Platinum Industries Limited IPO – Get Date, Price, Review and Details

In this article, we will discuss: 

• Introduction
• Objects of Issue
• Key Strengths
• Risks
• Financial Snapshot

Introduction:

It is a multi-product specialty chemical company engaged in the business of manufacturing stabilizers that include PVC lubricants, CPVC additives, and lubricants. These are widely used in PVC pipes, PVS profiles, electrical wires, cables, SPC floor tiles, Rigid PVC foam boards, packaging materials etc.

According to the CRISIL Report, it is the 3rd largest player in PVC stabilizers in terms of sales with a ~13.00% market share for the financial year 2022-23 in the domestic market.

End-user industry includes potable water distribution, agriculture, construction, medical consumables, wires and cables.

Currently, Platinum Industries Ltd has a total of 12 distribution centers spread across India. The company employees 71 personnel across its various business functions.

The company also raised Rs. 14.3 crs via pre-IPO private placement at Rs. 157 per equity share on 17 ^th Jan 2024 and the issue size has been reduced to that extent.

Objects of Issue:

• Investment in Subsidiary, Platinum Stabilizers Egypt LLC, for financing the capex of manufacturing facility in Egypt (~Rs. 73.7 Crs),
• For financing the capex of an additional manufacturing facility in Maharashtra (~Rs. 79.3 Crs),
• Funding working capital requirements (~Rs. 30 Crs)
• Balance general corporate purposes.

Key Strengths:

• Varied product portfolio catering to diversified industries
• Barriers to entry in this industry are typically high.
• Its in-house R&D facilities have enabled the company to maintain steady growth in sales and profits.

Risks:

• Single manufacturing facility at Palghar. Any social unrest, natural disaster, etc would impact the operations of the company.
• Concentrated customers: A major part of revenues is generated from fewer customers and a loss of any one customer would significantly impact the financials of the company.

As of 30 ^th Sep 2023, the top 5 customers contribute to 81.84% of the revenues.

• No long-term agreements with the suppliers of raw materials, resulting in the procurement of undesired quality and quantity of raw materials.
• It operates in a regulated and evolving industry and our products and offerings are subject to changing laws, rules, regulations, and legal uncertainties.

Financial Snapshot: