Platinum Industries IPO: Business Model, Key Details, KPIs, and SWOT Analysis

Platinum Industries is entering the IPO frenzy and is raising a total of INR 235.32 Crores. Today’s blog will cover the company’s business model, KPIs, and SWOT analysis.

Company Overview

Platinum Industries was founded in 2016 and initially adopted a limited liability partnership status and later transformed into a public limited company.

The company operates in the speciality chemical business and produces lubricants, CPVC additives, and PVC stabilizers.

According to a CRISIL assessment done in 2022–2023, the company boasts a 13% market share in the domestic PVC stabilizer industry. The company’s 21,000-square-foot production facility is located in Palghar, Maharashtra.

As of December 31, 2023, it employed 97 people and served over 273 clients for the fiscal year 2023. 

Company Promoters

The company’s founders are Parul Krishna Rana, who holds the executive director position, and Krishna Dushyant Rana, who has the chairman and managing director positions. 

Approximately 94.74% of the company is owned by the promoters.

Details of the Issue

Through a new share offering of 1.38 crore, the company hopes to raise INR 235.32 crore. With a market lot of 87 shares, the issue price’s lower price band is 162 INR, while the upper price band is 171 INR per share.

Timeline of IPO

Let’s have a look at the timeline of the IPO

IPO Open Date	27th Feb 2024
IPO Close Date	29th Feb 2024
Finalization of Allotment	1st March 2024
Initiation of Refund	4th March 2024
The credit of Shares into a Demat Account	4th March 2024
Listing Date on NSE & BSE	5th March 2024

Details of IPO

Face Value of Share	10 INR per share
Price Band	162 to 171 INR per share
Market Lot	87 Shares
Total Fresh Issue Size	235.32 Crore
Total Number of Shares	1,37,61,225 Shares

IPO Allotment Size

Applicant	Market Lot	Share	Amount
Retailer (Min)	1	87	14,877
Retailer (Max)	13	1131	1,93,401
Small High Net Worth Individual (Min)	14	1218	2,08,278
Small High Net Worth Individual (Max)	67	5829	9,96,759
Big High Net Worth Individual (Min)	68	5916	10,11,636

A retail consumer can invest a minimum of 14,877 INR and a maximum of 1,93,401 INR, as indicated by the above table.

Objective of the Issue

The business plans to use the proceeds from the issuance to finance the working capital requirements of its Indian units and establish Platinum Stabilizers Egypt LLP, a PVC stabilizer production plant in Egypt.

Key Financials of the Company

Balance Sheet

Particulars	31st March 2023	31st March 2022	31st March 2021
Non-Current Asset	38.94	7.75	6.09
Current Asset	82.221	76.721	26.163
Total Asset	121.168	84.479	32.256
Equity	71.559	22.338	4.47
Long Term Liability	5.524	2.509	2.528
Current Liability	44.086	59.632	25.256

The above financial statement shows that the company’s assets have expanded greatly in the last three years. Still, its current liabilities have dropped in the most recent year compared to the FY ending in 2022.

Income Statement

Particulars	31st March 2023	31st March 2022	31st March 2021
Revenue from operations	231.481	188.156	89.269
Total Income	232.555	189.238	89.530
Total Expenses	181.619	165.278	82.835
Profit before tax	50.936	23.960	6.695
Profit after tax	37.584	17.748	4.815

The revenue statement shows that the company’s profit after taxes increased nearly seven times, from 4.8 crores in 2021 to 37.58 crores at the end of the fiscal year 2023. This increase is also evident in the company’s revenue.

KPIs

Particulars	31st March 2023	31st March 2022	31st March 2021
Current Ratio	1.87	1.29	1.04
Return on Equity	90.02%	132.39%	138.63%
Inventory Turnover Ratio	10.88	17.53	15.33
Net Profit Ratio	16.24%	9.43%	5.39%
Return on Capital Employed	56.85%	52.51%	74.28%

The company’s major metrics are listed above, and they show that, in contrast to 2021, net profit increased significantly in 2023. The return on capital employed also increased during the previous two years, while the return on equity decreased.

Cash Flow Analysis

Particulars	31st March 2023	31st March 2022	31st March 2021
Net Cash Flow from Operating activities	38.355	14.893	3.276
Cash Flow from Investing activities	(36.731)	(4.954)	(1.309)
Cash Flow from Financing activities	0.474	19.001	(1.173)

Based on the company’s EPS from the previous year, the P/E ratio is calculated to be 17.19x on the lower price band of 161 INR and 18x on the upper price band of 171 INR. 

Strengths

1.  According to a CRISIL report, the speciality chemical sector in the Indian economy is predicted to increase by 8.3% C.A.G.R.

2.  The company ranked third in India in domestic sales of PVC stabilizers.

4.  Due to the substantial entry barriers in this industry, the risk associated with competition is minimal.

5.  The company has more than 400 grades of products specifically designed for PVC applications, which indicates that the company is aiming for a massive increase in the market share. 

Risks

1.  The company presently operates a single manufacturing facility in Palghar, Maharashtra, and any disruption there will affect its profitability.

3.  Their ability to obtain raw materials or pay more for them will affect their profitability in the future.

4.  Sales will be impacted by the difficulties a firm faces while expanding into a new area.

5.  Few clients account for a sizable amount of the company’s revenue; disagreements among them could cause revenue volatility.

Conclusion

While the company has a strong financial history and plans to expand into other nations strategically, its clientele is relatively small which may worry some investors. Since establishing itself in 2016 and emerging as a major force in India’s stabilizer manufacturing sector, the company has had a lengthy growth narrative.

Frequently Asked Questions (FAQs)

Q1. What is the minimum amount required to participate in the IPO of Platinum Industries?
Ans. The minimum investment for the Platinum Industries IPO will be 14877 INR, with a minimum market lot size of 87 shares in the upper price range of 171 INR.

Q2. What is the reason behind the Platinum Industries’ IPO?

Ans. The company intends to build a manufacturing facility in Egypt. Thus, they want to obtain money through an initial public offering (IPO) to expand its operations.

Q3. What is the Platinum Industries IPO pricing range?
Ans. The price band of the company ranges from 162 on the lower side to 171 on the upper side.

Q4. Is Platinum Industries a profit-making company?
Ans. Yes, Platinum Industries has made a substantial profit over the last three years, thus making it a profitable business.

Q5. What does the cash flow statement indicate about the company’s operations?

Ans. The company’s cash flow statement shows that the management can maintain consistent efficiency while investing the proceeds to expand further.

Disclaimer: The securities, funds, and strategies mentioned in this blog are purely for informational purposes and are not recommendations.