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.
