Thread by @ChintanParikh10

#MEGAFLEX #SMEIPO
Biz
-Mfg of Leno Bags used for packaging agri prod. like potatoes, onions, garlic, coconuts, fruits & vegies
- also mfg. Woven PP Fabric & Sutli (Fibrillated Twisted Thread)
-trading of Polypropylene Granules.
- 148 Emp

1/n

Biz
- Mfg plant in Howrah, WB with captive power generation unit, UPS, water treatment plant
- production capacity of 60 looms & 51.30 million Bags /year
- export Leno Bags to Poland for 2 years

2/n

Biz
-Sales mainly in WB due 2 capacity constraints but have started selling in last 2-3 years to UP, BH, RJ, MP & PN
- Top 10 cust 86.44% in 22,
- Top 10 suppliers 96.39% in 22
- Rev from WB 89.17%in 22
- Export of 0.85% & 1.47% in 21 and 20

Peers-
No listed Peers

3/n

Issue
- 950 lots, IPO proceeds towards Wcap
- 100% fresh issue, post iPO promoter holding is 73.32%
- IPO proceeds will reduce cost of RM - PP fabrics can help with margin expansion. Inventory holding is biggest bottleneck for them currently due to seasonality of the demand

4/n

Good
- Revenue is increasing
- reserves are good
- No debt in Mar 22

Bad
- Single digit OPM
- other income is high
- Mercedez & Honda city on company's name
- related party transaction of 6.5 cr in rev of 47 cr

5/n

bad
- Bank gaurantee for a 10 cr loan by a grp company
- negative operating cash flow in 2020
- Utilization is almost at 90% & no plan for adding new capacity declared
- some mfg exp. in other expense
- repair & maintence charges are high as well may be due to old machine

6/n

Bad
- too many grp companies
- Bank gaurantee for a 10 cr loan for a grp company
- Return ratios are poor

in the end,
PE perspective company looks decent and also 0 debt is good

7/n

subx is shaping up good for last day
some gmp heard but not sure.
i will decide if i want to apply around 2.30

I have applied in this IPO