aimed at optimizing cash flow and reducing interest costs.
General Corporate Purposes
The remaining funds will be utilized for general corporate purposes and to cover issue expenses.
Market and Industry Insights
Market Potential
- The Indian paper and packaging industry is witnessing robust growth, projected to reach USD 204.81 billion by 2025, driven by sectors like e-commerce, food processing, pharmaceuticals, FMCG, manufacturing, and healthcare.
Company’s Market Position
- Three M Paper Boards Ltd holds a significant market presence with a manufacturing facility in Chiplun, Maharashtra, boasting an annual capacity of 72,000 tons and a 4 MW captive power plant.
- The company exports its products to over 15 countries and maintains a strong domestic network with 25 dealers nationwide.
Financial Performance
FY 2024 Performance
- Revenue: Rs 272.23 crore
- EBIDTA: Rs 27.07 crore
- Net Profit: Rs 11.35 crore
- EBITDA Margin: Increased to 9.94%
- PAT Margin: Improved to 4.11%
Conclusion
Three M Paper Boards Ltd’s SME IPO marks a significant step towards enhancing its production capabilities and market reach. With a clear focus on sustainable growth and leveraging advanced technology, the company is poised to capitalize on the burgeoning paper and packaging industry in India.
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